Some time last year, a query was posted on Quora: “Is it legal for Titan watches to adapt part of Mozart’s 25th Symphony for its advertisement tune?” Over the last three decades for most Indians, the rousing tune has been synonymous with Titan rather than as the work of Salzburg’s finest musician. In a 2007 article in the business daily Mint, the former vice-chairman and managing director of Titan, Xerxes Desai, said the score was chosen because “it was young and full of zest, yet classy and elegant. It fit well with the character of the brand we were seeking to create”.
The brand Desai and his team nurtured in the mid-1980s and through the 1990s became an Indian cultural icon. Along with a handful of other labels, it symbolised post-liberalisation India’s transition from an inward-looking country to one connected to the world. While the brand may not have taught us how to turn up on time, it was a harbinger of modernity and upward mobility.
‘Was’ being the operative word. Things have changed at the company over the last 15-odd years. Titan the watch brand has, for many years, not been the jewel in the crown of Bengaluru-based Titan Industries, part of the Tata Group. The name Titan might still stir up images of dials and straps for a certain generation, but for the company, watches represent one of the many divisions, and not the most successful either.
Desai’s successors, leveraging the knowledge, insights, branding, marketing, and distribution muscle that helped power the Titan story, created several businesses, and none has been as transformative as the jewellery business, Tanishq.
The balance sheet of the company is illustrative of the shift. For all its cultural cachet and heft, Titan—the watch brand—is now merely a quarter of the size of the jewellery business by revenue. The jewellery division accounts for nearly three quarters of the overall revenues. With the eyewear division growing, the share of the watch division will probably come down further. As of the second quarter of FY17, the company’s watch sales declined by 5.2%.
Bhaskar Bhat wants to change that. For the past few years, Titan’s 62-year-old managing director has been trying to re-energise the watch business and a long-term revival strategy has been rolled out. Executives claim that it will probably take a couple of years more for the results to reflect on the balance sheet, but it nonetheless is a reimagining of the business the made Titan.
A watch, particularly an expensive one, is a statement—an extension of personality. However, Titan was built on the feel-good of gifting rather than on individuality and personality. With the rise of gifting options for men, that segment isn’t what it used to be. As S. Ravi Kant, who heads Titan’s watch business, points out, “55% of sales used to come from gifting till a few years ago. That has dropped to 38%.”
Several retailers and watch connoisseurs that Fortune India talked to say that while the category was undergoing changes, Titan took its eye off the watch business as it was no longer fuelling growth.
“In terms of product and design, their capabilities have gone down significantly. If you go to the Titan office, there is no romance around the watch. It has become a marketing company and not a watch company,” says a prominent Mumbai-based retailer who asked not to be identified because he still does business with the company.
The marketing engine that built Titan was busy nurturing newer brands such as Tanishq and Fastrack. Also, the advent of mobile phones meant watches were no longer a necessity.
The idea of time itself has changed. The rigid demarcation of office hours, for example, has given way to flexible work-from-home schedules. “The concept of time has become increasingly fluid,” says social commentator and CEO Future Brands, Santosh Desai.
Titan’s answer began with a more nuanced segmenting of the market. Over the last few years, this has resulted in Titan trying to leverage its skills in building brands and creating newer brands for each of the segments it has identified.
Titan now has three core brands—Titan, Fastrack (aimed at youngsters), and Sonata (the mass brand)—and a swarm of sub-brands, including Juxt, for the technology aware ‘smart’ crowd; Xylys, for those who pine for a light-on-the-wallet-made-in-Switzerland tag; Raga, for women; Nebula, to ride on Indians’ fascination for gold; and Zoop, for kids.
‘Premiumisation’ is a word often heard around Titan’s headquarters when it comes to its transformation philosophy. The watch brand is trying to reinvent itself as one that bridges mass and luxury. Bhat wants it to climb higher in the aspirational chain, and reflect what some in the company call “the re-calibrated ambitions of Indians”.
In plain English what it means is that while many Indians who wear watches may not be able to afford the international names, they have the money and the inclination to spend a bit more on an accessory than they earlier used to. This has resulted in brand Titan exiting the sub-Rs 2,000 category, leaving it all to Sonata.
Bhat says that it is strategically important to go up the pricing ladder even if it hurts in the short term. “When you are below a certain price point, your ability to deliver high value through design diminishes. Our growth at the higher end is more than that at the lower end, although the mass at the lower end is high. Exiting (lower price points) will disappoint a lot of people, but it will also bring back people.”
Last year there was a 28% growth in sales for watches priced above Rs 10,000 as compared to the year before, unlike the rest of the category. The people he hopes to bring back are the ones who moved away as Titan straddled both the mass category and the lower-premium end.
The results of the segmentation have been a mixed bag thus far. “Raga has done well, but Juxt and Xylys failed to create the excitement they were supposed to,” says a Delhi-based watch retailer who asked not to be named as he does business with Titan.
Juxt, intended for the technologically savvy, hasn’t managed to draw consumers whose interest in watches was rekindled by the recent wave of smartwatches. Sean O’Kane of The Verge, a technology website, reviewing the watch, said,
“Juxt is another smart analog watch
with a dumb name”.
