Titan’s jewellery market share rises in second quarter
Bengaluru: Watches and accessories firm Titan Co. Ltd Thursday said it continued to gain jewellery market share in the second quarter of 2017-18, despite a slowdown in July.
Overall sales growth at the company level has been close to expectations with good performances by the eyewear and watches divisions too, it said in a BSE filing.
While the July-September quarter is typically weak every year due to the lack of festivals and periods that are considered inauspicious, this year, the implementation of the goods and services tax (GST) also led to disruption, the firm said.
Still, its jewellery business – that contributed to roughly 80% of total revenue in 2016-17—continued to perform well. Although there was a brief slowdown in the first half of July, as customers made their purchases in June instead due to GST, growth in this business is expected to be fairly good for the quarter.
Under its flagship jewellery brand Tanishq, Titan launched two key collections in the period—Jewels of Royalty and Padmavati. The company has just launched the latter, in association with an upcoming Bollywood movie of the same name, and expects it to do well. Jewels of Royalty is a collection of high-value studded diamond jewellery aimed at the wedding segment, in line with Titan’s wider strategy of increasing its market share in India’s massive wedding jewellery market.
Titan added only four new Tanishq stores during the period. Net additions of stores are slow because the firm is closing its Gold Plus stores and there may be a lag in opening new Tanishq stores in their place, it said. It expects more aggressive expansion in the second half of 2017-18.
The company had launched its Gold Plus brand of jewellery stores in 2005 to target small towns in South India, and announced that it was going to merge that into its Tanishq brand this January.
The government’s decision to mandate jewellery stores to collect know-your-customer data, i.e. identity proof etc, for all sales over Rs50,000 on 23 August was another regulatory change that Titan had to deal with during the quarter. While the company has started to comply with the new regulation, industry representations are being made to relax the limit since it is too low a threshold and it is unlikely that people will resort to laundering at such low price points, it said.
Growth in Titan’s watch business was buoyed by exceptional online sales, although other retail formats grew too, despite a continued slowdown in exports. In its eyewear division, reported net sales may be muted, even as growth at the consumer price level is likely to be good, due to GST. The eyewear business unit decided to compensate its business associates for an increase in tax rates after GST was implemented without taking a price hike during the quarter, Titan said.
The Bengaluru-based company also said it is moving into its new corporate office in Electronic City, from its current base near Bellandur, by the end of September.