Business Today Net Special

Timex's New Track

Ever since it split up with its former partner, Titan Industries, things haven't been the same for the American Watch-maker. But its new CEO, Kapil Kapoor, is making a vigilant comeback attempt. He recently launched a Matrix range of watches to take Titan head on. If marketshare is any indicator, Kapoor's strategy may be working. But it's a tough battle ahead.

By Venkatesha Babu

Kapil Kapoor

Takes a beating, keeps on ticking: used to be an old tagline to advertise Timex in the USA, way back in 1960's. Timex in India is pursuing the same path. In spite of incurring massive losses - after its break up with Titan way back in 1998, the company has persisted with the Indian market and claims that its aim is to be the numero uno.

In order to achieve this the company recently launched 'Matrix' range of watches in the Rs 1,000 to Rs 2,000 range. After its breakup with Titan, the company had mainly focused on the lower end of the watch market comprising the sub Rs 1,000 market in order to chase volumes. Here it competed with the likes of Sonata from market leader Titan, Maxima from PA industries, Swarna and Shreyas from the public sector HMT. Admits Kapil Kapoor, Managing Director of Timex "We were shackled by the Joint Venture with Titan. Already we were competing with them in the lower end as well as in the higher end with Cognoscenti range. Now with the new Matrix range we expect to go head to head with them."

The Indian watch market is estimated at 30 million pieces per annum valued at Rs 1,200 crore. Of this 11 million pieces are sold in the organised sector, but by value it comprises nearly 85 per cent of the market. The worrying aspect has been that the market has been growing at a paltry 2 per cent per annum. Titan, Timex and HMT are the prominent players in the organised sector of the market. Titan has a marketshare in excess of 50 per cent. Timex claims a marketshare of 22 per cent and says that it is growing at 40 per cent marketshare. Rest is shared by HMT and other regional players like PA Industries and Sitco.

Kapoor says, "Unlike the international market, which is in the shape of a pyramid, the Indian market is in the shape of a hourglass. With the launch of the Matrix range we expect to expand the middle segment of Rs 1,000 to Rs 5,000 worth watches. Already, when the overall market is growing in single digits, we are growing at a scorching pace of around 40 per cent. This is a clear indication that we are grabbing market share from other players, in the marketplace. We want to have around 35 per cent market share in the next three years."

A senior official from its public sector competitor who does not want to be named however pooh poohs Kapoor's claims. "Though Timex is witnessing growth it is definitely not at 40 per cent. Also the company's primary pitch is on the technology platform and trendy looks that appeal mainly to the y-generation. This leaves a vast swathe of market under-addressed."

Kapoor is unfazed by this, and says the Matrix collection, which has a bi-colour (steel and gold) look will appeal to the major chunk of the society. He says, that the market is shifting away from gold plated watches. The new range would be available in 5,000 outlets across the country. Kapoor says that his company won't pursue an exclusive outlet strategy. "The days of exclusive outlets are over. The multi-brand outlets will rule the roost from now on, as customers are very discerning and want to compare brands before buying."

The Rs 100 crore company approximately, expects the new range in helping it to cut its losses by half in the current fiscal. Elaborates Kapoor, "By 2003, we expect cash breakeven, and by 2004 we expect to make profits." The $600 million Timex Watches B.V owns currently around 80 per cent of the company. The public holds the rest. Asked about whether the Indian subsidiary would look at buyback offer, Kapoor smiles wryly and says, "No comments for the present." The company has a manufacturing unit in Noida, which can churn out 3 million watches per annum. It remains to be seen whether the company's claim of "technology that keeps you ticking" will help the company keep ticking in the Indian market place.

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