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ASSOCHAM Says Indian Watch Market to Grow at 15%

The group anticipates the watch market to reach $2.7 billion by 2020.
Jun 13, 2012 5:09 AM   By Dilipp S Nag
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RAPAPORT... India’s watch market is expected to grow at 15 percent every year to around $2.70 billion (INR 150 billion) by 2020 driven by young consumers, the emergence of a strong middle class and a larger number of high-net-worth individuals, according to the Associated Chambers of Commerce and Industry of India (ASSOCHAM).

The legitimate  watch market, currently estimated to be around $898 million (INR 50 billion), contributes up to 40 percent of total sales, ASSOCHAM concluded. The remainder of demand is met by the unorganized black market that consists of smuggled watches, cheap imported watches and those assembled by small unorganized players, it noted.

“There is enormous potential for growth of the industry in the untapped segment,” said D.S. Rawat, ASSOCHAM’s secretary general.

ASSOCHAM explained that due to increased international travel, Indian consumers have become more aware of various brands available globally and are willing to purchase in India. With more international brands entering the Indian market to cater to the growing demand of fashion and luxury watch consumers, it has also created some challenges for local manufacturers, it added.

However, local players still continue to dominate the Indian watch industry due to a solid manufacturing base and a wide range of price points. Rawat said that collaboration, planning and joint ventures in marketing hold the key to success for both domestic and international watch manufacturers.

The study found that with the growing infrastructure in tier II and tier III cities, brands with significant presence in the Indian metros now plan to attract customers through retail partnerships in those cities. “Even expansion of modern retail in India will further fuel the growth of the sector as a watch is increasingly transforming into a lifestyle product from being just a time-keeping device,” Rawat said.

ASSOCHAM noted that some customers look for features with fashion appeal, technology, sophistication and status while others go for durability, economy and precision. Many customers prefer mechanical and automatic watches, while others prefer quartz watches. Newer segments are also on rise such as ladies watches, children’s watches and men’s watches. Customers usually base their preferences and buying decisions on a variety of factors such as price, durability, utility, aesthetic appeal and brand name.

The domestic organized firms include Titan Industries, Timex India, Maxima and HMT while international brands include LVMH, Seiko, the Swatch Group, Chanel and others.

“For most of the international watch brands, India is one of the top priority markets in the world. Companies are looking for an alternative to China to set up their manufacturing base and the government can play a vital role to make India the next destination,” the study reported.

The research highlighted that overall, 45 million watches are manufactured in a year. The highest share of watches sold were in the price range of INR 500 to INR 5,000. The second category of watches retailed were INR 5,000 to INR. 25,000, and this segment is growing at an exponential rate of over 25 percent.

Male watch buyers far outnumber females and account for around 65 percent of sales. Students are the largest segment of buyers accounting for approximately 30 percent of the sales, the study revealed. More than 80 percent of the population is younger than 45 years of age, which presents a great opportunity for future sales. Tissot has emerged as the largest selling Swiss brand in India while Tag Heuer and Raymond Weil are also very popular. Other brands include Piaget, Chopard, Cartier, Rolex, Titoni, Gucci and Movado.
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Tags: ASSOCHAM, Chanel, D.S. Rawat, Dilipp S Nag, HMT, India, LVMH, Maxima, Rapaport, retail, Rolex, Seiko, swatch group, Timex, Titan, watch, Watch Market
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