Timex India, the R200-crore subsidiary of the US-based watch maker Timex Group, recently opened its first luxury watch store in Bangalore. The global watch company, which is seeing a 100% growth year-on-year in its luxury category, is looking to add 25 luxury outlets across top six cities in the next three years.V D Wadhwa, managing director, Timex Group, India tells FE?s Debojyoti Ghosh that he sees significant potential for growth in the luxury watches category that currently has only about 30 retailers across the country:

What made you look into the luxury watch segment?

As far as Timex India is concerned, the luxury segment is new to us. We are just less than two years in this space. Having introduced brands like Salvatore Ferragamo and Versace through some of our boutiques and bigger outlets, we have been keeping a close tab on consumer behaviour and noticing that there is a significant demand for luxury watches across the country.

In most of the cities these brands are not present, but the purchasing power and intent to buy luxury items is very much there.

As a brand we always had a plan to expand our distribution channel and set up more retail outlets. So this is an extension of that.We feel there is a need and a scope at least in the metros for more high-end luxury outlets.

What is the kind of investment that goes into setting up luxury outlets? What is your overall investment plan for this year?

For high-end stores it is extremely important to have the right location and ambiance. The store size and access has to be good. We are in constant search for such properties across the country. Overall investments required for setting such stores is around R40 lakh, both in terms of interior and stock, while the rental is separate. Depending on the city, the rental goes up, but the stock and interior cost doesn?t change.

Our initial plan with luxury outlets will be targeted at the major metros. Beyond the big cities, retailing is not so evolved that consumer will buy a R2 lakh watch.

Overall for our expansion of retail chains across the country we invest about R5 crore a year. This year also we have plans to invest a similar amount. These investments also include our luxury business expansion plan.

Today, most of the high-end international brands have their own standalone stores in the country. In such a market, what is the scope for your luxury watch stores?

There are two different customer profiles. One, a brand loyalist who will only visit the standalone boutique store and who will normally shop for different items ranging from shoes, bags, perfumes, clothes and not just watches. They don?t go with an intention to only buy a watch. Whereas for luxury watch buying, we are talking about profile of customers who are getting into the store with an intent to buy watch. In that case, the customer would like to see other brands and not just one particular brand.

In the 90?s, we have seen ?Timex? as a popular brand among youngsters, but in the last few years the brand seems to have lost that connect. What went wrong?

Timex has always been positioned as a youth and sporty brand, which is high on technology.

In the last six to seven years, the brand has matured. Seven years ago, it was only Titan and Timex. Titan was catering to a more matured consumer, while Timex was targeted at a younger population. However, we had a lull period in the last few years. As far as the brand positioning is concern we are still a ?youth?brand.

Our effort has been always to use the latest technology at an affordable price. Overall, the organised watch market in India is estimated at R3,000 crore, of which we currently have a market share of 7%. There is a large chunk of business that happens in the below-R1,000 price band. However, we normally operate in the R1,000-12,000 price range, where we command a market share in high-double digits. The average price point of our watches is about R3,500.

Going forward how do you see the brand performing?

Our focus for the last two years is to build new brands like Helix, which is our youth brand for the Indian market. It?s very competitively priced between the range of R1,200-3,000. The brand is targeted at the age group of 18-25 years.

Our average age profile of customers are about 30-35 years for the brand Timex.

In the last two years we have seen a growth of 30% y-o-y. Of the overall revenue currently, 90% comes from Timex, while the rest is contributed by non-Timex brands. Going forward, we see the mix changing to 85% for Timex and 15% from other brands.