Premium watchmakers discover the economy watches segment.

By Shamni Pande

Around October this year, the high-profile Swiss watchmaker, Swatch, will unveil its upmarket Synchro Beat collection in Bangalore. It won't be an ordinary launch. For one, it will be the SFr 3.6-billion company's first global release from India. But ahead of that, in a largely unmarked event, Swatch will usher in its catalogue edition of older generation watches, priced between Rs 500 and Rs 1,000.

The company is quick to say the catalogue edition won't be central to its marketing strategy in India. But the message is clear: any player who wants to dominate the watch market will willy-nilly need to build a presence in the economy segment, which accounts for about 70 per cent of the 30-million-a-year market. Says Julian Gould, Vice-President (Sales-International), Swatch AG: ''We have finally managed to get our act together and figured for ourselves how the market is likely to react. We are now gearing for a big-big push this year; you'll see an awesome activity from our side.''

There are four organised players in the industry-Timex, Titan, HMT, and Maxima-not counting big transnational labels that have a presence only at the premium end of the market. At the lower end grey market, operators have the lion's share of 60 per cent. The threat is not so much from hole-in-the-wall Indian manufacturers as imports. Notes Kalyanmoy Chatterjee, Vice-President, TNS Mode: ''There are watches available by the kilo, and good imitation watches are going cheap.''

What the organised sector wants to do is make inroads into this market by offering guaranteed, quality products at affordable prices. In October 1998, market leader Titan launched an economy brand, Sonata, with offerings priced between Rs 695 and Rs 1,000. The brand seems to have found the pulse of the consumer. In just one year, its sales have gone up from 1.6 million to 3 million units, and today it has a 20 per cent share in this segment.

A large part of that success came from Titan's aggressive penetration of semi-urban and rural areas, and a generous drop in prices 18 months after the launch. The cheapest Sonata watch now costs only Rs 295, and the most expensive Rs 1,200. In July, 1999, Titan launched Dash (a new range of watches for kids) at an entry price of Rs 250. Says Bijou Kurien, Vice-President (Sales & Marketing), Titan Industries: ''Pricing is a big issue in the mass market.''

Kurien couldn't stress that fact enough. For instance, Swatch-despite its premium brand image-has introduced Flick Flack (a children's range) starting at Rs 450. And an up-and-coming aggressive player in the market is the low-profile P.A. Time Industries, which markets watches under the Maxima brand name. It already has 12 per cent share, and is now consolidating its presence in watches meant for young consumers and professionals. Says Manjot Singh Purewal, Managing Director, P.A. Time Industries: ''We will launch 40 new models every month.''

What marketers are trying to cash in on is the consumer's aspiration-led shift to fashionable brands. For instance, Titan chose to target the sub-Rs 1,000 market to ''tell (consumers) that fashionable brands (like its Fastrack) can be made available'' at affordable prices. Notes Kapil Kapoor, CEO, Timex Watches: ''Indian consumers were not very brand conscious earlier, but now there are aspirations at lower price points.''

Timex itself is busy introducing new models (as many as 300) in prices between Rs 355 and Rs 3,455. Swatch, which has sold 50,000 units so far, is talking of tripling sales this year on the strength of marketing and distribution push. Says Gould: ''We are looking at (reaching) 18 cities and doubling our current 70 points of sale through a bigger presence in multi-branded outlets.'' While growing competition and price wars may spell trouble for the players, the consumers aren't complaining. For them, the happy hours have just begun.

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