Wrist Watch

Industry Overview
India is an under penetrated market for watches
27% of Indians own a watch

Total estimated market as of 2005

Volume ~35 mn units
Value: Rs 2328 crores (USD 530 Mn)

Vast proportion of the Indian market is below Rs

500
~68% (85% by volume)

Market has been split into low end, mass market,

mid market, premium
2

Major Players

HMT

First major watch manufacturer in India and

undisputed market leader till the entry of Titan
Offshoot of Indias self-reliance and import
substitution concept
Main quality offered sturdiness and reliability
As a market leader very few aggressive
advertisement campaign
No new advertisement drive in recent years
Still holds a small market share among the old
faithful loyal
Lack of new and trendy design has led to erosion of
value among the new generation

Titan
A joint venture between the Tata group and the Tamil Nadu
Industrial Development Corporation
Launched in 1984
Titan is today worlds sixth largest, integrated watch manufacturer
and Indias largest
4 factories - main watch and jewellery plants in Hosur near
Bangalore ( Indias Silicon valley), Watch Assembly plants at
Dehradun and in Himachal Pradesh, with an ECB plant in Goa
Investment of over US$130 million. A 450,000 sq.ft. state-of-theart facility
5

Titan
Leader in the watch and jewellery businesses in India
First and largest branded player in the jewellery (Tanishq)
>50% share of the organized watch market
Over 60 million watches sold across 30 countries

Brands offered: Steel, Edge, Raga, Sonata, Fasttrack,

Regalia, Bandhan, Sonata, Nebula, Flip
Recently Titan has taken a drive to improve its image as a
maker of contemporary style and design in wrist watches
Titan is trying to offer international quality/style at an
affordable price
6

Time Products Division

Market leader
Only profitable watch company in India
50% of volume, 65% of value of organized industry
Most admired consumer durable company (A&M magazine),
Superbrand 2003, Brand Equity Award (PHDCCI), Images
Fashion Award
Established two brands Titan and Sonata

Business

Enviable network
Widespread, visible and profitable retail and customer
service chains (~7250 retail outlets in 1800 towns, 165
exclusive showrooms, 600 service centres)
Distributed in 30 countries

Financial

Large customer base - more than 60 million consumers

Efficient support system - integrated manufacturing
facilities, strong vendor base (~800 strong vendor base)

Timex
The main focus is on reflecting a sporty and
fashionable look for the men
In the ladies segment it is offering highly
stylized bangle bracelet watch that are sleek
and sophisticated
The advertising campaign aims at focusing
on power, precision and timing
Used Brett Lee as brand ambassador
8

Other Players
Mainly Rado, Tommy Hilfiger and Evidenza from
Longines
Tommy Hilfiger is positioned in the mid and premium
segment while the other two players are in the luxury
segment
Trying to catch the upmarket, urban, western-minded
youth
Also offer a sense of exclusivity and style as their
products are distributed through some selected outlets
Using high society and stylish brand ambassadors such
as Shahrukh Khan, Aishwarya Rai, Yana Gupta, Lisa
Ray
9

Segmentation

10

The Watch Market in India

(by value 06-07)

Premium (> Rs 5k)

Valued at Rs 370 crores
Swiss brands: Tissot, Omega, Rolex

Mass (< Rs 400)

Fashion brands: Fossil, Calvin Klein,

Valued at Rs 300 crores

11%

Giordano, Esprit

13%

Grey market, Chinese, etc.

43%
Low-end (Rs 400-1000)
Valued at Rs 1200 crores

Sonata, HMT, Maxima

11

33%
Mid-upper (Rs 1k-5k)
Valued at Rs 938 crores

Titan, Citizen, Timex,

Swatch, Espirit

Volumes Growth, Driven by Low End

~35-40 mn

Volume of watches sold

~25 mn
~21 mn

Luxury

0.015
3.9

Mid-upper
Low-end

9.5
7.5

Mass

0.05
3.7

2700 crs

0.22
4.5-5.2

8-10

375 crs

25-35

Tissot, Omega,
Rolex

850 crs

4-7

Titan, Citizen,
Timex, Swatch,
Espirit

1200 crs

8-11

Sonata, HMT,
Maxima

300 crs

8-11

Grey mkt,
Chinese, etc.

