The Hindu Business Line : Dior's designs

FROM making its latest international launches available in India to offering zero per cent finance schemes to make the category more affordable for the Indian youth, Swiss watch company LVMH Watches and Jewellery (makers of Tag Heuer and Christian Dior watches), is going all out to reach its niche target market.

The company's focus is clearly on popularising the segment, while it is fully aware that profits or even breaking even are distant thoughts. "We believe that the Indian market has tremendous potential; therefore, from day one of operations in this country our effort has been to popularise the segment. We are not expecting to make profits for at least the next four-five years," says Ravi Thakran, Managing Director (Asia-Pacific), LVMH Watches.

He says that the biggest challenge in India is to convince consumers to buy luxury watches in India. The Indian consumers, says Thakran, have the capability and desire to shell out money to possess a Tag Heuer or a Christian Dior but they prefer to buy it in Europe or Singapore or Dubai, as they feel that it is cheaper abroad. Moreover, most of them feel that the latest launches take a while to come to India. After-sales service is also a major concern.

"We therefore entered the Indian market with a promise that we would ensure that our new collections are launched in India simultaneously, at a price which would be equal to or even lesser than world prices. At the same time we also promised to recreate the international shopping experience in India," says Thakran.

The company has lived up to its promise of bringing in all its latest launches simultaneously to the Indian market, the latest being Christian Dior's international Spring 2004 range, Girly Dior. With prices between Rs 30,500 and Rs 44,000, which Thakran claims are on par with the international prices.

He says that offering international pricing in the Indian market is a tough promise to live up to as the customs duties on foreign watches in India is a whopping 65 per cent, which is the highest in the world.

Marketing strategy

Apart from making sure that all its latest worldwide launches are available in India simultaneously and at international prices, LVMH Watches and Jewellery is also into a lot of promotion such as organising photo-shoots with lifestyle magazines such as Cosmopolitan and Femina.

The company has also signed up Indian celebrities such as Shah Rukh Khan to endorse the Tag Heuer brand, while Christian Dior is being endorsed by model Yana Gupta.

One of its most recent initiatives to increase the penetration of its watches in the Indian market was the launch of a zero per cent interest finance scheme for the Tag Heuer brand. Though the initial response to the scheme has been lukewarm, Thakran is confident it will pick up in due course. "This scheme is especially meant for youth who can now aspire to possess a brand like Tag Heuer through easy instalments," he says. The company also plans to extend this scheme for the Christian Dior brand, for which it is negotiating with several banks.

Retail strategy

On the retail front, the company's strategy has been to associate itself only with upmarket multibrand stores in order to maintain the exclusivity of its products. In Chennai, for instance, the company is associated with Helvetica, which only retails high-end luxury watch brands.

"At the same time we have also invested a lot in training the staff at the counters so that the shoppers can get an international shopping experience," says Thakran. "Each of our shop-in-shops also offer full-fledged after-sales service," he adds.

The luxury watch market

The luxury watch market in India, according to Thakran, is estimated at Rs 400 crore and is growing at an impressive 20 per cent per year. Referring to the sales of Christian Dior watches, Thakran says that the company has already sold 2,000 watches in the last one year and hopes to sell 10,000 watches per year by 2006.

Ashok Doshi, owner of the Chennai-based multibrand watch retail store Helvetica, says the luxury watch segment is growing. "The Indian consumer over the last one year has been showing interest in possessing premium international brands and therefore enquiries about these watches have also increased."

He says that while sports brands such as Tag Heuer are a rage among the youngsters between the age group of 25 and 35, the 35-plus consumers generally opt for classical watches such as Omega and Cartier.

And LVMH's goal is to boost the luxury watch category through various marketing and promotional exercises. The company is also going to shortly launch two more new watches from its international portfolio — Fendi and Zenith — to give the Indian consumers further choice in the luxury watch segment.

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