The Timex group has a unique portfolio of brands and products that stand out at a fair like BaselWorld. Their products, wildly popular across the world, are often high on value and technology. Last year, when Mint spoke to Kapil Kapoor, global chief operating officer of Timex Group, he said he was cautiously optimistic of life after the slump.
We caught up with him this year to talk about the core Timex brand, the brand’s fitness proposition, the group’s brand architecture for India and the new Intelligence Quartz collection. V.D. Wadhwa, head of Timex India, joined us.
This year too Timex has a substantial offering in the health and fitness segment.
We are expanding our health and fitness segment. (At the) end of the day, there are only a certain number of people who are really into fitness with commitment. But there are a lot of people who want to feel good. You know? Maybe they will diet a little, do a little bit of exercise, go for a walk in the evening...that category is pretty large. And we want to cater to that category pretty effectively.
Cautiously optimistic: Timex Group global chief operating officer Kapil Kapoor
So you mean that these products will be fitness-oriented, but not as hardcore as the Ironman range.
Correct. The products will make more of a lifestyle statement than a fitness statement. When you wear one of these watches, you are telling people that you like to take care of yourself. Some of the watches have a pedometer, some have calorimeters. I suppose there is a certain fad aspect to it. But it works. You have a certain calorie burn target for today. And you know you have to take 10,000 steps to achieve that. So it helps you.
From a demographic perspective, we are really targeting the young, coming-of-age woman who is really conscious of being fit. That is our principle target audience. Though I have one piece of advice. Don’t gift it to your significant other. You’ll be in the doghouse after that. It just won’t convey the right message.
But the brand does have a wide range of watches with a lot of technology in them.
In fact, we’ve started calling some of them wrist instruments because of the sophistication of what you can track and record with them. They can track a whole variety of data. Some can even tell when you need to hydrate or take nutrition based on your activity and calorie burn rate.
Does this translate into a high investment into research and development?
It does. We do invest a lot. But it is very hard to put a number to this investment because this investment happens in a number of ways. Some of it, for instance, could be associated with marketing. In the US, we sponsor the New York Giants football team. We sponsor their performance centre where they train. We work with the coaches and the trainers who then keep feeding data back to us, which helps us not only market but also make products.
The TSeries Racing Chrono timepiece.
So it is difficult to keep a tab on it.
Is there a strategic push on products such as wrist instruments?
Yes. And this is important in a cluttered market. Now look at this fair. When you walk around and look at all these products from all these brands...beyond a point you are hit by watch fatigue. Everything begins to look the same. You lose the ability to tell one brand or model from the other.
In such a situation, when you have a strong, high-tech sports model, you stand out. For instance, here in Basel, we have a Timex Sports booth, which is placed right in the middle of a bunch of our fashion brands like Valentino and Ferragamo. It makes people go wow. I think we’ve got a point of differentiation. It has become a USP for us.
How do you balance focus between sporty, outdoor pieces and more elegant, business-wear style of watches?
From an image perspective, I think we do focus on the sporty and outdoor segment. That is not to say that we don’t take the style segment seriously. It is a big part of the business. Sometimes, you need to position yourself so that the consumer identifies with you instantaneously. But once they buy into the brand, you often see them buying some of our very elegant, classic pieces. We have some watches that are as good as any brand in that segment.
But that is now what we are principally known for.
Communicating this diversity must be a challenge?
It is a challenge when you have as much width as we do. You have to define an unambiguous brand architecture. And this has been a challenge for us. For instance, what sells in emerging markets is very different from what sells in developed markets. And the brand tends to mutate when it moves from one country to another. This is not such a problem for other brands, which are focused on very tight, narrow niches.
In India, the Timex Group now handles a dozen brands. What is your brand architecture in India?
We have seven brands. Timex is the mass brand with most points of sale and with a price range between Rs 1,000 and Rs 11,000. Next is Nautica, which ranges from Rs 7,000 to Rs 20,000. Next is Marc Ecko, a flashy fashion brand, which ranges from Rs 4,500 to Rs 12,000. A trendy, pop-culture oriented brand. Nautica is fashion-oriented as well. But not as loud.
Then there are luxury fashion brands: Ferragamo and Versace. They start from around Rs 40,000 going up to Rs 8 lakh. We also have an India-focused women’s brand, Tarun Tahiliani, which is between Rs 10,000 and Rs 35,000. And now, we are just launching Felix, a brand targeted at 19 to 25-year olds with prices between Rs 1,500 and Rs 3,500.
Our strategy in India is to connect with consumers at different price points. One brand cannot mean everything to everybody.
Now you would know the Indian watch retail business well. How mature is it? A lot of brands seem to be concerned with the maturity levels.
Today, around 10% of the business in India is organized. This has doubled in the last five years. It used to be around 4% in 2006. Not only for us, but overall for the category, it is around 9%. And we are still aggressively opening new outlets in India.
Has the TX brand come to India?
No. In fact, we are somewhat slowing down on TX as a brand. Though we are launching watches in the Timex brand using all the proprietary TX technologies. We are using the tech to create a new segment within Timex called Intelligent Quartz. Intelligent Quartz is a range that is smart both in and out.
Which means that they are not only good looking watches on the outside but they have very smart movements inside. For the first time, we are using quartz technology to bring functions to these watches that were so far available only in high-end mechanical watches that cost several thousands of dollars.
The watches have motors inside, which can do several functions. So we can have busy dials with a number of functions besides telling time. Previously, motors were restricted to just telling the time.
We’ve seen similar products from Tissot as well. Is that a new emerging segment? People who want complicated watches without having to pay mechanical prices for it?
There are two segments that have developed lately. One is, of course, the luxury segment that has bounced back very well from the slump. The other is a new, interesting segment. There is a kind of inverted exclusivity. This is where they are saying that bad value is bad. So they buy into good value. They can afford better. But they still take pleasure in buying good value. So they may drive to work in a Porsche or something. But they will make a big deal out of having bought a really good $100 watch. They love to talk about it. They think it suits their personality better. You know, and they know, that they could have bought a $5,000 watch.
It is a new mentality, a new concept. This inverted exclusivity. People are saying: look, I don’t have to buy something extremely expensive to be snobbish about it. I can be snobbish about good value as well.
Are you still cautiously optimistic this year? Or are you feeling slightly more positive?
Last year, we had the strongest year in four years. So our cautious optimism has turned into a little more full-blooded optimism. We are carrying through a lot of optimism in 2011. There are some question marks hanging over us I am concerned about. One is the supply chain coming out of Japan that I am concerned about post the earthquake. For now, it looks safe. But it is hard to tell right now.
The second is the situation in the Middle East. This is hurting our luxury business, which is somewhat dependant on that region.
But having said that, the mood at the fair is buoyant. The supply chain is depleted and there is a huge opportunity to ramp up supplies. So the mood is very positive. But I think it is upon me to temper that mood somehow and be a little more cautious.