Project Report on the Consumer Behaviour

of the Indian Watch Industry

Presented By:

PGPM 08

Marketing (Minor)

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 GROUP MEMBER DETAILS
Name Enrolment No.

Akanksha Surana 010108039

Aparupa Adhikary 010108072

Arijita Chanda 010108044

Bishakha Biswal 010108186

Debapriya Ghosh 010108050

Deepshikha Choudhury 010108001

Maitrayee Bhattacharjee 010108184

Neha Marwah 010108101

Shama Agarwal 010108123

Supriti Tantiya 010108152

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 ACKNOWLEDGEMENT
We would like to take this opportunity to express our sincere gratitude to our
mentor, Prof. Malay Bhattacharjee for giving us this opportunity to carry out
this project work.
We thank him, for his continued guidance and support, and for having faith in
us that we will carry out this responsibility excellently. We feel fortunate
enough for the kind of affection and attention we got from him during the
project, who taught us not only the technicalities but also how to achieve clarity
and perfection in analysis and presentations.
Lastly we appreciate our team for this joint endeavor and close cooperation
without which this would not have been possible.

Regards
PGPM 08

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 CONTENTS
SL NO. TOPICS PAGE
NO.
1 Executive Summary 5
2 Industry Overview 6
3 Watch Market Map 7
4 Major Players 8-9
5 Consumer Behavioral Factors 10

6 Consumption Pattern 11
7 Emerging Trends 12
8 Factors transforming Indian Watch Industry 13
9 Future of the Indian Watch Industry 14-15
10 Organized v/s Unorganized Players 16
11 Conclusion 17

12 Sources 18

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 EXECUTIVE SUMMARY
This project deals with the consumption behavior and consumption pattern of
the watch market in the Indian economy. An in-depth study of the watch
industry has been conducted to draw a clear picture of the organized sector of
this industry, for which the unorganized sector and other devices such as cell
phones pose a major threat. An industry overview followed by a study of major
players in the market, their pattern, design, target segment have been briefly
dealt with. The watch market has been sub-divided into formal, classic,
fashionable and sporty. The behavior of the consumer in terms of factors like
durability, price sensitivity, utility, aesthetic appeal, brand, etc., along with
factors shifting or transforming the Indian watch market is being identified. The
behavior of the consumer and the consumption pattern is essential from the
point of view of identifying the trend and determining, forecasting the future of
this industry so as to aid in the planning process and act as per the requirement
of the consumer at large.

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.

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.

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 INDUSTRY OVERVIEW

India is an under penetrated market for watches. Only 27% of Indians own a
watch. Total estimated volume as per 2008 is 44 million units and value of
Rs.2700crores. Vast proportion of Indian market is below Rs 500 by about 68%.
The market Share of Indian Watch Industry 2009 Market has been split into:

 Low end
 Mass market
 Premium and Luxury Brands

50 million wristwatches are sold in India every year. Notwithstanding the

presence of global players and the opening up of the market, the Indian market
has always been dominated by a single player. In the past, till the late 80’s, in
the mechanical era, HMT dominated the market. And after that it has again been
the domination of a single company, Titan. Today Titan has almost 65% market
share of the organized watch market in the country. The organized watch
market itself is estimated at 35% of the total industry size. In value terms, the
size of the organized market is estimated at around Rs. 1500 crores, which
means that the average price of watches sold even today is less than Rs.1000.

Watches are typically segmented into specialist watches and fashion watches.
All International watch brands have a clear position as to where they belong. In
India most sales are in the fashion segment and this fine distinction has not yet
been used by marketers. 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.

Since penetration is still low and the unorganized sector big, this industry has a
lot of scope to grow both in value and volume. The jury is still out though
whether the Indian companies like Titan will lead this growth or the global
majors like Seiko, Citizen Etc. After all the domestic players have hitherto
grown because of a retail strategy and the wining global players are clearly
focused on product.

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 WATCH MARKET MAP

The watch market can be broadly sub divided into formal, classic, fashionable
and sporty kind. The preference of the ‘watch kind’ depends on an array of
factors ranging from age group, income corridor, taste and preference, peer and
reference group, occupation, to price, gender, Fad or trend. The market
segmentation may also be done on such basis where various brands concentrate
on specific type, from classic to sporty. More so, the formal and classic watches
are more often than not on the higher range side, while fashionable and sporty
watches generally have a wider price range. There is also the unorganized sector
which majorly deals in fashionable and sporty watches at a much lower price,
which becomes a major concern for the organized sector.

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 MAJOR PLAYERS
HMT-
 First major watch manufacturer in India and undisputed market leader till
the entry of Titan
 Offshoot of India’s self-reliance and import substitution concept
 Main quality offered sturdiness and reliability
 As a market leader very few aggressive advertisement campaign
 No new advertisement drive in recent years
 Still holds a small market share among the old faithful loyal
 Lack of new and trendy design has led to erosion of value among the new
generation

TITAN-
 A joint venture between the Tata group and the Tamil Nadu Industrial
Development Corporation
 Launched in 1984
 Titan is today world’s sixth largest, integrated watch manufacturer and
India’s largest
 4 factories - main watch and jewellery plants in Hosur near Bangalore
(India’s ‘Silicon valley’), Watch Assembly plants at Dehradun and in
Himachal Pradesh, with an ECB plant in Goa
 Investment of over US$130 million. A 450,000 [Link]. state-of-the-art
facility
 Leader in the watch and jewellery businesses in India
 First and largest branded player in the jewellery (Tanishq)
 Covers more than 50% share of the organized watch market
 Over 60 million watches sold across 30 countries
 Brands offered: Steel, Edge, Raga, Sonata, Fastrack, Regalia, Bandhan,
Sonata, Nebula, Flip, Purple, Chocolate, Ocean etc.
 Recently Titan has taken a drive to improve its image as a maker of
contemporary style and design in wrist watches
 Titan is trying to offer international quality/style at an affordable price

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TIMEX-
 The main focus is on reflecting a sporty and fashionable look for the
men
 In the ladies segment it is offering highly stylized bangle bracelet watches
that are sleek and sophisticated.
 The advertising campaign aims at focusing on power, precision and
timing.
 Brett Lee was their brand ambassador.

