There seems to be more bling than bang in the luxury watch segment in the country which is growing at 35-40% as more and more players join the race from far and wide.
From paucity of retail space to high customs duty, hurdles abound
MUMBAI: There’s bling and bang. But there seems to be more bling than bang in the luxury watch segment in the country which is growing at 35-40% as more and more players join the race from far and wide.
The picture of growth is promising indeed. So is the entry of newer players. But all’s not hunky-dory, with several big watchmakers complaining of myriad hurdles on both the trade and retail fronts.
Says Ashit Narula, Asia sales and marketing director of Swiss watch brand Schwarz Etiene: “We have to pay 65% as customs duty. Besides, luxury watch dealers are scared of trading in the country.
In places like Dubai and Switzerland, the profit margins are as high as 60-70% and when it comes to India it is very low. Secondly, the cost of advertising in India is very high. We launched three brands — Stifani, August Reymond, Schwarz Etiene — early this year. Our current strategy is to focus more on advertising and marketing without which sales won’t go up.”
Stifani operates in the price segment of Rs 10,000 to Rs 15000. August Reymond, which is the oldest Swiss company, operates between the price range of Rs 25,000 and Rs 1, 55,000. Schwarz Etiene is the most expensive of the three brands and the prices range from Rs 1,00,000 to Rs 75,00,000.
Mahesh Mehta, manager business planning and merchandiser, Priority Marketing, which distributes brands like Emporio Armani, Fossil, DKNY, Kenneth Cole Reaction, Aspen, Levis, and others, says: “The biggest challenge in the luxury watch market is that the volumes are low and the valuation is very high. Also, India has a blooming grey market, which nestles fake watches of almost every brand.”
The costliest brand that Priority has sold so far is Emporio Armani, which operates in the price range of Rs 18,500 and Rs 43,000.
Tissot is facing tough challenges in terms of retail.
Sachin Jain, brand manager, Tissot, adds: “There is a serious dearth of proper retail space for premium and luxury brands. The spaces that are available here are more expensive than spaces available in France. That is a major challenge for us.”
The costliest brand that Tissot sells in India is a T-Touch platinum costing Rs 6,00,000. “The mall spaces which are available are crowded by all sorts of people. The typical target group of a luxury watch brand would not hang around in a mall. Moreover, the categories and brands in a mall are all mixed up.
You will get a typical grocery store and a premium apparel brand in the same floor,” says Ajoy Chawla, business head, Titan watches. Titan houses a brand called Nebula, a gold watch for both men and women.
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