Titan gears up to take on global watch giants in premium, luxury segment

Tata-run Titan Company is taking on global watch makers like the Swatch group of Europe and Seiko of Japan by making an aggressive bid to grab a larger share of the over ₹25,000 watch market, also known as the premium-to-top-of-the-line luxury segment.

 

Speaking to Business Standard, Kuruvilla Markose, chief executive officer (CEO) of the watches and wearables division, Titan, said: “The Indian market has reached an inflexion point. Around 50 per cent of the value of watches sold is under ₹25,000 and the other 50 per cent is over that. We have a dominant 55 per cent share in the under ₹25, 000 market. As more and more consumers upgrade to a Sonata or a Fastrack, we will continue to dominate here.”  

 

But Markose is also revving up in the premium and luxury segment now.

 

He added, “We have a 15 per cent share of the over ₹25,000 market in value, but it is growing at 100 per cent per annum for us. We expect a fair market share of 50 per cent in revenue in this segment too.”

 

That is an ambitious target. It comes on the heels of the Centre signing a free trade agreement (FTA) with the European Union (EU), under which Customs duty on European and specifically Swiss-made watches will fall from 22 per cent to 16 per cent initially. It would gradually become zero by 2031.

 

This will make imported watches from companies like Swatch much cheaper in India than the current prices. But Titan has put together a multifold strategy to combat the challenge and break big time in this segment.  

 

For instance, it recently launched the Zero Hour sports collection which spans 12 time pieces ranging in depth capability from 100 to 500 metres. They are priced between ₹15,795 and ₹77,995.

 

It has also demonstrated that it can make a top-end watch with a stiff price tag of ₹45 lakh under its luxury sub brand Nebula with a limited edition.

 

And, to push its premium and luxury watches, it is supported by over 290 Helios stores and has also set up 10 Helios Luxes, which deal with even more expensive watches.

 

Also, Titan is ensuring that its watches offer more value compared to global players with offerings that have similar specifications and features.

 

Markose points out that the diver watches under Zero Hour have a price tag that is 30-50 per cent lower than similar brands available globally.

 

Similarly, under Stellar 3 — the Wondering Hour model  —  featuring crytallised titanium on top of an automatic range, is priced at ₹1.8 lakh. 

 

A comparable global watch would be double or triple of that price.

 

But can Titan compete with the global watch players in Europe?  Markose argues: “Even after a 16 per cent reduction due to the FTA, the difference in European and Indian pricing is huge. Our prices with similar specifications are half or a third of the price of global watches.”

 

With the volume of premium and luxury watches going up, prices of making the watches will only come down.

 

Also, localisation of watches (like the diver watch), which is at 70 per cent, will rise as more and more parts are made in the country.

 

What is interesting is the growing revival of mechanical watches in the country — automatic and hand wounded.

 

For instance, in the above ₹25,000 watch market, which accounts for 50 per cent share (value), as much as 35 per cent in value of sales is mechanical watches.

 

The overall analog watch market in India is estimated at ₹26,000 crore annually. Quartz watches account for ₹15,000 crore to ₹16,000 crore, while mechanical watches constitute an estimated 35 per cent of the value of the above-₹25,000 watch segment.

 

In contrast, smart watches are much smaller with annual industry sales of ₹5,000 crore-6,000 crore per annum.

 

But Titan will also play in this market which is moving from low-priced casual watches to ones which have smart functionality.

 

While the market declined, a Titan study shows that 20 per cent of the respondents said they will only use smart watches and 30 per cent only analog. The remaining 50 per cent preferred both. 

CHANGING TIMES

• Titan aiming to increase market share in the over ₹25,000 segment from 15% to 50%
• Currently, this market is controlled by big boys like Swatch group and Seiko
• Titan is offering watches with equivalent specifications and features at half or a third of the cost European/other watch firms offer in India
• FTA between India and EU will bring down Customs duty from 22% to zero by 2031
• This would give European watch makers a cost advantage in India

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This report has been updated to correct some errors in the previous version