Penetrating Indian-Watch Markets

By : Chronos
Akshat Mansinghka

-- Y09UC207

Dantu Neeraj Kumar Reddy -- Y09UC049

Harshvardhan Saini

-- Y09UC235

Katravulapally N R Tejaswi -- Y09UC242

Md.Tauseef

For:

-- Y09UC251

Tag Heuer India

Date of Submission:

30th March 2012.

2
Memo of Transmittal
To

: Tag Heuer India

From :
Akshat Mansinghka

-- Y09UC207

Dantu Neeraj Kumar Reddy -- Y09UC049

Harshvardhan Saini

-- Y09UC235

K.N.R.Tejaswi

-- Y09UC242

Md.Tauseef

-- Y09UC251

Subject : Submission of Report on -- How Tag Heuer may penetrate Indian Watch Markets.
Date : 30th October 2012.
In response to your Marketing Improvements Research assignment, we are submitting the
attached report entitled Penetrating Indian Watch Markets .
The report is presented in six parts : A brief introduction , A short discussion on Indian Time
ware industry's recent report, Major Players our Competitors, Recent trends and challenges
and describing few growth factors, Ways to make impact on the Indian market and finally
Conclusion
Major finding is that people between ages 10 30 years, are inclined in buying the watches.
Though male customers are comparatively high, number of female customers are increasing
rapidly in the recent years. Fashion Watches are more demanded now a days than the special
ones like jewellery watches. These are very important factors that other brands have not yet
noticed.
Keeping these factors in mind, and other factors detailed as in the report, Tag Heuer can
easily penetrate Indian markets and compete with other existing brands.
We look forward to your assessment of our report and would be happy to answer any
questions you may have about our analysis and strategies we suggested.

Contents:
Title Page ----------------------------------------- Pg.1
Memo of Transmittal ---------------------------- Pg.2
Executive Summary ----------------------------- Pg.4
Introduction --------------------------------------- Pg.5
Indian Time wear Industries -------------------- Pg.5
Major Players ------------------------------------- Pg.8
Trends, Challenges and Growth Factors ------- Pg.9
How to make an Impact ------------------------- Pg.9
Conclusion ---------------------------------------- Pg.11

List of Illustrations :

Title

Little description

Page No.

Fig - 1

Pie chart on Buyers of different age groups

Fig - 2

Bar graph comparing market shares of Specialists and Fashion 7

watches sales

Fig - 3

Bar graph comparing No. of Male buyers and Female buyers

Fig - 4

% share of major Time ware companies

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Executive Summary
Version : March 2012
Abstract : This document presents, in executive summary format, the facts and
ways that help Tag Heuer-India to sustain and penetrate the Indian watch
markets.
Key Words : Tag Heuer, watches, Time Wear Industry, Indian Watch Market,
Fashionable watches, Speciality watches.
Summary :
It is a well known fact that India has a huge market potential and also should be noted that it
also has a well established Time wear Industry. It is not a big problem for a premium time
wear manufacturer like TAG Heuer to make an entrance into the domestic market. The
industry has been witnessing a growth of 8-10 per cent from past few years. It is expected to
grow at 12-15 per cent in next few years.
In India, most sales are in the fashion segment and this fine distinction has not yet been used
by marketers. Once this fact is captured by Tag Heuer, the growth rate would be fastened.
The youth population increases every year than the people becoming old. They prefer
Fashionable watches than expensive / specialities watches. So, one more concentration factor
should be on producing Fashionable watches. Over the years Female customers also
increased rapidly, and hence different varieties of watches should also be produces for female
population rather than monotonic varieties watches that are being produces by other brands.

Till now, foreign brands have not been able to make a big impact due to very high prices and
limited customer base. But, there is a huge potential for new companies entering the scenario
if they concentrate on marketing and branding while providing watches at reasonable prices.