17.5-20

12.0
9.3

CAGR, % BRANDS

13.5-16

Market implications from 01-02 to 06-07

Source:

Overall volume growth significantly driven by low-end and mass market

Mid-upper category growing at 7%, largely driven by Titan

IRS 95,99,01, NCAER 95,00; internal data; press clippings; interviews; market visits; annual reports

Watch Market Map

Formal/Classic
Raymond
Weil
Tissot

Sonata,
HMT,
Maxima
500

Omega, Rado,
Longines

Titan
1000

Timex

Fastrack

2000

Citizen
4000

XYLYS
5000

10000

Espirit, Swatch Fossil

Giordano,
DKNY,
Carrera
Tommy Hilfiger, Accent

Fashion/Sporty

Nebula

Price
20,000 +

Tag Heuer,
Hugo Boss,
C Dior

The Emerging Trends

14

Rising % of
young
population

Demographic
pattern

Increase
in income
levels

Changing
spending
pattern

Consumerization
of Urban India

Effect
Increased
size of urban
population

Enablers

Outcome

More
number
of working
women

Increase in
spending
power

Consumption of lifestyle items

Rising
aspiration
levels

Organized retail market

at USD 21.5 billion by
2010 (CAGR 31%)

Demographic
patterns

Two third of
Indians are
below 30 yrs

Effect

Enablers

Outcome

Median age
is 24 (35 in US,
41 in Japan)

Urban growth
at 3% vs 1%
overall

YULICS !

Youth growing
four times
faster

82 million at
20-34 age
in 2006

Liberalized
population will
be 56% in 2011
(41% in 2001)

Significant new opportunity from

young urban indian consumers

Urban Households

Increasing exposure of middle class creates new opportunities

The Flow of Money

By 2009-10 lower income group falls; higher income doubles

Watch Industry in India: Where is it

heading?

19

Forces Transforming Indian Watch Industry

2. More global and local players

Brands Titan
and

Significant increase in competition in all

segments

Sonata

Luxury end : Swiss brands

Mid to upper end : Global fashion/
Japanese brands
Low end : Local/regional IMFQs, Chinese
imports

1. Shift in structure
of demand

3. Emergence of distinct
consumer segments

Volume growth
driven by the
low end
Value growth
driven by
luxury segment

Dominant retail
presence: World
of Titan
Showrooms,
TimeZones

Exploring new
brand for luxury
segment
Licensing: Tommy
Hilfiger watches

Dramatic
Transformation
of the Indian
watch market

Sharply defined
consumer segments
around distinct
buying factors
More awareness of
brands and global
trends among
affluent urban
consumers

4. Emergence of new channels

New retail outlets emerging (Dept.

stores/malls)
Existing outlets (MBOs) getting
smarter looking
Unorganised retail at low-end

Sub-branding
strategy: Raga,
Fastrack, Nebula

The Road Ahead

Incorporating new functionalities in the wrist watch
with the help of new technology

21

Spot watches which offer advanced features such as

automatic time adjustment based on location, access to
continually updated content such as news, traffic alerts,
weather reports, stock quotes, sports scores and instant
messaging.

The Times Data Link watch utilizes a revolutionary new

communications technology that literally zaps information
from personal computer (PC) to watch.

IBM Linux-based wrist watch.

The Road Ahead

Tapping the rural market

22

Huge size of the rural market.

As tele-density and infrastructure of the rural India

improves, it offers scope for sophisticated form of
advertising and method of sales.

Launch of Sonata range of watches by Titan in the rural

market has met with great response from the buyers in
rural and semi-urban India.

Indian rural bazaar is displaying a market trend towards

consumerism and demand for durable products.

