Timex is betting big on analogue watches in its second-largest market

New Delhi: India’s large and expanding consumer class, coupled with its low watch penetration, presents a significant opportunity for watchmakers. Timex Group India is looking to capitalize on this opportunity, with a heightened focus on domestic production, in line with the country's Make-in-India initiative.

A vast majority of its watches sold in India are already made locally. The company is exploring ways to manufacture even more global designs here to address customer demand for such styles while ensuring cost-efficiency.

In a conversation with Mint, its global president and CEO, Tobias Reiss-Schmidt, said that India was a critical driver of the company’s growth, highlighting its position as the second-largest market after North America. “India became our second-largest market as early as 2019, and cemented its position as the fastest-growing market for Timex since around 2017,” he said.

The US-based company enjoys strong brand awareness and appreciation in India, where it is recognized for its value-for-money offerings. However, it is currently not focused on expanding its smartwatches division.

While acknowledging the impact of smartwatches, Reiss-Schmidt said the company continues to focus on traditional watches as he believes the two cater to different needs. “I do see potential for both categories to thrive, though, and we recently launched some smartwatches that have been working quite well. But that share of business is very, very small. Our expertise lies in traditional watches. The market potential for traditional watches cannot be written off. We’ve been seeing growth in the past few years in that. We are confident that we can continue to gain market share in traditional watches going forward,” he said.

“We have also learned that smartwatches and traditional watches are two different markets in India. They are worn for different reasons. Yes, every consumer product competes with another for a share of the wallet. But then, over time, a smartwatch consumer also becomes an analogue watch consumer. We see both categories growing very nicely here,” he added.

The global watch industry was hugely disrupted during the pandemic, after which several companies had to make adjustments amid supply-chain issues. “We are still feeling repercussions of covid in some way, because the global market is still kind of finding its equilibrium. Now retailers have a little bit too much inventory. We are lucky we’ve been able to manage through it quite well. But of course, it has had significant repercussions on cost,” he added.

Timex’s luxury division – or what is called the bridge-to-luxury segment of watches – is doing particularly well in India. Brands such as Versace, for which it manufacturers watches, has seen a strong growth. “There is a growing willingness to spend on higher-priced watches, indicating a shift towards luxury segments. There was a time where our offerings in India were focused solely around ₹1,500-2,000 watches – about six to eight years ago. But now we offer watches between ₹15,000-20,000 too, and there is actually a segment of buyers at the fashion price point,” he added.

The company works with a network of about 5,000 outlets across traditional and modern retail. In the nine months to December 31, Timex Group India Ltd reported a revenue of ₹328.14 crore, higher than ₹300.43 crore in the same period a year ago. But it reported a net profit of ₹13.7 crore during the period, lower than ₹24.13 crore a year ago, largely because it made substantial marketing expenses this year, under its “other expenses” subhead.