5
Introduction:
TAG Heuer, a brand from the Watches and Jewelry division of LVMH, is a Swiss
watchmaker known for its sports watches and chronographs. The brand has presence in many
countries and India has been recognized as the most important market for TAG Heuer to
develop since year 2009. While it is a well known fact that India has a huge market potential,
it should be noted that it also has a well established Time wear Industry. It is not a big
problem for a premium time wear manufacturer like TAG Heuer to make an entrance into the
domestic market. But, a carefully formulated strategy should be adopted in order to withstand
the competition from the established companies and to make a considerable impact on the
market. We study the nature and potential of Indian market by analyzing data collected in
numerous surveys and market histories and try to answer some important questions about
penetrating Indian markets.

Indian Time wear Industry:

As per the report - Indian Time Wear Industry 2010 - published by All India
Federation of Horological Industries (AIFHI) and consultancy firm Technopak Advisors, the
size of the Indian time wear industry is estimated at Rs 4,000-4200 Crore. The industry has
been witnessing a growth of 8-10 per cent from past few years. It is expected to grow at 1215 per cent in next few years. Watches are typically segmented into specialist watches and
fashion watches. All International watch brands have a clear position as to where they belong.
In India, most sales are in the fashion segment and this fine distinction has not yet been used
by marketers. The following pie chart shows the percentage shares of buyers in different
demographics.

(Fig - 1)
It is evident that major buyers are the people between the ages 21-30 occupying 32%
of the total buyers. People between the ages 10-20 are next with a share of 26%. People
between the ages 31-40 and 41-50 share 22% and 11% of the total buyers respectively.
People above the age of 50 account to 9 % of the total buyers. As one can see, the majority of
the buyers belong to the youth and are huge buyers looking for up-to-date fashion-wear.
Specialist watches were found to have less market than fashion watches which share 57% of
the total watches sold in the year 2010. Over the last five years, there is a steady increase in
the share of fashion-wear (including luxury watches) while a steady decrease was observed in
demand of specialist watches. This is in coherence with our previous observation that major
consumers of time wear products are the youth looking for stylish and luxury fashion-wear.
This change in demand was accompanied by different companies changing their policies and
stepping into new markets establishing themselves as trustworthy brands. Companies like
Titan, Timex, Quartz made considerable changes in their designs to please the fast growing
demographic. New brands like fast-track (Titan) saw a chance to establish themselves as a
quality brand in this field since all the companies were making this transition. The share of
fashion-wear watches is only expected to increase with increase in percentage of youth
population and their growing demand for watches as fashion-wear.

(Fig - 2)
Male buyers are major costumers occupying 65% of the total buyers leaving 35%
women. The following bar graph shows the shares of male and female buyers.

( Fig 3 )

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While both male and female buyers have increased in number, female buyers have more
percentage of growth and have especially grown rapidly in the past two years. Women only
had a share in fashion-wear watches and negligible share in specialist watch market. What we
can infer from the information above is that there is going to be a huge growth in demand of
fashion-wear watches in the next few years. With the onset of globalization and liberalization
India is on its way to rapid progression. The current scenario seems to be favouring the
Indian economy by leaps and bounds. India is an inviting market for top watch brand
manufacturers because of its young population, rising disposable incomes of the Indian
consumers and the changing perception of the common Indian about his/ her looks. With
most of the well established companies changing their product development policy rather
slowly and with little competition from newly established time-wear companies, this will be
the right time for a company like TAG Heuer to make an entrance into Indian markets.

Major players:
Economy and mass segments form close to 80 per cent of the market by volume and
contribute only 40 per cent of the market by value. Whereas affordable luxury and luxury
segments are estimated to contribute around 20 per cent of the market by value. The
organised players in this sector control 40 per cent of the volume of the industry. Around 60
percent of the market by value is controlled by organised players.

( Fig 4 )

Titan shares the major part of the industry with 65% of the total sales market.
Sonata and Fast-track follow with 24% and 20% of the market. While Maxima shares 9% of
the total market, other brands including foreign companies have only 8% of the total market.
Till now, foreign brands have not been able to make a big impact due to very high prices and
limited customer base. But, there is a huge potential for new companies entering the scenario
if they concentrate on marketing and branding while providing watches at reasonable prices.
Since penetration is still low and the unorganized sector big, this industry has a lot of scope to
grow both in value and volume. The jury is still out though whether the Indian companies
like Titan will lead this growth or the global majors like Seiko, Citizen etc. After all, the
domestic players have hitherto grown because of a retail strategy and the wining global
players are clearly focused on product.

