August 2011 | Vibha Rao
Titan Industries’ impressive success story is literally one for the textbooks. The company has ridden through the downturn by banking on innovation and investing in its brands. Titan’s managing director, Bhaskar Bhat, talks about building desirable brands and becoming a globally admired company
We have benefited enormously from the Indian economy, which has shown an overall income growth. The propensity to spend has increased and people are looking for good brands, good products and good shops. Titan is uniquely positioned in the conspicuous consumption space with products, brands and categories that are highly accessible, and our extensive distribution network brings us close to our customers. Also, with varied price points through multiple brands, our products are accessible to all income classes.
Retail expansion and investing in brands are fundamental drivers in business and even during the recession, we never stopped investing in the consumer. Since we continued to build desirable brands, we have stayed in the consumer’s mind through the difficult period and are reaping more than proportionate benefits now.
I think the Indian consumer has always embraced gold jewellery and the rise in gold prices has not led them away. The Tata name is a big advantage because during a downturn, customers prefer a trusted name. We have a strong brand image with good designs and retail and the consumer realises the benefit of coming to an organised retailer. The outlook for Tanishq is continuous growth; we want to touch Rs100 billion by 2014-15, three times the size of last year’s turnover.
We have had a calibrated approach to global expansion. We started in the early 90s with watches and have been very successful in the Middle East and Far East and have stepped out to South Africa recently. We did go to Europe in the 1990s but that didn’t work as the cost of building a brand in Europe is prohibitively high; the same thing happened when we went with Tanishq to the US.
The biggest challenge is how to sensibly manage this growth. In jewellery, the agenda is to take the share from the current 4.5-5 per cent up to 10 per cent, which is being done by establishing large format stores, and increasing the diamond jewellery percentage.
The next stop is at $3 billion by 2014-15. We aim to significantly increase the diamond jewellery range, set up large format stores and make fine jewellery desirable to the young. The conscious idea is to expand at retail and become a lifestyle company. We plan to add a new category every two or three years and are continuously exploring new categories like footwear, writing instruments, fragrances, leather, etc. Luxury could be our next big step.
Earlier, innovation was restricted to the product design and the manufacturing R&D teams. Today we are increasingly driving the idea of innovation deeper and wider in the company. We have an Innovation School of Management and an Innovation Council; we are also partnering with Indian Institute of Management, Bangalore, to create innovation champions in the company. We had an Innovation Bazaar with 120 counters over two days to showcase innovation. We have many reward and recognition programmes to facilitate cross-pollination, build the science of innovation and popularise innovative technologies.
Our first target is to reach $3 billion, which is going to happen in 2014-15. More important is to take advantage of the continuing prosperity of India, and become very strong in our three categories and create a strong relationship with our 120 million customers. We have a unique combination of manufacturing, marketing and retailing across several categories and are market leaders in three different industries. We want to be India’s most admired lifestyle company and eventually, a globally admired lifestyle company.
This interview is a part of the cover story of the August 2011 issue of Tata Review in which ten Tata CEOs talk about the past, present and prospects of the companies they head: