From watches to diamond jewellery for teenagers, the Tata firm has created many new market segments.
Titan Industries has gone off the beaten track quite often. That explains its product extensions — from watches to jewellery to eyewear. Even by its own standards, the latest task on hand is quite challenging: The company has set its sights on selling diamond jewellery to teenagers, a target audience that has traditionally never made any impact on jewellery sales.
As it tries to entice the first time jewellery buyer with its diamond collection priced at Rs 999-1,500, the Rs 3,800 crore Bangalore-based company’s core strategy remains the same — it will create rather than enter new market segments. It has been doing the same right from the beginning when Tata Press MD Xerxes Desai set up a joint venture with TIDCO to create a new segment in a market then dominated by HMT with its mechanical watches. The company commenced operations in 1987 under the name Titan Watches.
Since then the watch business has evolved through four main brands — Titan for the mid-premium segment, Fastrack for the youth and trendy fashion space, Sonata for the mass market and Xylys for the premium market. “Under Titan itself, we operate through sub-brands like Raga, Nebula, Wall Street, Heritage, Regalia and Aviator,” says Harish Bhat, chief operating officer (watches), Titan Industries. The offerings at various price points ensured that the company has over 60 per cent market share of the Rs 2400 crore organized watch market in India.
In the early 1990s, the company began to toy with the idea of adding jewellery to its portfolio. Like it had in watches, the company decided to differentiate itself from market diktats and entered the jewellery business in 1994 with European styled diamond jewellery in a market heavily dominated by gold jewellery. However, the move did not work. “Earnings were very less. With our high-end offerings and retail showrooms, we struggled with the perception that we were niche,” recalls CK Venkataraman, chief operating officer for jewellery at Titan Industries. Soon, the company made its foray into gold jewellery.
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Titan’s main competitors were local jewellers who, although very successful, were often suspected of cheating people by selling them gold that was of much less standard than claimed. To counter this, Titan launched the Karatmeter, a non-destructive means to check the purity of gold, which according to Venkataraman, helped build customer confidence in the brand.
Brand strategy specialist Harish Bijoor terms this as one of the main reasons for Titan’s success. “Titan has entered categories where there was a lot of misuse. It entered the jewellery segment at a time when customers did not trust jewellers. Similarly it entered eye wear at a time when consumers did not trust opthamologists. They have been two steps ahead of the consumer in predicting what they want and that has been their greatest strength,” he says.
With the goodwill earned from the Karatmeter, the jewellery division posted its first profit in 2000-01. In the next five years, the company had launched around 30 Tanishq stores and new collections like Arya and Diva. This was followed by popular collections like Colours in 2004 and those inspired by Hindi films. Despite the growing popularity of Tanishq, Titan realised that in tier II and III cities, local jewellers continued to hold their dominance due to their traditional gold offerings. For this, the company launched GoldPlus, its second major brand in 2005 where 90 per cent of the collection comprised gold. “For people in smaller cities and towns, gold was more of an investment rather than adornment and they were very conscious of the price. We ensured that we are as competitive as the local jeweller,” says Venkataraman. On the other side of the spectrum, the company launched Zoya, its high-end premium jewellery offerings for the elite where nearly 75 per cent of the offerings are diamond-based.
With the help of the segmented approach, Titan has managed to garner 4 per cent market share in the Rs 80,000 crore jewellery segment. While the company is still known for its watches, the sheer volume of the jewellery business has now made it a bigger business. Today, the company's jewellery division has 115 Tanishq stores, 29 GoldPlus stores and two Zoya stores.
But not all its moves have paid off. Titan’s international operations faced setback when it recorded losses in Europe. The company with its watch business had entered 12 countries in Europe in the early ’90s and exited in December 2006. Titan is learnt to have suffered losses of Rs 110 crore during FY 07 as it was not able to compete with the popularity of the Swiss and Japanese watches in those markets. Similarly, the popularity of Tanishq among the NRIs prompted it to expand presence in the US through two Tanishq showrooms in Chicago and New Jersey in 2008. However, the company was forced to close down the two stores in 2009 due to the slowdown.
Even as the jewellery segment records a growth of 30 per cent, Titan is betting big on its latest venture, Titan Eye +, which is the prescription eyewear business. Started in 2007, there are now 71 Titan Eye + outlets in the country where it has a portfolio of 20 prescription eyewear brands and 15 sun glass brands.Titan is planning to increase it to 85-90 stores by March 2009.
Although a minuscule part of Titan revenues at present, Ravi Kant, chief operating officer- Eyewear business says that the company’s focus is to grow it into a Rs 500 crore brand in the next three years. Brands like Lawrence & Mayo, GKB Opticals and Vision Express are rapidly expanding their presence in the country.
And so it’s time perhaps for Titan to create a niche in a new market yet again.