Agenda

The Watch Industry

Evolution
Global perspective

Indian Watch Market

Evolution
Trends
Price segmentation

Consumer Behaviour
Major Players
HMT Watches Ltd.
Titan Industries Ltd.
Timex Watches Ltd.

Industry Analysis

Positioning
Advertising
Distribution
Branding

Future Trends

23

The Watch Industry Evolution

Conventional watches standard spring powered
watch
Conventional watch evolved into electronic watch
Varieties:
Jewelled lever watches (complex and expensive)
Pin lever watches (recent development)

New generation watches evolved from electric watch

to Tuning Fork watch and ultimately settle at Quartz
Crystal electronic watch
Major players Switzerland, Japan and United States
60% Quartz, 27% Digital, 13% Mechanical
Source : Segmentation of the Indian Watch Market Y.L.R.
Moorthi, IIMB

24

The Watch Industry Global

Perspective
Swiss Watch Industry

Specialization in component manufacturing and watch assembling

Competitive advantage mechanical watches
Undisputed leaders till 70s (42% volume share and 78% value share)
First electronic watch invented by Max Hetzel, a Swiss Engineer in
1954

Japanese Watch Industry

Took advantage of the quartz and digital technology
Carved out a strong position in the world watch industry
Competitive Advantage:
Brand image based on quartz technology and accuracy
Mass production which led to lower prices

25

The Watch Industry

Global Perspective (Contd.)
US Watch Industry
Had some presence till 1970
Post 1970, some chip manufacturers entered as suppliers of components
By 1980s most of them disappeared due to fierce competition from
Japan and Hong Kong
Major player is Timex

Hong Kong Watch Industry

Entered the world watch scene in 1976
Assembly type production
Japan biggest supplier of movements
Competitive Advantage:
Cheap Labour
Low Prices

26

Indian Watch Industry Evolution

1960: Indian Watch Industry came into being. Govt. took the decision
to set up the countrys first watch factory
1961: HMT set up Indias first watch factory at Bangalore in
collaboration with Citizen of Japan
1981: Hyderabad Allwyn Limited entered the watch industry in
collaboration with Seiko of Japan
1984: The beginning of a new era - entry of Titan, the Tata TIDCO
joint sector company
1990: Timex enters the Indian market in partnership with Titan,
targeting the lower price segment
1997: Timex breaks away from Titan - increasing the already fierce
competition

27

Indian Watch Industry Evolution

(Contd.)
Government Policies
Reserved the manufacture of straps and dials to the small
scale industry
Imposed restrictions on import & manufacture of ECBs

Results
Until the mid 1980s the industry was predominantly
producing mechanical watches.
Total demand for watches greater than supply the gap in
demand being met by smuggled watches unorganized
sector

28

Indian Watch Industry Trends

Rapid increase in target audience
Rise of consumerism and purchasing power
of the middle class
Bulk of the demand exists in lower and
middle segments
Newer segments jewellery segment, etc.
Rise of demand of trendy watches

29

Indian Watch Industry Price

Segmentation
Segment

Average Price

Margin
(estimated)

Mass Market

Rs 450

11%

Popular

Rs 750

15%

Premium

Rs 1200

18%

SuperPremium

Rs 3000

22%

Source : Segmentation of the Indian Watch Market Y.L.R. Moorthi, IIMB

30

Consumer Behaviour
Transition from mere time keeping device with functional
benefits like durability, toughness and economy to a
personal wear reflecting peoples lifestyle and aspirations
Multiple ownership

Price sensitive
Durability and utility are important aspects
Aesthetic appeal and trendy designs are very important
Brand Name continues to be an important driver in the
customers mind
Availability in different segments and for different
occasions makes the watch a suitable gift item

31

Major Players

HMT Watches Ltd. (34%)

Titan Industries Ltd. (39%)

Timex Watches Ltd. (23%)

