1) India's watch market is underpenetrated with only 27% of Indians owning a watch. The market is dominated by the low-end segment of below Rs. 500.
2) Major players in the Indian watch market are HMT, Titan, and Timex. Titan has over 50% market share of the organized watch market.
3) The watch market is shifting towards higher-priced segments as consumer incomes rise. New segments like fashion watches and smart watches are also emerging.
2. 2
Industry Overview
India is an under penetrated market for watches
• 27% of Indians own a watch
Total estimated market as of 2005
• Volume ~35 mn units
• Value: Rs 2328 crores (USD 530 Mn)
Vast proportion of the Indian market is below Rs
500
• ~68% (85% by volume)
Market has been split into low end, mass market,
mid market, premium
4. 4
HMT
First major watch manufacturer in India and
undisputed market leader till the entry of Titan
Offshoot of India’s self-reliance and import
substitution concept
Main quality offered sturdiness and reliability
As a market leader very few aggressive
advertisement campaign
No new advertisement drive in recent years
Still holds a small market share among the old
faithful loyal
Lack of new and trendy design has led to erosion of
value among the new generation
5. 5
Titan
A joint venture between the Tata group and the Tamil Nadu
Industrial Development Corporation
Launched in 1984
Titan is today world’s sixth largest, integrated watch manufacturer
and India’s largest
4 factories - main watch and jewellery plants in Hosur near
Bangalore ( India’s ‘Silicon valley’), Watch Assembly plants at
Dehradun and in Himachal Pradesh, with an ECB plant in Goa
Investment of over US$130 million. A 450,000 sq.ft. state-of-the-
art facility
6. 6
Titan
Leader in the watch and jewellery businesses in India
• First and largest branded player in the jewellery (Tanishq)
• >50% share of the organized watch market
• Over 60 million watches sold across 30 countries
Brands offered: Steel, Edge, Raga, Sonata, Fasttrack,
Regalia, Bandhan, Sonata, Nebula, Flip
Recently Titan has taken a drive to improve its image as a
maker of contemporary style and design in wrist watches
Titan is trying to offer international quality/style at an
affordable price
7. 7
Time Products Division
Business
Financial
Market leader
• Only profitable watch company in India
• 50% of volume, 65% of value of organized industry
• Most admired consumer durable company (A&M magazine),
Superbrand 2003, Brand Equity Award (PHDCCI), Images
Fashion Award
• Established two brands – Titan and Sonata
Enviable network
• Widespread, visible and profitable retail and customer
service chains (~7250 retail outlets in 1800 towns, 165
exclusive showrooms, 600 service centres)
• Distributed in 30 countries
Large customer base - more than 60 million consumers
Efficient support system - integrated manufacturing
facilities, strong vendor base (~800 strong vendor base)
8. 8
Timex
The main focus is on reflecting a sporty and
fashionable look for the men
In the ladies segment it is offering highly
stylized bangle bracelet watch that are sleek
and sophisticated
The advertising campaign aims at focusing
on power, precision and timing
Used Brett Lee as brand ambassador
9. 9
Other Players
Mainly Rado, Tommy Hilfiger and Evidenza from
Longines
Tommy Hilfiger is positioned in the mid and premium
segment while the other two players are in the luxury
segment
Trying to catch the upmarket, urban, western-minded
youth
Also offer a sense of exclusivity and style as their
products are distributed through some selected outlets
Using high society and stylish brand ambassadors such
as Shahrukh Khan, Aishwarya Rai, Yana Gupta, Lisa
Ray
15. Demographic
pattern
Effect
Enablers
Outcome Consumption of lifestyle items
Consumerization
of Urban India
Rising % of
young
population
Increase
in income
levels
Changing
spending
pattern
More
number
of working
women
Increase in
spending
power
Rising
aspiration
levels
Organized retail market
at USD 21.5 billion by
2010 (CAGR 31%)
Increased
size of urban
population
16. Effect
Enablers
Outcome
Significant new opportunity from
young urban indian consumers
YULICS !
