Finding good retail space a challenge, says TAG Heuer

TAG Heuer, the Swiss luxury watchmaker, is looking to ramp up its sales in India after years of creating brand awareness. Jean-Christophe Babin, president and chief executive of TAG Heuer, spoke to DNA on growth plans, Tiger Woods sponsorship and how important is Shah Rukh Khan for the watchmaker. Excerpts from the interview:

How do you plan to scale up operations here?
We have many retailing partners in India and now we have the expertise to sell and maintain our products in India. We are already number three behind Omega and Longines and we are looking to grow that. We have strong fundamentals right now, and have developed select retailers in the top 5-6 cities, and set up five boutiques in Delhi, Mumbai, Bangalore and Chennai.

Also, you will see increased communications from us in 2010. We will also push our luxury eye-ware and mobile phones business in boutiques, as they offer more space and expertise. The goal is to have 20 boutiques in the next 3-5 years. The issue is not money but the right location.

You are a sports luxury watchmaker, but we also see many Indian and Hollywood actors as your brand ambassadors... 
We represent sports and glamour, and have been consistent with the strategy of combining people in arts and sports and of picking up the best that have progressed with hard work and eventually became number one. In India, we have Shah Rukh Khan and Formula One driver Karun Chandhok, and they are from movies and sports sectors that completely represent our values.

Is your association with Tiger Woods on?
Yeah it is on, when the affair came out we immediately tried to control the promotions… In the US, people were genuinely shocked, so there we decided to wait for any promotion related activities but not to stop the contract at all, as it would be improper not to take care of people’s sentiments. While in other geographies where the issue was not of much concern, like in China, we are continuing our association with Tiger as before.

In India, we never used much of Tiger as Shah Rukh takes so much of our media buying. In Europe, we will be again using Tiger soon as this market was relatively insulated. In any case we are completing 150 years of existence, so would be promoting with that only.

Do you plan to add more brand ambassadors in India?
 Right now we have Shah Rukh and Karun, we have a very good relationship with Priyanka Chopra but we do not have any contract with her. In the last 2-3 years, our offerings have been more on the masculine side and we are waiting to be back massively on the feminine side before getting back to Bollywood and renewing a brand ambassador. We may have Priyanka back. I expect her to be the brand ambassador but we will talk to other couple of actors as well. We will take an official call on Priyanka next year as we have many watches for women lined up by that time.

Last year the whole luxury market dipped, how is 2010 looking up?
We grew in India even last year, obviously the growth rate was lower but we still grew and that is an achievement. We are growing in India as economy is doing well and we expect to grow by double digits.

Are your profitable in India?
No, but our key objective in India is to grow the topline and market share. We consider India to be at an investment stage, we are looking to be the largest luxury brand in India and that is the target. If we are a respected brand and topline is growing the profitability eventually follows.

What are your advertising plans?
Print media will stay but you can expect lot of our ad spend on the internet side. This year we will also advertise on the electronic side including TV. You can expect ads on Indian television by end of this year. Our ad spend would increase by over 30% this year, as this is an emerging economy for us with huge potential.

What are the challenges in India?
It is primarily the location, we have marketing and advertising in our control, but we need more high streets and good malls at the right places. Good retail space is a big hindrance and I expect the Indian developers to ramp up retail space fast.