The Associated Chambers of Commerce and Industry of India (ASSOCHAM) has projected the market size of Indian watch industry which is currently estimated at Rs.5,000 crore will be worth Rs. 15,000 crore by 2020 due to emergence of strong middle class and a large number of high net worth individuals.
Releasing the findings of a recent study, ASSOCHAM secretary general, D S Rawat said, Indian watch market is set to more than double in the next five to seven years to around Rs 15,000 crore growing at 15 per cent every year, driven by youth and premium segment of consumers.
The organized sector of the watch market alone contributes up to 40% of this figure, and the rest of the demand is being met by the unorganised grey sector. More than 80 percent of the population is below 45 years of age. The average growth in the size of the market is slated to be around 15-20 percent per year.
Mr. Rawat further said that 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 paper also highlighted that overall 4.5 crores watches are manufactured in a year. The highest share of watches retailed is around the price range from Rs. 500/- to Rs. 5,000/-. The second category of watches retailed in the price bracket of Rs. 5,000 to Rs. 25,000 is growing at an exponential rate of over 25%.
Due to increased international travel, Indian consumer has more awareness of various brands available globally and willing to purchase in India. With more international brands foraying in Indian market to cater to the growing demand of fashion and luxury watch consumers, it has also created some challenges for local manufacturers.
However local players still continue to dominate the Indian watch industry due to good manufacturing base and price points at which watches are retailed. “Collaborations, right planning and joint ventures in marketing hold the key to success for both domestic and International watch manufacturers”, adds Mr. Rawat.
“With the growing infrastructure in tier II and tier III cities, brands with significant presence in the Indian metros now plan to woo customers through retail tie ups in these cities”, adds the paper.
Male watch buyers far outnumber females and account for around 65% of sales. Students are the largest segment of buyers accounting for approximately 30% of the sales, mentioned the paper.
Tissot has emerged as the largest selling Swiss brand in India. It is estimated that Tissot's volume sales during 2010 in India crossed 50,000 watches with average retail price recovery of Rs 15,000 per watch. In volume terms, Tag Heuer and Raymond Weil also became very popular.
“Even expansion of modern retail in India will further fuel the growth of the sector as a watch is increasingly transforming into a lifestyle product from being just a time-keeping device”, Mr. Rawat said.
In terms of volumes, the organised players currently command 40 per cent of the industry and the rest 60 per cent by the unorganised segment, which consists of smuggled watches, cheap imported watches and those assembled by small unorganised players, adds the paper.
However, the organized players that include domestic firms such as Titan, Timex India, Maxima and HMT, and a host of international brands and companies such as LVMH, Seiko, the Swatch Group, Chanel and others.
"For most of the international watch brands, India is one of the top priority markets in the world. Companies are looking for an alternative to China to set up their manufacturing base and the government can play a vital role to make India the next destination”, mentioned the paper.
Amongst the Swiss and other brands like Piaget, Chopard, Vacheron Constantin, Corum, Baume & Mercier, Panerai, Maurice Lacroix, Cartier, Rolex, Titoni, Raymond Weil, Bucherer, Gucci, Esprit, Carerra, Breitling, Movado, Ebel, Giordano, Triumph, Beverley Hills Polo, Romanson, Chanel, Van Cleef & Arpels, Montblanc, Dunhill, Jaeger- LeCoultre, Bovet, Follie Follie amongst others.