Two third of
Indians are
below 30 yrs
Median age
is 24 (35 in US,
41 in Japan)
Urban growth
at 3% vs 1%
overall
Youth growing
four times
faster
82 million at
20-34 age
in 2006
Liberalized
population will
be 56% in 2011
(41% in 2001)
Demographic
patterns
20. Forces Transforming Indian Watch Industry
Dramatic
Transformation
of the Indian
watch market
1. Shift in structure
of demand
• Volume growth
driven by the
low end
• Value growth
driven by
luxury segment
Brands ‘Titan’
and
‘Sonata’
3. Emergence of distinct
consumer segments
• Sharply defined
consumer segments
around distinct
buying factors
• More awareness of
brands and global
trends among
affluent urban
consumers
Sub-branding
strategy: Raga,
Fastrack, Nebula
•Exploring new
brand for luxury
segment
•Licensing: Tommy
Hilfiger watches
• Significant increase in competition in all
segments
- Luxury end : Swiss brands
- Mid to upper end : Global fashion/
Japanese brands
- Low end : Local/regional IMFQs, Chinese
imports
2. More global and local players
Dominant retail
presence: ‘World
of Titan’
Showrooms,
TimeZones
4. Emergence of new channels
• New retail outlets emerging (Dept.
stores/malls)
• Existing outlets (MBOs) getting
smarter looking
• Unorganised retail at low-end
21. 21
The Road Ahead
Incorporating new functionalities in the wrist watch
with the help of new technology
• Spot watches which offer advanced features such as
automatic time adjustment based on location, access to
continually updated content such as news, traffic alerts,
weather reports, stock quotes, sports scores and instant
messaging.
• The Times Data Link watch utilizes a revolutionary new
communications technology that literally zaps information
from personal computer (PC) to watch.
• IBM Linux-based wrist watch.
22. 22
The Road Ahead
Tapping the rural market
• Huge size of the rural market.
• As tele-density and infrastructure of the rural India
improves, it offers scope for sophisticated form of
advertising and method of sales.
• Launch of Sonata range of watches by Titan in the rural
market has met with great response from the buyers in
rural and semi-urban India.
• Indian rural bazaar is displaying a market trend towards
consumerism and demand for durable products.
23. 23
Agenda The Watch Industry
• Evolution
• Global perspective
Indian Watch Market
• Evolution
• Trends
• Price segmentation
Consumer Behaviour
Major Players
• HMT Watches Ltd.
• Titan Industries Ltd.
• Timex Watches Ltd.
Industry Analysis
• Positioning
• Advertising
• Distribution
• Branding
Future Trends
24. 24
The Watch Industry – Evolution
Conventional watches – standard spring powered
watch
Conventional watch evolved into electronic watch
Varieties:
• Jewelled lever watches (complex and expensive)
• Pin lever watches (recent development)
New generation watches evolved from electric watch
to Tuning Fork watch and ultimately settle at Quartz
Crystal electronic watch
Major players Switzerland, Japan and United States
60% Quartz, 27% Digital, 13% Mechanical
Source : Segmentation of the Indian Watch Market – Y.L.R.
Moorthi, IIMB
25. 25
The Watch Industry – Global
Perspective
Swiss Watch Industry
• Specialization in component manufacturing and watch assembling
• Competitive advantage – mechanical watches
• Undisputed leaders till ’70s (42% volume share and 78% value
share)
• First electronic watch invented by Max Hetzel, a Swiss Engineer in
1954
Japanese Watch Industry
• Took advantage of the quartz and digital technology
• Carved out a strong position in the world watch industry
• Competitive Advantage:
- Brand image based on quartz technology and accuracy
- Mass production which led to lower prices
26. 26
The Watch Industry
– Global Perspective (Contd.)
US Watch Industry
• Had some presence till 1970
• Post 1970, some chip manufacturers entered as suppliers of components
• By 1980s most of them disappeared due to fierce competition from
Japan and Hong Kong
• Major player is Timex
Hong Kong Watch Industry
• Entered the world watch scene in 1976
• Assembly type production
• Japan biggest supplier of movements
• Competitive Advantage:
- Cheap Labour
- Low Prices
27. 27
Indian Watch Industry – Evolution
1960: Indian Watch Industry came into being. Govt. took the
decision to set up the country’s first watch factory
1961: HMT set up India’s first watch factory at Bangalore in
collaboration with Citizen of Japan
1981: Hyderabad Allwyn Limited entered the watch industry in
collaboration with Seiko of Japan
1984: The beginning of a new era - entry of Titan, the Tata –TIDCO
joint sector company
1990: Timex enters the Indian market in partnership with Titan,
targeting the lower price segment
1997: Timex breaks away from Titan - increasing the already fierce
competition
28. 28
Indian Watch Industry – Evolution
(Contd.)
Government Policies
• Reserved the manufacture of straps and dials to the
small scale industry
• Imposed restrictions on import & manufacture of ECBs
Results
• Until the mid 1980s the industry was predominantly
producing mechanical watches.
• Total demand for watches greater than supply – the gap
in demand being met by smuggled watches unorganized
sector
29. 29
Indian Watch Industry – Trends
Rapid increase in target audience
Rise of consumerism and purchasing power
of the middle class
Bulk of the demand exists in lower and
middle segments
Newer segments – jewellery segment, etc.
