 "We'll treble e-commerce revenue in 3 years: Bhaskar Bhat")
Watch and jewellery manufacturer Titan Company has reported a decline in revenue in the first quarter, which it attributed to the withdrawal of the Golden Harvest savings scheme by the government. Bhaskar Bhat , managing director, Titan Company, tells T E Narasimhan that the sentiment is weak, but the company will continue its expansion plans. Edited excerpts:
Titan’s revenue is down 6.3 per cent in the first quarter. Does it mean rural demand is declining?
One of the key factors is that the Golden Harvest scheme in jewellery was withdrawn last year. As a result, the company could not retrieve a significant part of the revenue, about 25-30 percent, in the jewellery division. In the first quarter, the watches segment has grown and so has the eyewear division. The jewellery segment, without the Golden Harvest scheme, has grown by around 40 per cent. The sentiment is weak, but I am optimistic about the future.
Does this affect the company’s expansion plan? How many stores you are planning to add this year?
We will continue to expand. At present, the company has 180 Tanishq stores and another 35-40 will be added. The other focus will be eyewear, which is growing at 20 per cent. At present, there are 390 eyewear stores and another 60 stores will be added by March 2016.
What about Goldplus?
The company has 31 stores and is going slow on expansion considering the segment caters to investment-oriented business. Besides, this is a low-margin business unlike Tanishq.
Your expansions are largely franchisee-driven, but analysts say Titan is finding it tough to get new franchisees. What is your view?
It is a temporary issue and those franchisee (which are not joining on board) are short-sighted. Titan’s inherent brand equity will address this issue.
What sort of opportunities do you see in e-commerce?
At present, around Rs 100 crore comes via e-commerce. We hope to treble it in three years.
Titan’s revenue is down 6.3 per cent in the first quarter. Does it mean rural demand is declining?
One of the key factors is that the Golden Harvest scheme in jewellery was withdrawn last year. As a result, the company could not retrieve a significant part of the revenue, about 25-30 percent, in the jewellery division. In the first quarter, the watches segment has grown and so has the eyewear division. The jewellery segment, without the Golden Harvest scheme, has grown by around 40 per cent. The sentiment is weak, but I am optimistic about the future.
Does this affect the company’s expansion plan? How many stores you are planning to add this year?
We will continue to expand. At present, the company has 180 Tanishq stores and another 35-40 will be added. The other focus will be eyewear, which is growing at 20 per cent. At present, there are 390 eyewear stores and another 60 stores will be added by March 2016.
What about Goldplus?
The company has 31 stores and is going slow on expansion considering the segment caters to investment-oriented business. Besides, this is a low-margin business unlike Tanishq.
Your expansions are largely franchisee-driven, but analysts say Titan is finding it tough to get new franchisees. What is your view?
It is a temporary issue and those franchisee (which are not joining on board) are short-sighted. Titan’s inherent brand equity will address this issue.
What is your capex plan for this year?
We will spend around Rs 150-200 crore to set up few company-owned stores, on manufacturing, technology and other areas.
What sort of opportunities do you see in e-commerce?
At present, around Rs 100 crore comes via e-commerce. We hope to treble it in three years.