For Titan Industries, the focus in 2004-05 has been on global aspirations and an aggressive growth strategy in both its businesses: watches and jewellery. Says managing director Bhaskar Bhat,‘‘We hope to triple business over the next 5 years.” The company’s global thrust has been growing at a fast nip. ‘‘On average we have been entering 10 new markets every year. We are currently exploring the idea of entering the Pakistan market and CIS countries, specially Kazakhistan.
We are also looking at extending business further east to countries like Indonesia,’’ says Mr Bhat. At present, Titan is present in 29 global markets for watches, and just 2-3 for its jewellery brand Tanishq. Exports account for 10 per cent of the company’s overall turnover. ‘‘There is an uncertainty in global efforts, the kind of success we would end up with. In order to get a higher success rate, there is a need to spread the net far and wide,’’ says Mr Bhat.
Titan has burnt its fingers once when its foray into 11 European markets with a œ 9 million investment in brand building failed to give the kind of returns it had been targeting. The company in April 2004 restructured its entire overseas operations by consolidating its different divisions in London, Singapore and Dubai into one International Business Division to exploit growth in overseas markets.
‘‘This will help the company to be more focussed in its business and exports rather than scattered across so many divisions,’’ says Mr Bhat. All export business is now looked after by the international division and the company hopes to see the real fruit of its efforts in FY 2006. Following the European fiasco, the company has now adopted a business model of appointing country distributors after evaluating market opportunity.
Promotional expenses are factored into the margins given to the distributors. Only when volumes build up does the company plan to invest in brand building. It is now present in only 4 European markets: UK, Spain, Greece and Portugal. As part of its global expansion strategy for the Tanishq brand, the company plans to target NRIs for its jewellery business. It will test market the brand in US next year. It has already established its presence in the middle-east and Singapore.
The company’s target of 20% year on year growth appears to be on course. Both the watches and jewellery divisions reported strong performance in FY 04, recording a 12% growth in watches (17 % in Titan and 20% in the Sonata brand) 20% yoy during the period. Tanishq saw a 23% growth. The watch division achieved a sales turnover of Rs 534 cr and the jewellery division Rs 425 cr.
In watches, Titan, with its three brands: Titan, FasTrack (targeted at youth) and Sonata (its low-end offering), holds a 60 per cent market share. It sold 6.8 million units last year, with Timex coming a distant second with 1.4 million units.
Says Mr Bhat, "For jewellery the showroom is the brand, so a lot of the marketing effort goes into the showrooms and the point of purchase." The company has set up a separate unit to manage the jewellery retail channel. ‘‘Retailing is an important component in jewellry. We need to make the franchisees feel like partners. The experience at all the stores needs to be uniform and customer interaction should be same. Training becomes critical to align them to company thinking.’’
Titan has the advantage of a huge distribution network of 172 World of Titan showrooms and 8,500 multi-brand outlets for watches. The Tanishq brand is sold through 70 Tanishq stores, of which only 4 are company-owned. Tanishq is expected to grow 35% in sales to 5.7 b in FY 05. It plans to increase penetration by opening more exclusive showrooms across 57 cities over the next 2 years.