Rise of demand of trendy watches
30. 30
Indian Watch Industry – Price
Segmentation
Source : Segmentation of the Indian Watch Market – Y.L.R. Moorthi, IIMB
Segment Average Price Margin
(estimated)
Mass Market Rs 450 11%
Popular Rs 750 15%
Premium Rs 1200 18%
Super-
Premium
Rs 3000 22%
31. 31
Consumer Behaviour
Transition from mere time keeping device with functional
benefits like durability, toughness and economy to a
personal wear reflecting people’s lifestyle and aspirations
• Multiple ownership
Price sensitive
Durability and utility are important aspects
Aesthetic appeal and trendy designs are very important
Brand Name continues to be an important driver in the
customer’s mind
Availability in different segments and for different
occasions makes the watch a suitable gift item
33. 33
HMT Ltd.
HMT Limited was established in 1953 in technical
collaboration with M/s. Oerlikon of Switzerland
Product range includes Machine Tools, Watches,
Tractors, Printing Machines among others
HMT started manufacturing Wrist Watches since 1962
Technical collaboration with Citizen, Japan
4 integrated manufacturing units
More than 7 million high quality watches/watch
movements per annum
Mechanical and Quartz watches
HMT Watch manufacturing units ISO-9001 certified
Source: http://www.indiainfoline.com
34. 34
Mechanical Watches -
Environment friendly
• Automatic
• Hand wound: Ladies, Gents
• Shakti: Ladies, Gents
Quartz Analog Watches
• Roman
- Alarm Watches
- EL Night Watches
- Multi Dial Watches
- Dater Watches
- Plain Watches
• Elegance
- Gold Line
- Bracelet
- Slim Line
• Tennmax
• Utsav
• Utsav Gem
• Lalit: Ladies, Gents, Pairs
• Sangam
• Swarna: Ladies, Gents
HMT Ltd. - Brands
Special Watches
• Freedom
• Braille
• Nurse Watches
• Fragrance Watch
35. 35
HMT Ltd. – Strategies
Targeted the global market
State-of-the-art technologies – IT Infrastructure
Collaboration with ISA Quartz, France and
Fraporlux, France apart from Citizen, Japan
36. 36
HMT Ltd. – Positioning
Positioning based on age, sex, competition
Teenagers
• Pace
Older customers
• Astra
The male segment
• Roman
First watch company to launch watches for children
• Zap
Utsav – to compete with Titan Raga
• Bracelets, Jewellery and Bangles
37. 37
HMT Ltd. – Distribution
Manufacturer – Dealer – Retailer – Customer
Established a strong distributor network of
10,000 distributors and 50,000 retail outlets
1990: Followed Titan in introducing C&F
Agents
38. 38
HMT Ltd. – Advertising
Huge early investments
Catchy slogan “If you have the inclination, we
have the Time”
Portrayed nationalistic instincts
• “Timekeepers to the Nation”
39. 39
Titan Industries Ltd.
Titan Industries Ltd. set up in 1987
Joint venture of the Tata Group and TIDCO
1st factory at Hosur
• Manufactured quartz analog electronic watches
Financial and technical collaboration with
Ebauches, France
1988: Estd. a component manufacturing facility
1990: Estd. a case manufacturing plant
1992: Integrated backwards to manufacture step
motors
JV with EDC2
• To manufacture electronic circuit blocks
Annually markets over 7 million watches
• 6th largest globally in the category of
“manufacturer brands”
40. 40
Titan Industries Ltd. – Brands
Insignia
• Made with high-grade anti-allergenic steel, scratch-resistant
sapphire crystal and special hard gold plating
Psi2000, Technology
• Sports & Multi-functional watches
Regalia, Royale
• Magic in gold and unique futuristic material
Classique
• Elegant corporate wear
Spectra
• Combines the sturdiness of steel with the richness of gold
Exacta
• The “Everyday Watch”
Raga
• Exclusive watches for women
Fastrack
• Contemporary styles for the young
Dash!
