Titan Company may be primarily known for its watches and jewellery businesses, but the multi-category lifestyle products company is betting big on its perfume and women’s bag segments—led by respective brands Skinn and Fastrack—to drive growth in the immediate future. Manish Gupta, CEO and VP, fragrances and accessories, talks to Christina Moniz about the growth targets for these verticals and the increasing demand from non-metro markets. Excerpts:
How have Titan’s fragrances and accessories businesses performed over the past year? To what extent has retail inflation impacted growth?
The fragrance business recovered very well during the last financial year, clocking a revenue recovery of 84% over FY19-20 and with a growth of about 56% over FY20-21. We have seen a strong recovery across both our fragrance and accessories businesses. This year, our focus is on the Fastrack girls’ and women’s bags range, as we see tremendous opportunity in this segment. With regard to inflation, our input costs have, of course, been increasing, and we even increased our prices in December last year but the full impact is still not yet felt by the consumer. Perhaps we will see the actual impact of inflation in the second half of this year. However, this is not unique to Titan alone; it is impacting other brands too.
What are your expectations from the women’s bags category?
The bags industry is often clubbed with luggage as a category, and also includes backpacks and school bags. The men’s backpack segment has many strong luggage players, with considerable go-to-market strength. Therefore, we are more excited by the opportunity in the women’s bags category. As per our estimates, this is a
5,000-crore industry with the organised segment growing at 13-14% annually. While 15-20% of the industry is leather-based goods, PU based (polyurethane) bags take the larger share, which is where the growth lies. In the non-leather bags space, we estimate that 40% consists of organised players, at around1,500 crore. This is growing at a much faster rate of around 13% and with the formalisation of the economy, it will grow even faster.
Therefore, Titan is betting big on this segment, and has an ambition of reaching `1,000 crore in five years. We are leveraging our Fastrack girls’ range here too, which is aimed at young college-going girls. We will be showcasing these across our 150-plus stores.
What steps are you taking to drive growth for Titan Skinn in a competitive perfumes market overrun with high-end international brands?
We primarily sell Skinn in department store chains such as Shoppers Stop, Lifestyle and Central. Based on rank reports shared by these retail chains, Skinn has been the leading brand in the stores for the past five years. We are also among the top two players in the segment on e-commerce platforms. Around one-third of our fragrance business today comes from online sales. The fragrance industry is about
5,500 crore annually, according to industry estimates, though close to 60% of this would be deodorants. There is a huge mass of consumers looking to upgrade to fine fragrances, so I am not worried about the presence of international brands. Since experiencing the product is critical, we invest a lot in sampling across stores, malls and various locations, including airports. We already occupy a good position in the segment, and our objective is to reach500 crore in the next two years. We do 360-degree ad campaigns for both the accessories and fragrances businesses, with a greater thrust on digital. On an average, we earmark a good 17% of our revenues annually for marketing.
If Fastrack and Skinn operate in the aspirational market, what kind of volumes do you expect from tier-II and III markets?
We usually categorise our sales as the top eight cities and the rest of India. Currently, 45% of our sales for both businesses come from the top eight markets, and the remainder from the rest of India. However, the rest of India is growing at a much faster pace, especially in the last two years. One reason for this growth in demand is possibly because a large number of professionals moved back from the metros to their home towns. We expect to see high volumes of growth from these markets in the future as we expand our footprint.
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