Wrist Watches form an integral part of the personality of individuals in the present era. Earlier seen as a luxury item, they are now witnessing a fundamental change in perception, and are now gaining respect as an essential utility item. For the watch industry, time seems in its favour what with the liberalization of the Indian market coupled with the rising purchasing power of the young and consumerist Indians.
Indian watches market was for long dominated by public sector organisations like Hindustan Machine Tools Ltd. (HMT) and Allwyn (also famous for its refrigerators once upon a time!), and has now left the pioneers far behind or nowhere in market by private sector enterprises like Titan, Sonata, Ajanta and Timex along with foreign entities jostling for display space in the smallest of shops selling these products.
Before the establishment of HMT as the dominant player in the Indian markets initially, the country was solely dependent on imports to meet the internal demand. However, establishment of HMT as the leading player in the wrist watch segment in the 1960’s, changed the scenario.
In post liberalization India, the market stood to witness intensive competition between foreign and Indian manufacturers like Timex, Titan, Movado, Longines, Rado, Rolex, Fréderique Constant, Mont Blanc, Swatch, and many others. Many watch makers have made significant inroads in the industry and others are in the process of establishing themselves, currently.
Besides this, buyers are extremely choosy about the brand and type of wrist watches they wear. Being extremely brand conscious, their tastes have evolved over the years and have gone beyond the realms of durability to choose in terms of aesthetics and elegance. Thus it is a buyers market with multitude of designs that have entered and flooded the market place.
The size of the watch market currently is estimated to be around 40 to 45 million pieces annually. The organized sector alone contributes up to 30 percent of this figure, and the rest of the demand is being met by the unorganised grey sector. This data is significant indeed in view of the socio economic distribution of the Indian populace. More than 58 percent of the population is under twenty five and more than 80 percent of the population is below 45 years of age.
In dollar terms, the estimated annual market size is around USD 195 million, despite the fact that the penetration of watches is the lowest, compared globally. Looking into this fact and the long standing Indian tradition of comparing watches with jewellery and other traditional items, many watch companies are interested in setting up base in India. The average growth in the size of the market is slated to be around 10 -15 percent per year.
A casual study of the watch market reveals that it is segmented on basis of multiple proportions such as price, benefits and types of watches. The price of the watches is a major motive in the minds of the customer. Accordingly, three segments can be identified here, namely low priced, medium priced, and high priced watches.
The lower priced segment consists of watches priced less than INR 500; the medium price range consists of watches in the INR 500-1500 range and the high priced watches come in the INR 1500 upwards range. There are other higher categories as well such as the premium and luxury range, but they appeal to only a small category of the watch market in India.
According to a recent study, more than 90 percent of the watches were from the lower price ranges with international costs being less than 20 euros. Moreover, around 20 to 25 watches are being sold for every 1000 citizens. Thus there is enormous potential for growth of the industry in this untapped segment. Some customers look out for features like fashion appeal, technology, sophistication and status. Others go for durability, economy and precision.
Many customers prefer mechanical and automatic watches, while others prefer quartz watches. Newer segments are also on rise such as ladies watches, children’s watches and gent’s watches. Customers usually base their preferences and buying decisions on a variety of factors like price, durability, utility, aesthetic appeal and brand name. A combination of all these points ultimately forms the customer’s buying decision that translates into the purchase of a watch.
The retail sector has just begun to boom in India. Since the early 1990’s, Indian customers are relying more on departmental stores and shopping malls to purchase their wants and needs. This has come as a boon for watch manufacturers and dealers, who are now looking forward to utilise these new outlets to reach out to the Indian masses. Watch manufacturers are looking at a suitable mix to market their products ranging from exclusive retail outlets to display sections in malls and large departmental stores.
In the end, though India is still considered to be a difficult market to penetrate, due to reasons like price sensitiveness and its largely unorganised sector. However, with the right planning and the right partners and experienced collaborators, it is expected that both international and domestic watch manufacturers will do well in the Indian markets.