• For young boys and girls
Bandhan
• Watches for him and her
41. 41
Titan Industries Ltd. – Strategies
Early to manufacture watches targeted at US and European
markets
• The “Insignia Collection”
• Also makes watches for international labels
Roping in the crème of designers
• Pierre Ludwig (Cartier)
• Francis Humbertdiz (Omega)
Diversification into jewellery – Tanishq
Very wide range of products in terms of looks, function and
price points
Noted for their workmanship and reliability
• Reputation of being excellent value for money
The Titan Signet Club
• Customer loyalty programme
42. 42
Titan Industries Ltd. – Positioning
Market Segmentation
• The young and teenagers, who are looking for their first watch
• The low ownership segment like women
• Middle and upper segments of society
- Price range of Rs 500 – Rs 5000
International watch at Indian prices
A watch that builds your image
A brand which represents style, status and technology
• A “Good Looking Watch”
First watch company to brand its showrooms
• Titania Titan watch boutiques in Bangalore
• TimeZone
• The World of Titan
43. 43
Titan Industries Ltd. – Distribution
Manufacturer – Retailer – Customer
First to go for exclusive showrooms
• Did away with retailers
• Wholeseller’s importance reduced
Set up a chain of service centres, with close proximity to the
marketplace
Innovative planning of showrooms
• Watch buying a pleasurable experience
Extensive use of C&F agents to reduce distribution costs
44. 44
Titan Industries Ltd. – Advertising
Targeted the typically price sensitive yet discerning Indian
customer
• “International watch you can pay for in rupees”
• “You don’t need to pay in dollars, pounds or dirhams to buy a
Titan watch”
Targeted the premium segment of “look and fashion
conscious” customers
• “To find watches like these you don’t have to go to Europe,
Japan, America or a duty free shop”
Promoted the concept of a watch being the ideal gift
• “Next time your husband wants to buy you a saree, ask for a Titan
watch instead”
The rationale behind their ads being constant bombardment if
the “Titan” brand name
Ads are a blend of sophistication and simplicity
45. 45
Timex Watches Ltd.
1854: Started as the Waterbury Company, in
Connecticut's Naugatuck's Valley (the
Switzerland of America)
1990: Tied up with Titan to launch in India
Broke up with the Tata group in '97
Heart of the watches imported from America
Assembled in Timex factories in Noida
Launched the Indiglo technology
• First electroluminescent watch face in 1992
46. 46
Timex Watches Ltd. –
Brands
Aqura
Indiglo
Basics
Datalink
Timex Sportz
Lextra
Vista
Mariner
Gimmix
Source : Segmentation of the Indian Watch Market – Y.L.R. Moorthi, IIMB
47. 47
Timex Watches Ltd. –
Strategies
Delivering quality products at affordable prices
Basic objective: Change the mechanical watch user to
a quartz watch user
• Tap the untapped
Transition from plastic to metal
• To become market leader
Launched Vista brand in Rs 475 – Rs 900 range
• To appeal to small town customers
48. 48
Timex Watches Ltd.– Positioning
Initial understanding with Titan
• Titan keeps out of Plastic – High Price Segment
• Timex keeps out of Metal – Low Price Segment
“You don't have to be rich to afford a Timex”
Lower price segments
• Basics, Lextra, Vista
Youthful and trendy
• Aqura
For the discerning Sportsman
• Timex Sportz
For the children
• Gimmix
Premium segment
• Technologically superior multifunctional brands like
Datalink, Indiglo
50. 50
Timex Watches Ltd.–Advertising
Featured sports and adventurous personalities
• Rock climbing, Rafting etc.
Exclusivity of the watch is presented by celebrity endorsements
• President Bush declares his loyalty for Ironman
51. 51
Other Players
Westar
• Almost closed down
• No Brand Equity
• Upper segment cluttered
• Lack of distribution strength
Shivaki
• Launched in 1996
• Southern and Western markets
• Fashion accessory
• In problem
Maxima
• Assembled watch
• Water proof watch – Rs 350
• Failed with the launch of lower priced Titan and HMT products
SITCO
• Analog and digital watches (branded “IQ”)
• Failed due to lack of sustained promotion and marketing
• Now planning to cut prices
Hyderabad Allwyn Ltd.
• Launched in 1981
• Sourced watch movements from Seiko
• Lost out due to Organizational problems (PSUs)
52. 52
The Road Ahead …
More and more focus on new technology and multi-
functional utility
• Timex are the leaders in this area with watches like
- Internet Messenger
- Digital Heart Rate Fitness System
Watch consumption in India – 20 units/1000 people as
opposed to China – 50/1000
• Scope for increasing the demand of watches
Top 23 cities: 80% of Watch market
• The focus should increase on spreading the market to rural areas
Greater price segmentation, sp. lower end
• 2 fold advantage: ↑ Demand, ↑ Market spread
Greater competition from invisible sector and foreign
brands
53. 53
Sources and Bibliography
Product Management in India, 2nd
Ed.
• Ramanuj Majumdar
Segmentation of the Indian Watch Market
• Y.L.R. Moorthi, IIMB
(http://www.fba.nus.edu.sg/qm/journals/acrj/IndiaWatchM
arket.pdf)
http://www.indiainfoline.com
http://www.titanworld.com
http://www.timex.com