There is no community of individuals quite like Titanians and no consumer products company in India quite like Titan — restive by nature, maverick at heart, almost compulsively successful and forever in search of the next big idea. Maybe that’s what it takes to go from scratch to a yearly turnover of Rs65 billion in 24 years, from fledglings to market leaders in three fiercely
competitive consumer segments.
This special kind of company and its special breed of people know they are distinctive and they want to make the most of it. “We are a unique enterprise,” says Bhaskar Bhat, the unassuming managing director of Titan Industries. “We are brand owners as well as retailers and we are market leaders in each of the retail businesses we are in. The external world looks at us and they don’t see a comparable company.”
Titan is, essentially, in the business of making people look good and feel good. The company’s three major divisions — watches, jewellery and eyewear — are ensconced in the lifestyle universe, and personal adornment is the principle here. A fourth venture, precision engineering, finds its fit in a far different space, a chess player in the midst of wiry athletes, but with the potential to reap riches in a mushrooming industry.
Titan becoming what it has may seem like a somewhat serendipitous kind of evolution. “We never set out to become singular; it wasn’t by design this has happened,” says Mr Bhat. The company, a joint venture with the Tata group and the Tamil Nadu government as partners, was established in 1987 as a timepiece manufacturer in an age when Indians had extremely limited choices in watches.
Titan’s jewellery brand, Tanishq, and its eyewear business, Titan Eye+ have sprung into existence on the back of the watch division’s multiple triumphs, not least with technology and design. These later ventures highlight Titan’s ability to thrive by pinpointing nascent consumer needs and creating categories and brands to serve those needs. “We are constantly seeking opportunities in clear-cut consumer segments: youth, women, mass market, rural,” says Mr Bhat.
It’s about people
“We are able to better spot consumer opportunities because of the kind of company we are,” says Mr Bhat, “Our extensive presence enhances our ability to understand the market and capture the signals emerging from there.” He is referring to a retail network that stretches across some 700 stores spanning the length and breadth of India. “We have the research data and that is useful, but more valuable is our franchisee network. These are guys who are connected to our customers on an everyday basis.”
Running a franchise network, Mr Bhat adds, is less of a hassle than running a large manufacturing operation. “Having said that, there are substantial challenges in expanding our network, in improving our interaction with customers.” The complexity comes from, for instance, meeting customer and franchisee expectations as well in Chandigarh as in Thiruvananthapuram, two places that are poles apart culturally and temperamentally.
The people factor has been as crucial as any in making Titan the company it is. It’s not a stuffy place; there is no food-chain hierarchy or formal dress code (senior executives in denims are a common sight). “First and foremost, we spend a lot of time in getting involved with our people,” says Harish Bhat, the soft-spoken chief operating officer of the watches division. “We encourage debate and dissent before arriving at conclusions. It’s a culture of empowerment.”
This culture has bred unpretentious behaviour and down-to-earth habits: a chief operating officer who rides to office on a bicycle — that’s practical as well given Bengaluru’s anarchic traffic — and a managing director who regularly uses the local bus service to get to the airport and back when he has to fly.
Titan has benefited too from the continuity and stability that comes from having, for long years, the same set of people in senior positions. For many of them the company has been their first port of call and this is where they have spent their entire careers. “We hire well, we hire with care,” says Bhaskar Bhat. “We have tried to fashion an internal culture where the hunger for growth is acute, where people have the freedom to function, to take risks and to fail while doing so.”
Wings are for spreading
The story of Titan is in a way the story of the Indian marketplace (the setting up of the company preceded the economic liberalisation of the early 1990s by less than five years). “The opportunities and the dynamism in this marketplace have been mirrored in Titan, and we represent to an extent the changes seen there,” says Mr Bhat. “Raga, the watch collection we introduced for women, and Fastrack, our youth brand, are reflections of this reality.”
Titan’s expansion from watches to other lifestyle spheres was fuelled by a yearning to break free of confinement within a particular consumer segment. “We realised that the Titan brand would get limited if we stayed with only watches,” says Mr Bhat. “And we realised that the brand’s values — quality, engineering, precision, reliability, style — could be extended to other categories.”
The commonality that binds the company, that makes it a single whole rather than the sum of disparate components, comes by way of a shared value system and employee policies. “Everybody here has to feel they are part of one company and that is challenging,” says Mr Bhat. “This means cultivating and cementing a culture of openness and transparency, of risk-taking and innovation, of people-centricity and customer-centricity.”
No waiting on watches
Though it has been overtaken by its jewellery sibling on turnover and profits, the watch business remains the centrepiece of Titan’s operations. This is where it all began for Titan and nobody in the company can, or is inclined to, dilute its importance.
The watches division’s numbers are staggering. Titan has produced more than 135 million watches since inception and manufactures in excess of 13 million pieces a year. It sells in more than 12,000 outlets in 2,000 places across big and little India. It has an exclusive network of 340 showrooms and about 850 service centres. And it also retails in 29 countries spread over four continents. To round it off with a quaint figure: every four seconds there is a Titan watch being sold somewhere on this planet.
