BackWearable technology is a big opportunity, says Timex CEO Tobias Reiss-Schmidt
Timex CEO Tobias Reiss-Schmidt on opportunity in wearable technology segment, the company's expectations of the Indian market and trends in the global watch market
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Tobias Reiss-Schmidt, president and chief executive officer of US-based watchmaker Timex Group, says wearable electronic devices are a bright spot in an otherwise crowded watch market.
Founded in 1864, Timex has been in India for 25 years. In an interview, Reiss-Schmidt, who joined Timex Group in 2015, said India has already become the company’s third largest market. The company is planning to expand its presence in the country by increasing production capacity and widening its retail footprint. Timex will also launch its e-commerce platform in India this month. Reiss-Schmidt, on his second visit to the country, spoke about his expectations of the Indian market, forthcoming product launches and what Indians like in their watches. Edited excerpts:
How is Timex positioned globally?
We are a private company; we don’t share revenues (figures) but we are present in almost every market in the world. Timex is positioned as a very mass-premium brand with products ranging from $10 to $1,500. We want to focus on the fashion and youth segment, which is the most dynamic segment in the watch market right now.
It is difficult to put a number on the points of sale because we usually do business with retailers. For example, we have 4,000 points of sale in India and 1,500 in Italy. But we own only 64 stores in India and even less in Italy. Outside of India, owning stores is not a big part of our distribution strategy. Our business is mostly through retailers and online.
How much does India contribute to your global revenue?
India is a very important market for us. It may be in the mid-single digits but it is our third largest market, after the US and Western Europe. It is the fastest growing market right now. We grew 15% in the last financial year, after many years of continued double-digit growth.
If India keeps growing at the same pace, it could become our second largest market within three years. In India, the sweet spot for Timex is between Rs2,000 and Rs6,000. We have created a very strong position for ourselves here over the past few years and the market environment is great. The challenge, here, will be to manage growth.
What are your expansion plans for India?
We own 64 stores in India and we are planning to grow the store base here. We also want to invest in our production capabilities. Ten per cent of our overall production happens in India and that number is rapidly growing. All the products that are sold in India are produced here, given that we started producing here a year ago. We have a manufacturing unit in Himachal Pradesh.
Production is a big part of our strategy in India. We are active in the “Make in India" initiative. We are also selling goods that are made in India, in Europe and in the West. We don’t look at India as an opportunity to maximize profitability, but we are looking to maximize growth. In India, we think we can differentiate in the youth market. We still see opportunity in the core business of our brand, which is to deliver great design and great craftsmanship.
We are constantly looking at how global Timex Group can support Timex Group India to continue this kind of development (double-digit growth) and how we can balance the global strategy to do what is right for the Indian consumer.
What is your e-commerce strategy?
At present, e-commerce contributes 10-15% to our global business. However, e-commerce business varies from place to place. While 25% of the overall watch category is sold online in the US, there are markets like Italy which are very traditional when it comes to online.
As a company, we are taking a balanced approach towards e-commerce. Our priority globally and in India is to work very closely with our retail partners in the bricks-and-mortar space. Meanwhile, we are building our own website. We will launch our website in India in the next few days, which is a big step for us. The website will be a commercial opportunity plus a chance to showcase all our products.
Is the watch market in India crowded?
Yes. It’s not just India; the watch market globally is crowded. It is a very competitive space and you have to make sure that you stand out.
How do you differentiate yourself in that case?
Wearable (technology) segment is one opportunity. It’s a new market and is still in its infancy. At present, wearable segment is on the low-single digit side of the overall watch market but on an average, it is seeing healthy growth of 15%, on an average. That’s a general estimate.
We are better positioned than most of our competitors to participate successfully in the wearable market when it becomes relevant and we have already launched a number of products.
We had recently launched Timex Metropolitan+ (a smartwatch-cum-activity tracker). Very soon, we are going to launch a new type of fitness tracker. For the Indian market, we have added an SOS function in the tracker because of safety concerns that people have here. With this feature, the consumers will be able to send SOS messages to predefined contacts, which we feel will be a very attractive feature for the Indian market.
Where this new product differentiates itself is that it is not made by a technology company but by a watchmaker. We have a good know-how of technology space. We had invented the sports time category with Timex Ironman watches, the first sports watch.
Globally, what are the most striking trends in the watch segment?
There is a common myth that nobody needs a watch any more; people have time on the phone. One strong trend that we are seeing is that people are coming back to watches again. We have some specific data that young people in the US and Western Europe are moving to watches. The acceptance of watches as a fashion accessory is getting stronger and stronger.
How is the Indian consumer different?
Indian consumers are different on the design front. In the US and Western Europe, the trend is for minimalist design. However, Indian consumers prefer watches with multiple features, complicated big dials and different colours. Watches with a lot of needles and additional features are a hit here.
We have a design studio in Italy where most of our watches are designed. We also have other design groups in Hong Kong and the US. But watches for the Indian market are mostly designed in Italy.
Personally, what kind of designs do you like?
I like what Indians like. Given that I am a tall guy, I like bigger dials. I like watches that are complicated and have additional functions.
Do you have a watch collection?
Yes. My collection changes after a while but I have 25 watches that I like and that I keep in rotation. I only own Timex watches.
What other watch brands do you like or want to own?
When you are in the watch world, you always have an aspiration for Swiss brands. Watchmaking is an art and there are a few brands which I would love to own. Patek Philippe is a brand I really admire. They are doing some amazing work. Another one would be IWC (International Watch Co.). But these are only a few examples.
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