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Even as the mass-market watch brands are experiencing poor sales growth, the premium-to-luxury watch segment is seeing rapid growth, attracting global jewellery and watch players to India.
For instance, Titan's low-end Sonata brand witnessed slow growth in the December 2008 quarter whereas the higher-end Titan and Fastrack brands fared better and also saw the divisions' margins expand.
As a result, earlier this year, Titan launched its first multi-brand showroom Helios in Bangalore. Helios sports 35 brands such as Tommy Hilfiger, Fossil and Esprit, the prices of which range between Rs 5,000 and Rs 75,000. "If this store fares well, we will open 50-75 stores in the next five years," says Ajoy Chawla, vice-president and global business head, Titan.
The watch industry is estimated to be a Rs 2,500 crore (Rs 25 billion) market, growing at 5 per cent per annum. The premium-to-luxury market is close to being a Rs 300-500 crore (Rs 3-5 billion) market and will grow at a compounded annual growth rate of 30-35 per cent to be a Rs 1,500-2,000 crore (Rs 15-20 billion) market in the next six to seven years, according to Chawla.
Other players in the field include the Gitanjali Group, which has a joint venture with the leading Italian watch and jewellery conglomerate Morellato & Sector SpA, whose brands include Sector, Philip Watch, and Roberto Cavalli and the iconic Miss Sixty to name a few. Currently, watches account for 1 per cent of the Gitanjali Group's total turnover.
"By the end of the financial year 2009-10, we expect luxury brands like watches, pens, accessories and jewellery to account for 10 per cent of our revenues," says Mehul Chowksi, managing director, Gitanjali Group, who is in talks with various other luxury watch and accessories companies like the hi-end Italian fashion and jewellery brand Damiani. "Indian consumers are looking at international brands to better gratify themselves," says Guido Damiani, president and CEO, Damiani Group. "We will be in India by the end of the year," he affirms.
Other than expanding along with the Gitanjali Group, Morellato & Sector, which has a presence in the premium luxury destinations like Fifth Avenue (New York), is also planning two flagship stores in India. "By the end of the year, we will have two flagship stores, one each in Delhi and Mumbai," said Massimo Carraro, chief executive officer, Morellato & Sector SpA on a recent visit to India.
The Morellato India JV had previously announced investments of $15-20 million (approximately Rs 750 million to Rs 1 billion) and also plans to manufacture watches in India. "We will start manufacturing the Morellato & Sector watches in India by June 2009 with an initial capacity of 3,000-4,000 watches every month. This will be further expanded to 10,000 watches a month, eventually," said Chowksi.
The JV is also in talks with actors Preity Zinta and Neil Nitin Mukesh (of Johnny Gaddar fame) to be Morellato brand ambassadors. Besides, Morellato will also be seen in the India Fashion Week where Gitanjali is already one of the top sponsors.