Indian Watch Industry Touches $1 billion mark - Billion dollar baby!

As Smartbuy goes past its third birthday, it sets many records. Smartbuy has been the first and only non-watch industry magazine to have run a regular column on Horology and has also been witness to some tumultuous transformation in the watch industry in India during the last three years. It is a revelation of sorts that at retail prices, the watch industry grew some thirty per cent a year; almost touching a billion dollars during the last financial year.

The industry also witnessed tremendous modernisation in retail infrastructure. Upmarket malls such as Emporio Mall - New Delhi, Palladium - Mumbai, Bengaluru's UB City and Chennai's Express Avenue have given away a disproportionate share of floor space to watches. Also, the look and feel of the stores and the fitout standards are no different compared to retail decor that we have witnessed in the developed world. Most important of all has been the proliferation of the number of global brands now available in India. Indians can now buy a designer's brand such as Espirit or Guess in the neighbourhood store. They don't have to go to Mustafa in Singapore to buy a Tissot. Titan has now populated the country with some three hundred ‘World of Titan' stores. Not to be left behind, the second independent brand from the Titan stable ‘Fastrack' is now aspiring to have its first fifty stores built and stocked for young people. And the story of ‘Helios' has just begun!

Swiss Invasion

The 2011 edition of Baselworld, a massive watch industry fair held during the second half of March every year, was celebrating the V-shape recovery of the Swiss watch industry last year. After taking a nose dive of 22 per cent during 2009, the industry almost fully recovered its volume sales as well as revenue. There were of course several bits of good news for the Swiss watch industry. Export to China for the first time crossed one billion dollars. Exports to Hong Kong – the world's largest trading centre for watches and watch components - crossed three billion dollars. It can safely be assumed that China may have received another billion dollars worth of watches through Hong Kong, making China the single largest user of Swiss watches – surpassing countries like the US, and Germany and the rest of the world.

So where does India stand in all this? Well, way behind China, but India grew at an unbelievable 35 per cent compared to the previous year; even beating the Chinese growth rate. This is a small market, and yet is the fastest growing market in the World for Swiss watches! So how large was the Indian market during 2010?

At CIF prices, Swiss exports of watches to India during 2010 was at $130 million. At retail prices, this would translate to a whopping $300 million! Then there have been the Big Three brands outside Switzerland which also have been very active in India – namely Citizen, Timex and Seiko (probably in that order). We estimate that these three brands would have recorded revenues from sales of about $50 million at street prices.

In addition, there has been the invasion of the middle to low-end fashion brands – Hugo Boss, Tommy, Espirit, Guess, Armani and countless others. These brands may have added another $50 million in revenues. It is therefore a fair estimate that Indians bought an unbelievable $400 million or Rs 2,000 crore worth of imported watches! Consider this figure in the light of the total being less than Rs 500 crore just three years ago.

Tissot, which is now available in over one hundred stores in India, has emerged as the largest selling Swiss brand. It is estimated that Tissot's volume sales during 2010 in India crossed 50,000 watches with average retail price recovery of Rs 15,000 per watch. In volume terms, Tag Heuer and Raymond Weil also became very popular.

Not to be left behind, were watches in higher price bands namely Longines and the ever popular Omega. India also witnessed the launch of virtually all top-end brands retailed through select outlets. We saw brands like Breguet, Blancpain, Rolex, Jaeger Le-Coultre, IWC, Ulysse Nardin and Zenith. Retail prices were competitive; albeit some interesting discounts to MRP to match Dubai or Singapore prices. It is possible that the rapid upward swing in Swiss watch sales in India may have been contributed to by Indians learning to buy their watches in India! So what made this transition possible?

Retail Infrastructure

Ethos Boutique set up by watch veteran Yasho Saboo with some 25 multi-brand stores became the largest retail chain for Swiss watches in India. Many erstwhile single-outlet multi-brand stores such as Helvetica, Zimsons, Kapoors and P. Orr and Sons have all become multi-store chains. Many of them have opted to open franchise stores on behalf of individual brands. For the first time during the last three years fashion brands retailing for less than Rs 10,000 entered the realms of department stores with Shoppers Stop and Central leading the way.

Multi-brand retail watch stores appearing in domestic airports and doing brisk business is also quite a change for India. In all, some 150 stores are now retailing multi brand watches above Rs 10,000 and maybe some 50 stores that are retailing brands above Rs 50,000.

While it may appear that India's watch retail market is fast maturing; the best is just about arriving. Indira Nagar's 100 feet road in Bangalore just added a brand new 3,000 sqft Helios watch store with a 100 ft frontage. The store carries 28 global brands and intends to add more. This was only the fifth ‘Helios' multi brand store in India.

The decor is world class, the ambiance plush but non-intrusive, and the sales staff courteous and well-trained. Five stores may not speak a great lot about industry giant Titan's true intent about multi-brand retailing.

On the other hand though, at three hundred by last count, ‘World of Titan' stores is set to make Titan one of the world's largest watch retailers. Helios is slated to become a 40-store chain by end of the financial year and probably add another 60 over the next 12 to 24 months. In the words of Ajoy Chawla, Vice President, Global Marketing, Titan, "We will stop nothing short of becoming leaders in multi-brand watch retailing in India."

At 25 per cent growth per annum, India is all set to become a $2 billion market over the next three years. It will be wonderful to see India's watch retail industry maturing to world-class standards and offering real joy to Indian consumers!

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