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NEW DELHI : Despite three waves of covid-19 and accompanying business disruptions, Titan Co. Ltd remains bullish about its jewellery, watches and eyewear businesses. In an interview, C.K. Venkataraman, managing director, Titan, said he expects long-term consumers to buy gold jewellery as a safe haven and switch to branded players for eyewear. Edited excerpts:

How has business recovery been since the third wave?

It’s a little complicated because of the price of gold in the last couple of weeks, which is partly to do with what’s happening in the world, the conflict etc. I look at the business from a slightly longer-term point of view. I’m not at all looking at what happened last week, and therefore getting worked up about it because the competitive advantage of your business is determined in a slightly longer timeframe. So, after wave three in January, we’ve sort of bounced back. How much we have bounced back, frankly I’m not even looking at that. All we know is that we are back to growth post the covid wave three. All our conversations now are about FY23-24.

Is this driven by wedding-linked linked demand or did you see other signs?

We measure new customer as a share of the total and the new customer share has been steadily increasing, which means that there is a steady migration happening from the rest of the industry.

It’s been a mix of factors. One is, in the pandemic, all of us have thought so much about authenticity, about relationships and what matters to us in life. One of the off-shoots of that kind of thinking appears to be the preference for more trusted brands.

The second is, the competitive advantage of the organized players in every industry has increased because of the supply chains… from an operational advantage point of view, organized players like us have done better and even among organized players, we have done well.

Third is, in the pandemic, there has been a lot of agility, collaborative work, innovation, experimentation and scale-up of new ideas. Focusing on every state as a separate market, for instance, especially in the jewellery business, creating a 360-degree programme for each state, taking into account the customer tastes, the price points, even the celebrities that we associate with. All these things have increased our market share and the share of new customers is a signal of that.

In the last two years, have you seen any change in consumer behaviour towards discretionary products—have ticket sizes come down or are they buying smaller pieces?

Not really, because if you look at the economic situation in the country, the top half of the income class has actually come out better in the pandemic than even pre-covid.

When all of us were sitting at home and not necessarily earning less, we were dramatically constrained from spending less on big ticket items, especially travel, big weddings. We saved money on the one hand. Then if you look at the stock market capitalization, between 1 January 2020 and 1 January 2022, the difference is huge. The wealth of so many millions of people has actually increased. That’s all sitting in the top half of the pyramid where Titan is in terms of its customers. That’s one positive thing from an enabling aspect. Also, jewellery is not actually a discretionary spend, it is a store of value. The ticket sizes may make it look discretionary. People, when they’re anxious about their circumstances, they tend to actually invest in jewellery in India because it is a safe haven. So, that is the advantage we had as a company with more than 75% of our business coming from jewellery. Even in the other categories, eye-care is not discretionary, it’s a necessity. Watches, yes, are discretionary, even there, we ended up doing pretty well. One big advantage we have as a company is our exceptional customer loyalty programme and on top of that, we have the most beautiful of relationships.

What is your strategy for smaller towns?

The unique thing about the jewellery industry particularly is that we have a huge opportunity in Mumbai, and an opportunity in a small town called Kudal in Ratnagiri district or in Delhi-NCR as well as in Ballabhgarh which is 100-kilometers away in Haryana. We are simultaneously souping up the big stores in Delhi-NCR and also setting up stores in places like Ballabhgarh. We already are very deeply penetrated, say, in Haryana. We are in Ambala, Hissar, Panipat, Rohtak, Yamuna Nagar, Karnal, Ballabhgarh, Faridabad.

We are going deeper and deeper because the category fortunately is very deeply penetrated. Normally, a company would get its growth more and more perhaps through distribution expansion in smaller towns. Whereas in our case, it is simultaneous. The share may not actually change because Chennai, for example, is a 20,000 crore jewellery market. So, even if we put up 10 extra stores in Tamil Nadu, that may give us let’s say 50 crore in one year. With just three stores, we may get Rs250 crore in Chennai also. We are certainly pushing in the small town in a big-big way and succeeding exceedingly well, across the board and not just in jewellery.

Has the pandemic prompted more innovations at the company?

The opportunity for Titan Co. in each one of our existing businesses is actually huge. If I take Titan, which is the analog watch business, the accessory role of an analog watch, in my view, will exist for a very, very long time. We are very confident that there are no substitutes for a Rs25,000 mechanical watch with its own beauty, or Rs15,000 Raga watch or Rs2,00,000 Edge Mechanical watch.

We are pushing (the analog watch business) through multiple programmes including transformation in retail, product innovation, brand investment and visibility.

Second, is the wearables business, where we are a late entrant but in the last few months, we’ve made up a lot of the lost ground. Starting the second half of CY22 and into CY23, we see a lot of action on the wearables front.

The jewellery business, of course, is huge. We are at may be 6-8% kind of market share there and going strong. We have multiple brands—Tanishq, Mia, Zoya, CaratLane. So, it’s a huge growth opportunity.

International ambition for the jewellery business is an equally large and exciting piece. The NRI audience in the Gulf countries, in North America, etc, it’s just the thing to be taken by Tanishq over the next few years. We’re setting up stores in all of these places. When it comes to eye care, probably the only business which will never ever go out of business, because myopia is increasing in India. The saree business is a huge market—we are a very recent entrant but are getting very exciting responses from wherever we’ve set up stores. The perfume category is under-penetrated in India—with Skinn and Fastrack perfumes—we want to make fragrances democratic and upgrade a lot of the deodorant market through multiple initiatives, product innovation, distribution, sampling and marketing communications. So, every business is poised for growth.

Are there any white spaces you see in your lifestyle portfolio that you need to fill?

Not at the moment, no.

Any acquisition in the pipeline in any category, like you acquired CaratLane in jewellery?

We would share such things at the right time.

But acquisitions are not below the radar for you.

Not out of the radar. But nothing to share specifically on this at this time.

 

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