32

HMT Ltd.
HMT Limited was established in 1953 in technical
collaboration with M/s. Oerlikon of Switzerland
Product range includes Machine Tools, Watches,
Tractors, Printing Machines among others
HMT started manufacturing Wrist Watches since 1962
Technical collaboration with Citizen, Japan
4 integrated manufacturing units
More than 7 million high quality watches/watch
movements per annum
Mechanical and Quartz watches
HMT Watch manufacturing units ISO-9001 certified
Source: http://www.indiainfoline.com

33

HMT Ltd. - Brands

Mechanical Watches Environment friendly

Automatic
Hand wound: Ladies, Gents
Shakti: Ladies, Gents

Quartz Analog Watches

Roman
Alarm Watches
EL Night Watches
Multi Dial Watches
Dater Watches
Plain Watches

Elegance
Gold Line
Bracelet
Slim Line

34

Tennmax
Utsav
Utsav Gem
Lalit: Ladies, Gents, Pairs
Sangam
Swarna: Ladies, Gents

Special Watches

Freedom
Braille
Nurse Watches
Fragrance Watch

HMT Ltd. Strategies

Targeted the global market
State-of-the-art technologies IT Infrastructure
Collaboration with ISA Quartz, France and
Fraporlux, France apart from Citizen, Japan

35

HMT Ltd. Positioning

Positioning based on age, sex, competition
Teenagers
Pace

Older customers
Astra

The male segment

Roman

First watch company to launch watches for children

Zap

Utsav to compete with Titan Raga

Bracelets, Jewellery and Bangles

36

HMT Ltd. Distribution

Manufacturer Dealer Retailer Customer
Established a strong distributor network of
10,000 distributors and 50,000 retail outlets
1990: Followed Titan in introducing C&F
Agents

37

HMT Ltd. Advertising

Huge early investments
Catchy slogan If you have the inclination, we
have the Time
Portrayed nationalistic instincts
Timekeepers to the Nation

38

Titan Industries Ltd.

Titan Industries Ltd. set up in 1987
Joint venture of the Tata Group and TIDCO
1st factory at Hosur
Manufactured quartz analog electronic watches

Financial and technical collaboration with

Ebauches, France
1988: Estd. a component manufacturing facility
1990: Estd. a case manufacturing plant
1992: Integrated backwards to manufacture step
motors
JV with EDC2
To manufacture electronic circuit blocks

Annually markets over 7 million watches

39

6th largest globally in the category of

manufacturer brands

Titan Industries Ltd. Brands

Insignia

Psi2000, Technology

Contemporary styles for the young

Dash!

40

Exclusive watches for women

Fastrack

The Everyday Watch

Raga

Combines the sturdiness of steel with the richness of gold

Exacta

Elegant corporate wear

Spectra

Magic in gold and unique futuristic material

Classique

Sports & Multi-functional watches

Regalia, Royale

Made with high-grade anti-allergenic steel, scratch-resistant

sapphire crystal and special hard gold plating

For young boys and girls

Bandhan

Watches for him and her

Titan Industries Ltd. Strategies

Early to manufacture watches targeted at US and European
markets
The Insignia Collection
Also makes watches for international labels

Roping in the crme of designers

Pierre Ludwig (Cartier)
Francis Humbertdiz (Omega)

Diversification into jewellery Tanishq

Very wide range of products in terms of looks, function and
price points
Noted for their workmanship and reliability
Reputation of being excellent value for money

The Titan Signet Club

Customer loyalty programme

41

Titan Industries Ltd. Positioning

Market Segmentation
The young and teenagers, who are looking for their first watch
The low ownership segment like women
Middle and upper segments of society
Price range of Rs 500 Rs 5000

International watch at Indian prices

A watch that builds your image
A brand which represents style, status and technology
A Good Looking Watch

First watch company to brand its showrooms

Titania Titan watch boutiques in Bangalore
TimeZone
The World of Titan

42

Titan Industries Ltd. Distribution

Manufacturer Retailer Customer
First to go for exclusive showrooms
Did away with retailers
Wholesellers importance reduced

