Timex targeting younger consumer segment

A watch is watch is watch, you would say. No, says Timex. It is about style, class, fashion, technology and aesthetics. With the myriad choices available, buying a watch may not be such an overwhelming decision but it certainly adds to a wearer's sense of style. For Timex Group India, this is exactly where the opportunity lies.

From being a loss-making entity with few product offerings, Timex Group India has reinvented itself as an upwardly mobile and trendy watch company having a youthful aura that is guaranteed to please the buyer both with service as well as product lines.

Kapil Kapoor, COO, Timex Group, USA, and Vice-Chairman, Timex Group India, is highly optimistic about the company's growth in India. “We want to take every challenge as an opportunity. We have overcome various difficult situations and are now looking towards the next phase of our growth. The market in India is growing exponentially and we are reworking our strategies to target a younger consumer segment.”

Timex had entered India following a tie-up with the Tata-owned Titan in the early '90s. The partnership came apart in year 2000 and since then the brand has branched out on its own. “Yes, it is true that people still identify us with Tata. However, since then, we have restructured our business completely with a new management team and also fresh product lines,” elaborates Kapoor.

Between 2001 and 2003 the company not only re-engineered its supply chain but also revamped its business model. “It was essential to shake off our past and move ahead into the future. We were referred to the Board for Industrial and Financial Reconstruction (BIFR) and were facing tough days,” recalls Kapoor. But now, “we have wiped out every loss and generate enough cash to run a profitable business,” he adds. For the year ended March 31, 2010, the sales revenue grew to Rs 140 crore, increasing by seven per cent from Rs 131 crore. Profits before taxes grew by 122 per cent to Rs 5.87 crore from Rs 2.64 crore the previous year.

So where exactly does the opportunity lie, one asks. Kapoor and V.D. Wadhwa, the India Managing Director of Timex, an old-timer in the company, are ready with their answers.

“From a consumer's point, the brand has to have aspirational value. This means that from a timekeeping unit it has attained the position of an accessory. Consumers are looking at watches as an extension of their personality and are changing watches sooner than before and this has led to shorter life cycles and newer designs, Kapoor elaborates. Wadhwa endorses this to say that the company has resorted to a leaner supply chain. “Shorter lines are being devised to cater to consumer preference for new designs at shorter intervals. Our own facility helps us to be responsive as per the market needs,” Wadhwa explains, adding that the company's facility in Baddi, Himachal Pradesh, expedites the process.

For Timex, speedy growth will come from expanding its retail footprint. They say in unison that retail is here to stay, and emphasise Timex is looking at double digit growth.

Timex watches are priced between Rs 1,000 and Rs 10,000 and Timex claims it has a market share of 21 per cent of the Rs 1,000-Rs 5,000 price bracket. “We see a lot of growth from our retail business. So far, we have relied on multi-brand outlets and smaller shops to sell our brand. But having our own retail channels helps us in providing the right customer experience,” adds Wadhwa.

While the last five years have seen watches grow at 8-9 per cent, the growth in the Rs 5,000-plus segment for watches has been the fastest, registering a 25 per cent growth a year.

And, Timex has a fairly substantial offering in this segment, including some technology-led watches such as Expedition. Of the 45 million watches a year sold in the country, only 16 million are from the organised sector (Titan has a 65 per cent share of this at around 11 million watches a year), so potential for growth is huge.

Kapoor chips in to add that its own retail channel ‘Time Factory' will help provide the right retail ambience and also display the entire product range. “We are working towards scaling up our retail business with the right brand reach and communications. At present we have 69 Time Factory outlets and we are looking to double it in the next two years.”

Kapoor says the company will be investing about $ 1 million in retail expansion for both company-owned outlets as well as franchised stores. He notes that at least 20 per cent of the revenues come from its own retail channel. Timex watches are also available across most large modern lifestyle departmental stores, such as Shoppers Stop and Central, where it has established a good presence, according to an industry official.This also adds to the brand's retail clout.

The Indian-subsidiary of Timex expects to also launch a clutch of high-end international brands including Versace and Ferragamo in India soon to cater to the top end of the spectrum.

Timex has a marketing and distribution arrangement with the two brands. These watches will be priced between Rs 25,000 and Rs 1 lakh.

In the next couple of years, the watch brand hopes that at least one-third of its business will come from the retail channel. “The right firepower coupled with timely investment and proper communication will ensure that our brand is here to stay,” says Kapoor.

An observer of the watch industry says that while Timex has entrenched itself well in the Indian market, it needs to invest in the brand consistently to maintain momentum in the market.

While after Titan it's the second largest advertiser in the watches industry, he points out that Timex needs to build more on its network. Some quick leadership changes both at the international level and in India too has tended to create some discontinuity, points out this observer – in India, G. Kannan was the Managing Director for a short while after Kapoor, and Wadhwa stepped in as Managing Director.

Harish Bhat, COO, Watches, Titan Industries, points out the watches category will benefit from investments made in the category.

“Apart from Titan and Timex, there are around ten watch brands that are investing in advertising and marketing and that will help the watch category grow faster,” he says. For Timex, it's time may well have come to make further inroads in the Indian market.
Bindu D. Menon
(With reports from Vinay Kamath)

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