“There are six reasons for our watch business being so powerful and iconic,” says Harish Bhat. “A strong portfolio of brands — there are few examples of companies owning the first, second and third brands in a customer segment — outstanding competence in design, the excellence of our technology, our extensive network, our control of the value chain, and our innovation efforts.”
Mr Bhat foresees a future where Titan will be counted among the world’s top three watchmakers (it is currently in fifth position). “That is a very, very clear objective we have over the next five to seven years,” he says. “We want to be at least twice our present size by then; we want to sell upwards of 25 million watches a year at that point.”
On the cards, then, is a plan to expand Titan’s retail network to more than 15,000 outlets, open a minimum of 1,000 new brand showrooms, and craft products that are more sophisticated and compelling, and can sell at higher prices. At the other end of the spectrum are ‘nano’-priced watches, a few of them going for as cheap as Rs75.
That makes sense in a market where competition is frenzied — some 65 international watch brands are sold in India today — where everyone from Seiko, and Citizen to Omega, Esprit and those cut-price Chinese players is pushing their wares. “We have to ensure that our brands can not only withstand the onslaught of these competitors but also gain market share,” says Mr Bhat.
Turning brands such as Sonata and Fastrack into uncharted terrain is part of the grander game plan. “We have to unlock the power of these brands,” says Mr Bhat, “and we can do that by extending them into other accessory categories: helmets, footwear and the like.”
Jewellery and more
Titan’s jewellery business may be fundamentally different from its watches enterprise but the broad rules governing them are similar: quality, reach, reliability and customer focus. The growing spending power of middle India is another common factor influencing sales in jewellery and watches.
“More people are favourably disposed towards brands today,” says CK Venkataraman, the chief operating officer of Tanishq, “especially a brand like Tata. Over the last 10 years, especially, their income levels have risen considerably. These people move about a lot through transfers and relocations and Tanishq has, in a way, become a local and trusted jeweller to this large migrant population. And they consider jewellery an adornment rather than merely an asset.”
Tanishq concentrates its attention, predictably enough, on women and to no little extent on the modern Indian women. “Tanishq’s creations are designed keeping this kind of woman, this archetype, at the centre of the frame,” says Mr Venkataraman. That said, the brand retains the old-fashioned in its soul. “The jewellery business is still traditional at its core and we have to participate in that traditionalism if we want to dominate.”
In other matters, though, Tanishq is like no other jeweller in India. It introduced Indian consumers to the Karatmeter, which validates the purity of gold, and it has greatly influenced the general approach to jewellery design and marketing. Its scrupulous practices are unusual in an industry where the opaque and underhand are commonplace. Most importantly, it has endeavoured to improve the lot of jewellery artisans — among the most exploited workers in India — through a slew of extraordinary initiatives.
Tanishq remains the top-selling jewellery brand in India. This is a market that tends to get compartmentalised regionally, with local players dominant in their backyards. “But our franchisees have given us a big break in terms of reaching small towns, in behaving like local jewellers but much more professionally,” says Mr Venkataraman.
Understanding ethnic tastes — Maharashtrian jewellery for Maharashtrians, Bengali jewellery for Bengalis — is critical in the circumstances and Tanishq has taken a lot of effort to develop that understanding, mainly by going to different regions, setting up design studios there and working more closely than ever before with local franchisees.
The rise and rise of the price of gold, which dominates in the Tanishq basket of offerings, is a concern, though not an overriding one. “It does bring pressure on customers, but we have grown spectacularly over the last year,” says Mr Venkataraman. “Typically, when prices settle people come back to the market, simply because there is no substitute. Jewellery is not just an investment. I mean, you can’t purchase a share certificate for a wedding.”
The difficulty on price comes with the delivering of value, as seen through the eyes of customers. “What I get for, say, Rs50,000 is becoming smaller and smaller,” explains Mr Venkataraman. “That’s what we have to deal with: how to bring in technology to make our jewellery ultra-lightweight so that we can use the same surface area and fit a specific budget.”
Not more of the same
An area where Titan has struggled is with exports (barely 2 per cent of volume currently, and only in watches). The main reason for that is, with its growth in India at 35-40 per cent, the allure of expansion abroad is dim. “We didn’t believe in making losses today in the quest for a big tomorrow, which is what tends to happen when you go overseas,” says Bhaskar Bhat. “That’s the big thing left for us to do, make a significant play internationally.”
Mr Bhat would also like to see Titan taking more risks. “By more risk I don’t mean somebody at the top, like me, saying that’s what we should be doing; it has to be an organisational effort.” Titan is targeting a turnover of Rs150 billion by 2014-15. “We may not succeed with some of our plans, but that’s okay,” says Mr Bhat. “What we don’t have as yet is an organisational capability to think like that. We are now the fifth-largest company in the Tata group; we were nowhere in the picture 10 years back. But I still see Titan as underperforming.”
Titan is sometimes called a South Indian, middle-class company — “We take that as a compliment,” says Mr Bhat — partly due to its association with Bengaluru. What it has to set its mind on now, adds Mr Bhat, is becoming a globally admired enterprise.
The culture of listening, learning and leading that has been planted and nurtured in the company means it can realise that goal. A titan with its pedigree, track record and name deserves no less.