Trends, challenges and growth factors:

Todays luxury watches are made from lightweight materials and are more inclined
towards technological edge than diamond or crystal studded looks. Precious metals such as
titanium, platinum etc. are now being extensively used in such watches and such luxury
watches can display different phases of the moon or provide users with split-second timing of
racing laps with near one hundred percent accuracy. The challenges faced by the industry are
stringent government regulations, slower than anticipated change in the consumer behaviour
and the large unorganised market. The growth factors are changing consumer dynamics,
increase in disposable income, growth of organised retail and entry of international brands.

How to make an impact:

Most of these top watch brands in India are known for their elegant and stylish
collections. The top watch brands in India also offer plethora of choices be it for men ,women
or kids. Ranging from leather bands, to metallic, to chronological dials to stone studded ones
the top watch manufactures in India offer them all. Making an impact in this market is not
easy but Indian markets can be penetrated if a company makes the right choices at the right
time. The growth of Fast-track can be an example of how to establish a customer base and

10

create a new brand. The following points need to be taken into consideration to make
effective decisions so as to establish TAG Heuer as a Time-wear brand in India.
1. The Indians are mainly interested in brand image (77%), and less interested in
styles (less than 10%, whereas that figure is usually around 18%).
2. The influence of the existing international brand ambassadors may not be as strong
on the Indian population as local Indian icons.
3. Marketing and different distribution channels can be used to target the middle
brands, which currently have a low saturation rate among the Indian customers.
4. TAG Heuer is spending less in Media advertising compared with other premium
watch brands in the Indian market.
India now figures among the top five priority markets for the watchmaker worldwide. The
high-end watches segment in India is currently impaired by high import duties. The AIFHI is
striving to bring down import duties for high-value jewellery watches like that of other jewelbased items. The luxury watch sector also faces problems in availability of premium retailing
space. Moreover, the Weights and Measures Act stipulates certain conditions for packaging in
watches, even though they are sold in the open and not in boxes. This unfair Act imposed
upon the watch industry thus leads to higher excise duties. Like the luxury automobiles
segment, high-end watches will also witness an upswing over the next five years. It is
expected that the number of upper-middle class and upper class households in India will
boom and so will the sales of fashion and luxury watches, as have the sales of other lifestyle
accessories. The following are the recommendations are made keeping in mind the above
stated facts in order to make TAG Heuer, a reliable Time-wear brand in India.
1. Launching a Mixed brand product with one of the established companies will help in
branding and also acceptance of the brand by Indian population.
2. Branding should be given more importance by concentrating on Advertising media.
3. The average cost of a watch in India remains under a thousand rupees. So, the average
cost of watches should be close to a thousand rupees with equal stress on luxury
fashion-wear and specialist watches, keeping some of the models at affordable prices
to the middle-class and higher middle-class.
4. Brand ambassadors for Indian market should be chosen with great care keeping all
demographics in mind.

11

5. Special brands for women are to be launched to tap into rapidly increasing female
buyers.
6. Set-up local manufacturing units to avoid government imposed taxes for imports
which influence the prices of normal foreign brands.
7. New models for fast changing trends should be introduced from time to time in order
to keep the population interested.
India definitely has a market that could be quite ludicrous if tapped into through the right
channels. The growing economy and rising economic status of Indian population has resulted
in their growing interest in fashion-wear especially watches. In spite of the growing cell
phone industry, watch sales have only grown up in the last few years as shown earlier. So,
establishing a new brand is not too difficult if an appropriate market strategy is followed. The
target of India contributing 20% to the companys total turnover in three years is achievable.

Conclusion:
In this report, we have successfully analyzed the present watch market in India. We
have identified the potential customer base. We also studied the present trends, challenges
and growth factors that affect the Time-wear industry in India. We discussed different
strategies to make an impact and establish TAG Heuer as a top watch making brand of the
country.