Managing director of TITAN company limited Bhaskar Bhat. Photo Srikanta Sharma R.
The name 'Titan' has always been synonymous with watches. Be it Sonata, Titan or Fastrack brands, India's middle-class loyal customers have been associated with the brand for over three decades now.
What started off as a watch company in 1984 with a joint venture between the Tata Group and the Tamil Nadu Industrial Development Corporation (TIDCO), the Titan Company has explored beyond watches and jewellery brand 'Tanishq', and is trying to carve a niche for itself in eyewear, accessories, and sarees brands.
Headquartered in Bengaluru, the company enjoys 65% market share in the organised sector of the watch category, clearly indicating its leadership position. It is the world's fifth largest watchmaker today.
"If you take the total market, our volume is 25%, and 40% by value," says Bhaskar Bhat, Managing Director of the Titan Company. Bhat, who was recently appointed as Director on the Tata Sons Board, says that the company has been growing very well and expects to grow by at least 15% in FY19.
Titan, which is known for its exclusive designs, recently introduced 'We', its third line of smart offerings. Specially designed for the woman of today, 'We' has a range of smart features such as phone finder, fitness, thinking about you, safety alarm and network.
"A couple of months ago, we entered into a partnership with Amazon to sell our watches in the US market. It's early days, but what we get to know is that non-Indians are buying the Raga watch. Almost 65% of watches we sell are bought by non-Indians," says Bhat, stressing on the huge opportunity and market for watches.
Titan is clear that its smart watches will be Analog and not digital. "We will have Analog smart watches." In the last one year, Titan has introduced smart watches under the brands Juxt, Juxt Pro, Sonata Act and Raga We.
The company's total income reached
Rs 12,717 crore in FY17, compared with
Rs 11,105 crore in FY16, a 14.5% growth. In the last financial year, the company's income from watches was Rs 2,028, crore and jewellery at Rs 10,237 crore, and its net profit witnessed a 9% jump at Rs 762 crore.
It's not just watches that contribute to the company's revenues, for years now, its jewellery division 'Tanishq' is doing extremely well. Titan, mainly with the performance of its jewellery division, maintained its performance run rate in Q1 this fiscal, by achieving 42% growth in revenue and 43% growth in profit before tax. All retail formats of the company recorded good overall and same store growth. With 55% retail growth and 51% same store growth, Q1 FY 18 recorded a great sales performance by the jewellery division.
The introduction of the Goods and Services Tax (GST) has helped many organised players like Titan.
"GST introduction from July 1 went against good performance in the second quarter. A lot of sales bunched up in the last week of June, which witnessed a very huge sale. We played our cards well and we never relaxed in the last 18 months both on cost and new product innovation. GST and demonetisation have led to migration from the unorganised to the organised sector," says Bhat.
According to its annual report, while Tanishq is the overall market leader, its share in certain segments and cities is much lower than where it could and should be. Thus, the company's thrust in the next few years is on capitalising on the following opportunities: The wedding segment - this segment accounts for nearly 60% of the jewellery market and Tanishq's presence in this is small; High value diamond jewellery, low market share cities, and Middle India.
Looking beyond India
While Titan is exporting watches, the company is now planning to enter the West Asia market through its jewellery brand Tanishq. It has plans to enter through partnership and looking at opening stores in malls there. "We have not introduced any product, but are evaluating various options. It could be through a partner. The Indian diaspora loves Indian jewellery, and it will be sold as Tanishq," Bhat says. Apart from jewellery and watches, Titan is doing well in eyewear, and of late, it's pinning hope on the fragrance market and also Indian ethnic-wear by introducing branded sarees through 'Taneira'.
Titan Eyeplus, the eyewear business of the Titan Company, is the third major venture of consumer business by the company. Launched in March 2007, the company is optimistic about the future of its eyewear business.
It will soon start rolling out frames from its manufacturing facility in Chikkaballapur. "We have 483 stores across the country, and we want to double our footprint in 3-4 years. In this fiscal alone, we have planned 50-60 stores," Titan's eyewear unit CEO Ronnie Talati says. It has opened 37 new stores in the first six months of FY17-18 alone.
Titan is now focusing on aggressive growth of its eyewear business. Along with eyewear, it is also focusing on the fragrance market. Titan launched fragrances under the 'Skinn' brand in 2013.
Skinn fragrances have been developed and designed to cater to the Indian audience by the finest in the world of perfumery - Nadege Le Garlantezec, Olivier Pescheux, Michel Girard, Fabrice Pellegrin, Harry Fremont, Alberto Morillas and Nathalie Lorson.
Its branded perfumes are priced at an attractive price-point, and it is the unique selling point of the offering.
"Skinn can become much bigger," Bhat adds. Titan is planning to launch body mist shortly under the Skinn brand.
Indian ethnic-wear is the new space that Titan has identified, and it is also seeing huge opportunities and growth in this space. The space is being explored through its Taneira brand, which sells hand-woven sarees. Titan hopes that this category could turn as its fourth lifestyle vertical in the future.
Also, the company is exploring silk sarees. "We have two stores in Bengaluru and the initial consumer response is quite good. We are also looking at taking our saree brand beyond Bengaluru. We are looking at Delhi, Mumbai, Hyderabad and Chennai markets. Our next Taneira store will be in Delhi," Bhat says, adding, "We are profitable in the first year itself".
Online sees huge potential
Bhat says that online sales is going to increase in watches from 2% to 10%, and online is the fastest growing channel. Last year, Titan acquired 62% stake in Chennai-based online jewellery retailer CaratLane. "Five years from now, jewellery will double and watches will grow at between 10% and 15%. The total size of the company will be Rs 30,000 crore to Rs 50,000 crore, depending on how the market responds to the GST era," Bhat says, adding that the jewellery business alone will grow to Rs 25,000 crore in the next five years.
He is confident that the Titan Company would grow at a consistent 10%. "This percentage is guaranteed. There is a huge aspiring population - the middle-class - they want new products, brands and our understanding of the Indian consumer is what gives us a competitive advantage. We are confident that we understand Indian consumers better than anyone else," says Bhat, sitting at his new office in Electronic City, Bengaluru.
With over 7,400 employees and a market capitalisation of over Rs 75,995 crore, the Titan Company is confident of retaining its leadership position across categories in the coming days.