Despite the rising popularity of smart watches, the market for quartz and mechanical watches is growing—globally as well as in India. 4Q21 (Oct-Dec 2021) is the biggest quarter for wearable watches in India on record, shows data from International Data Corp, or IDC. Watches grew 364.1% in 2021, the strongest YoY increase ever. India-based brands now account for 3/4th of the overall wearable watch market. But even after this impressive growth, ownership remains low—less than 10% Indians own watches.
Despite the rising popularity of smart watches, the market for quartz and mechanical watches is growing—globally as well as in India. 4Q21 (Oct-Dec 2021) is the biggest quarter for wearable watches in India on record, shows data from International Data Corp, or IDC. Watches grew 364.1% in 2021, the strongest YoY increase ever. India-based brands now account for 3/4th of the overall wearable watch market. But even after this impressive growth, ownership remains low—less than 10% Indians own watches.
Titan, which is India’s largest watchmaker and the front-runner organized maker of time-pieces in the subcontinent, saw a more than 200% jump in sales this last quarter, even though on a small base. This performance isn’t just on account of pent-up demand following the lifting of Covid lockdowns. Titan’s watches and wearables business achieved its highest ever quarterly revenue in Q1-FY23, growing 158% YoY.
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Titan, which is India’s largest watchmaker and the front-runner organized maker of time-pieces in the subcontinent, saw a more than 200% jump in sales this last quarter, even though on a small base. This performance isn’t just on account of pent-up demand following the lifting of Covid lockdowns. Titan’s watches and wearables business achieved its highest ever quarterly revenue in Q1-FY23, growing 158% YoY.
The company earns around ₹2,500 crore in annual revenue from its watch division. Its portfolio of brands has product families such as Xylys, Edge, Nebula, Raga, Sonata, Fastrack and Titan watches. What is the scope for Titan to grow even faster, and where can this growth come from?
While the home market has plenty of headroom for growth, Titan can also tap export markets in a bigger way. Its international portfolio currently generates around 10% of revenue in the watches division for the Bengaluru-headquartered company, part of it driven by the white-label-business that includes international brands Tommy Hilfiger, Kenneth Cole, Anne Klein, Olivia Burton, Police and Coach, the foreign brand for which Titan has a licence to make fashion watches. Exports, not small by any stretch, could grow further if Titan invests in stores in key global cities giving it the right visibility. An earlier attempt, a store in Switzerland, didn’t do well but that shouldn’t hold it back.
Expanding in India may be easier, given low levels of watch ownership, for which it may have to leverage new technologies, and be disruptive with pricing strategy and even acquire more brands.
The big edge Titan enjoys is access to distribution muscle and the back-end business marketing and sales resources of the substantial jewellery business.
All it probably needs is to push the pedal harder on launching limited editions and collectible models, perhaps taking a leaf out of the world’s largest maker of mainstream watches, Swatch’s, book. Especially the series it has just launched of watches fashioned after its sister brand's iconic Speedmaster, called the Moonwatch. This is an affordable, battery-operated version of the more sought-after mechanical version made by Omega which earned its stripes for being the first watch to go to the moon, worn by Neil Armstrong. The move, gimmicky, many would say, has nevertheless boosted the actual Speedmaster’s sales by 50%. Then, not so long ago, Swatch commissioned British Damien Hirst in 2018 to design a series of watches to commemorate Mickey Mouse's 90th birthday. The watches sold out superfast and aftermarket sales reached prices that were several multiples higher.
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If Titan chooses to try similar stuff, it’ll first have to sharply segment its product families, both by product positioning as well as pricing and model pipeline strategy—something not too hard to do.
Titan does not own nor have a heritage of craftsmanship or innovation for high-end watchmaking. It is still one of the largest watch-making companies in the world. And it has tremendous brand recall. Being a part of the Tata Group gives definite advantages. It can always think of Jaguar-LandRover watches, Tata Motors Watches, Air-India watches, Taj hotel watches and so on. Basically, time-pieces that capture milestones in the history of Indian business, economy, art, sports, music, literature, iconic figures and companies are all options for limited editions and memoirs. Such series can also broaden Titan's product appeal and keep sales humming along.
The Swatch brand is seen as cool by young millennials. Its focus on sustainability and the environment helps. In keeping with ESG norms, its watches now also come in “bio-ceramic", and it’s also launching more and more automatic and solar-powered watches to reduce dependency on batteries and the like. Titan too can easily extend the goodwill intrinsic to all Tata companies to its watches. They can be made with environment-friendly materials, and in designs and styles that resonate in India as well as with the diaspora overseas and with-it young buyers (It’s got a solar-powered watch already that it launched in 2017 for about $100).
So far, Titan's watches are seen as affordable and accessible but if it can make the leap to become sought after and aspirational for everyday consumers as well as collectors, it would by default start to gain market share inside as well as outside its home country.
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