The Rs.9,000-crore Titan Industries, a Tata Group firm, will delay its entry into China. Titan, which has tasted success in West Asia and South-East Asia, has carried out surveys of the Chinese market but will not immediately make a foray into the country, keeping in mind its relatively unsuccessful entry into Western markets years ago.
In the 1990s, the company had entered European markets and opened offices in London and Paris. Despite employing European designers and a London-based advertising agency the company?s move did not yield the desired results.
?This cautiousness is coming out of past experience. We believe that we have to test the market well before getting there to do a big launch,? Titan Industries CFO S Subramaniam told FE. ?We have to wait and see. We don?t have a plan yet for the Chinese market. It has huge potential but is not very easy to get into,? he added.
Declining to give a timeline on its foray, Subramaniam said that the company?s policy has always been to take one country at a time and gradually increase market share in each of the countries it is present in. The organised Chinese watch market is pegged at around $2 billion, and is growing at a CAGR of 11% over the last five years. The overall market is segmented into two ? the huge luxury segment dominated by Swiss brands and the other by unbranded local players.
?Unfortunately there is not too much of a mid-market segment in the branded space in China,? the CFO said. However, the company plans to enter the Philippines and Indonesia markets soon. ?These two are going to be our next big markets,? added Subramaniam.
Titan has always had a focus on Asia. It sells through more than 1,500 overseas outlets, many of them being in West Asia. ?We have to be a little patient about the international business. We are not going into 50 countries for the sake of expanding our footprints. If we go, we should establish the brand in that country,? said Subramaniam.
Titan sells more than 1.5 crore watches in the domestic market and is said to control 30% volume and 47% of the value of the watch market. Titan?s watch exports still comprise only 7% of its revenues valued at R100 crore.
While for the Tatas the foreign expansion has been largely successful, the Titan Jewellery brand, Tanishq, also faced a huge reverse when it entered the US market in 2008. The company, which produced its first watch in 1987, now sells more than R1,500 crore worth of watches.