Set up a chain of service centres, with close proximity to the

marketplace
Innovative planning of showrooms
Watch buying a pleasurable experience

Extensive use of C&F agents to reduce distribution costs

43

Titan Industries Ltd. Advertising

Targeted the typically price sensitive yet discerning Indian
customer
International watch you can pay for in rupees
You dont need to pay in dollars, pounds or dirhams to buy a
Titan watch

Targeted the premium segment of look and fashion conscious

customers
To find watches like these you dont have to go to Europe,
Japan, America or a duty free shop

Promoted the concept of a watch being the ideal gift

Next time your husband wants to buy you a saree, ask for a Titan
watch instead

The rationale behind their ads being constant bombardment if

the Titan brand name
Ads are a blend of sophistication and simplicity

44

Timex Watches Ltd.

1854: Started as the Waterbury Company, in
Connecticut's Naugatuck's Valley (the
Switzerland of America)
1990: Tied up with Titan to launch in India
Broke up with the Tata group in '97
Heart of the watches imported from America
Assembled in Timex factories in Noida
Launched the Indiglo technology
First electroluminescent watch face in 1992

45

Timex Watches Ltd.

Brands

46

Aqura
Indiglo
Basics
Datalink
Timex Sportz
Lextra
Vista
Mariner
Gimmix

Source : Segmentation of the Indian Watch Market Y.L.R. Moorthi, IIMB

Timex Watches Ltd.

Strategies
Delivering quality products at affordable prices
Basic objective: Change the mechanical watch user to
a quartz watch user
Tap the untapped

Transition from plastic to metal

To become market leader

Launched Vista brand in Rs 475 Rs 900 range

To appeal to small town customers

47

Timex Watches Ltd. Positioning

Initial understanding with Titan
Titan keeps out of Plastic High Price Segment
Timex keeps out of Metal Low Price Segment

You don't have to be rich to afford a Timex

Lower price segments
Basics, Lextra, Vista

Youthful and trendy

Aqura

For the discerning Sportsman

Timex Sportz

For the children

Gimmix

Premium segment

48

Technologically superior multifunctional brands like

Datalink, Indiglo

Timex Watches Ltd.Distribution

Initially followed the Titan distribution
channel
Post 97, set up their own showrooms

49

Timex Watches Ltd.Advertising

Featured sports and adventurous personalities
Rock climbing, Rafting etc.

Exclusivity of the watch is presented by celebrity endorsements

President Bush declares his loyalty for Ironman

50

Other Players

Westar

Shivaki

51

Assembled watch
Water proof watch Rs 350
Failed with the launch of lower priced Titan and HMT products

SITCO

Launched in 1996
Southern and Western markets
Fashion accessory
In problem

Maxima

Almost closed down

No Brand Equity
Upper segment cluttered
Lack of distribution strength

Analog and digital watches (branded IQ)

Failed due to lack of sustained promotion and marketing
Now planning to cut prices

Hyderabad Allwyn Ltd.

Launched in 1981
Sourced watch movements from Seiko
Lost out due to Organizational problems (PSUs)

The Road Ahead

More and more focus on new technology and multifunctional utility
Timex are the leaders in this area with watches like
Internet Messenger
Digital Heart Rate Fitness System

Watch consumption in India 20 units/1000 people as

opposed to China 50/1000
Scope for increasing the demand of watches

Top 23 cities: 80% of Watch market

The focus should increase on spreading the market to rural areas

Greater price segmentation, sp. lower end

2 fold advantage: Demand, Market spread

Greater competition from invisible sector and foreign

52 brands

Sources and Bibliography

Product Management in India, 2nd Ed.
Ramanuj Majumdar

Segmentation of the Indian Watch Market

Y.L.R. Moorthi, IIMB
(http://www.fba.nus.edu.sg/qm/journals/acrj/IndiaWatchMa
rket.pdf)

http://www.indiainfoline.com
http://www.titanworld.com
http://www.timex.com

53

Thank you

54