Mumbai: Responding to group chairman Ratan Tata’s challenge to produce a people’s watch, Titan is launching a range of mass-market watches that will, for the first time, pit the high-end brand against cheap imports and locally-made watches.
The range of five-10 women’s and men’s watches will be sold at under Rs300. The watches are being introduced under the Sonata brand, a value-for-money brand introduced by the world’s fourth-largest watch maker to compete with the likes of Timex, its erstwhile partner. Sonata watches are currently endorsed by cricket icon Mahendra Singh Dhoni, while Titan is associated with Bollywood star Aamir Khan.
Titan’s chief operating officer (watches) Harish Bhat said, “The company is planning to initially launch around five-10 models at Rs250-300 and subsequently treble these low-priced models in the next two years.” Nearly 68% of the Indian watch market (on a value basis), or 85% (on a volume basis), comprise watches priced below Rs500. Sonata is a key brand for the company as it contributed more than 50% of watch segment revenues of Rs653.6 crore.
In an unconventional distribution strategy, these ultra low-priced watches will be sold not only through Titan showrooms and multi-brand outlets, but also through Tata Kisan Sansars spread across almost 14,000 villages in the country.
The Kisan Sansars will be crucial distribution outlets in the rural areas, expected to account for most of its sales. The company is also exploring tie-ups with fertilizer and jewellery shops that will help them penetrate the rural market.
With this initiative, Titan is the second group company after Tata Motors (which is coming out with a Rs1-lakh car) to respond to Tata’s challenge to produce products for the bottom of the pyramid that can be afforded by a large segment of the country’s over one billion population.
Currently, 36 million watches are sold annually in India; the middle class alone is estimated to be 300-million strong.
Titan Industries has been consciously positioning itself as a high-end aspirational brand to compete with the Swiss watch makers, launching ultra-premium products such as Xylys and Nebula. But Tata fears that if Titan does not launch a low-priced product, Chinese imports that have already begun to flood the Indian market will gain the upper hand. Titan has test-marketed 5-10 mass-market watches in Tamil Nadu and Uttar Pradesh, and now plans to take these watches national. “We have been constantly trying to penetrate this market. We launched a sub-500 and then sub-400, and now sub-300 priced watch,” Bhat said. Currently, Sonata watches are priced between Rs395 and Rs1,250.
These mass-market launches are a result of the company’s over a year’s detailed consumer research into rural and semi-urban markets. This included segmentation studies of current users as well as non-users. In addition, some specific products and price points were actually piloted in three states for over six months.
Titan’s low-priced watches are battling mainly the unorganized sector, especially cheap Chinese imports which are available for as little as Rs75-100, and Indian brands such as HMT and Maxima.
“To reduce costs, we will both outsource as well as manufacture in-house the components required to make these watches,” Bhat added. Sonata is the largest selling watch brand in the country with over four million units sold annually. Timex, the No. 2 player, sells fewer than 1.2 million watches.
The company already sources eyewear and watch components from China since it has a sourcing base at Hong Kong. According to All India Federation of Horological Industries, the organized watch sector is 14 million units (valued at $203 million, or Rs893.2 crore) annually.