OTHER PLAYERS-
 Mainly Rado, Tommy Hilfiger and Evidenza from Longines.
 Tommy Hilfiger is positioned in the mid and premium segment while the
other two players are in the luxury segment.
 Trying to catch the up-market, urban, western-minded youth.
 Also offer a sense of exclusivity and style as their products are distributed
through some selected outlets.
 Using high society and stylish brand ambassadors such as Shahrukh
Khan, Aishwarya Rai, Yana Gupta, Lisa Ray.

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 CONSUMER BEHAVIORAL FACTORS
 Transition from mere time keeping device with functional benefits like
durability, toughness and economy to a personal wear reflecting people’s
lifestyle and aspirations

• Multiple ownership

 Price sensitive

 Durability and utility are important aspects

 Aesthetic appeal and trendy designs are very important

 Brand Name continues to be an important driver in the customer’s mind

 Availability in different segments and for different occasions makes the

watch a suitable gift item.

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 CONSUMPTION PATTERN
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.

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 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 utilize 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.

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 EMERGING TRENDS
Based on the above consumption pattern we found out that consumerization in
India is a result of four factors:-

 Demographic patterns
 Effect
 Enablers
 Outcome

The demographic pattern of India shows, that India has a rising percentage of
young population, which leads to the increase in the income levels of consumers
and results in the changes in spending pattern.

The rise in population can also be accounted for as more and more people come
and reside in urban areas. Again, trend shows more number of women is also
employed which leads to changes in spending patterns and increased spending
power. Thus this leads to the consumption of lifestyle items.

This is shown in the following diagram:-

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FACTORS TRANSFORMING INDIAN WATCH INDUSTRY
 Shift in structure of demand-
 Volume growth driven by the low end.
 Value growth driven by the luxury segment.
 More global and local players-
 Significant increase in competition in all segments
-Luxury end : Swiss brands
-Mid to upper end : Global fashion/ Japanese brands
-Low end : Local/regional IMFQs, Chinese imports
 Emergence of distinct consumer segments-
 Sharply defined consumer segments around distinct buying
factors.
 More awareness of brands and global trends among affluent
urban consumers.
 Emergence of new channels –
 New retail outlets emerging (Dept. stores/malls)
 Existing outlets (MBOs) getting smarter looking
 Unorganized retail at low-end

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 FUTURE OF THE INDIAN WATCH INDUSTRY

 Incorporating new functionalities in the wrist watch with the help of new
technology:
• Spot watches which offer advanced features such as automatic time
adjustment based on location, access to continually updated content
such as news, traffic alerts, weather reports, stock quotes, sports
scores and instant messaging.
• The Times Data Link watch utilizes a revolutionary new
communications technology that literally zaps information from
personal computer (PC) to watch.
• IBM Linux-based wrist watch.

 Tapping the rural market:

• Huge size of the rural market.

• As tele-density and infrastructure of the rural India improves, it

offers scope for sophisticated form of advertising and method of
sales.

• Launch of Sonata range of watches by Titan in the rural market has

met with great response from the buyers in rural and semi-urban
India.

• Indian rural bazaar is displaying a market trend towards

consumerism and demand for durable products.

 More and more focus on new technology and multi-functional utility:

• Timex are the leaders in this area with watches like-

 Internet Messenger

 Digital Heart Rate Fitness System

 Watch consumption in India – 20 units/1000 people as opposed to China

– 50/1000:

• Scope for increasing the demand of watches

 Top 23 cities: 80% of Watch market

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 • The focus should increase on spreading the market to rural areas

 Greater price segmentation, sp. lower end

• 2 fold advantage: Demand, Market spread

 Greater competition from invisible sector and foreign brands

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 UNORGANISED V/S ORGANISED SECTORS
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.

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.

The above are aiding to the development of the unorganized sector in the Indian
economy which is able to cater to the needs and requirements of the lower
group watch segment which looks for prices below INR 500. This sector is able
to provide watches pricing as low as Rs. 50-Rs. 500. More so, a trend of having
innumerable watches is emerging, for which these low priced retail outlets are
by and large most feasible and attractive to the fickle-minded, demanding,
trendy, westernized lower age group who frequently hop from outlet to outlet to
keep an eye on the upcoming designs and market for present needs.

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 CONCLUSION

Nowadays watches are facing serious competition with cell phones for referring
time, but with the cut throat competition all the leading brands, watches are
managing well in the market and this shows that the charm of watches will
never end whether it is an accessory for some and necessity for others. When it
comes to watches, brands matter more than the design and even the time they
are telling. For those at the helm of affairs brands indicate the richness and
status of the wearer and that is what matters most today. There was a time when
people passed their entire life in one wrist watch, today a man carries a score of
them and yet keep an eye on the upcoming model.

Watches today have to gel with the spirit of the occasion, the mood and the
dressing of the day. Therefore, watches that just tell time and date are rather too
simple for this date. They actually talk about consumers and their status, so
therefore they no longer are necessity; they are a cool fashion accessory for
some and a power of statement for most.

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 SOURCES

 [Link]

 [Link]

 [Link]

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