That review reflects what Titan is up against in that segment: the difficulty in balancing the watch and technology. While the ‘smart watch’, as a segment, has still not been fully cracked by any company, it is clear that half-baked efforts like Juxt cut no ice when stacked against the likes of the Apple Watch.
According to Bhat, Titan has taken the view that it should primarily be a watch with some smartness thrown in, rather than a smart device that happens to be worn on the wrist. His contention is that Titan has played to its strengths as a watchmaker. “We did a lot of research before we entered the smart segment. Consumers have been saying that most of these watches are like a device as opposed to a good-looking watch. You can’t keep a smartwatch dial on because the battery would drain in four hours. It is like black square on the wrist. We created a certain product for a certain kind of a consumer,” says Bhat.
Unfortunately, it looks like such consumers make up only a sliver of the market. Kant admits that the last Titan product to really set the pulse racing as a technology showcase was the Titan Edge—billed as the slimmest watch in the universe.
That was way back in 2002, bringing back the question whether Titan is investing enough in technology. This is important because smartwatches are likely to eat into market share. According to The Wall Street Journal, analysts estimate that the Apple Watch, not exactly viewed as a success, sold about 12 million in the first year. “At an average price of $500, that is a $6 billion business for Apple,” the report says.
The brand that will be at the very top of the pile and a centrepiece for the revival of the watch division for Titan would be Favre-Leuba, a historic (founded in 1737), once-venerable Swiss brand with an hourglass as its logo. In late 2011, Titan bought the brand, then almost defunct, for a couple of million euros and has since been working on reviving it. It was one of the few Swiss-made options available in India in the fifties and sixties and there are shadows of that legacy remaining in the country even to this day. A quick look on eBay shows that most of the decades-old Favre-Leuba watches listed for sale are from India.
Titan, however, wants Favre-Leuba to target the global market and is downplaying the India connect to make sure that the Swiss heritage is emphasised.
“For our existing brands, India is the main market,” says Kant. “Favre-Leuba has not been conceived for the Indian market. We are targeting [the world’s foremost watch trade show] Baselworld 2017 [for the relaunch]. The team is entirely Swiss and German, except for one young Indian marketing manager.”
That is a brave decision for a company that has marketing and distribution muscle in India but is not exactly a global player. It sells watches only in 25 countries, mostly a short flight away
Reviving a defunct brand is never easy, even one with the heritage of Favre-Leuba. Watch brands, particularly those higher up in the chain, are created by carefully nurturing their stories over many years, sometimes decades. There are watch brands that haven’t even changed their brand ambassadors for decades. Omega has had Cindy Crawford as the face of their Constellation range for over 20 years now. That requires supreme marketing chops and the commitment to spend big.
Titan, if it is determined about making a play in the higher end of the premium watch market, will have to make a serious show of its commitment and ambition. According to watch experts, it will have to recast and retell the Favre-Leuba story, hire a top-notch global brand ambassador and be present consistently over many years at major trade shows such as Baselworld.
Titan has been staying away from Basel for many years as it didn’t have much of a presence outside a handful of Asian countries. Favre-Leuba will force a major rethink on this approach.
All of this is assuming Titan gets the product right—perfecting the design
itself with the right movements (mechanisms that make watches tick) is intrinsic to the lure of a watch brand. Precision in movements is seen as an exact science and a sign of watchmaking prowess. Titan can’t afford to get this wrong, and has to either develop its own movements—an unlikely scenario—or buy them from other companies.
Kant is certainly mindful of the task at hand and the need for enhanced investment. “We have to make investments across the chain. We have invested in a stainless steel case plant in Coimbatore. Large overseas brands are interested in sourcing from it. We have to make investments
in the back end and in people, and look for alliances. The tie-up with HP [to make smart watches] involves investments.”
Titan is India’s largest specialty retailer, with around 8,000 dealers and 780 service centres. As Kant says, “No other brand can match that. This is our core strength.” It certainly remains a formidable organisation. As part of its revival strategy, Titan has slightly changed tack in retail, increasing its presence in multibrand retail outlets—the likes of Shoppers Stop—to cater to consumers who like shopping in
an environment that allows them to explore brands.
That thinking extends to online channels as well. “Earlier we used to open exclusive outlets at a rapid pace. We are slowing down on that. If we were opening 50 [outlets] two years ago, we are opening 25 now. That shift is [because of] other formats emerging—the large-format stores and e-commerce [where] consumers are going,” Kant says.
Bhat, Kant, and the team at Titan talk about 2018 as the year when all the course corrections will start paying off. That is still a while away and there may still be a need for further nuancing of the strategy to make it stick.
I don’t wear a watch and haven’t owned one for many years. In fact, for the better part of a decade and half, I don’t remember reaching out to wear a watch while heading out. Look around you. Folks like me, of which there are plenty, are the biggest challenge for Titan. How will it convert people like me?
Reporting for this story has rekindled my interest in watches and I have been giving serious thought to buying one. The mechanical artistry and the romantic, even surreal, idea of distilling time into something that I can wear on my wrist has made me look at watch showrooms and brands with a little more curiosity than before. The challenge for Titan will be to make the right moves to snag people like me.
For those wondering if it is legal to use Mozart’s creation, it is. Perfectly so.