Titan Company, the lifestyle products brand of Tata group, is on an expansion spree as it nears opening its first store in the US in the next few days. The company aims to have 15-20 global stores functioning in two to three years. Titan CFO Ashok Sonthalia tells Rajesh Kurup that the company is confident of achieving Rs 1,000 crore revenue from the women’s segment in the next five years. Excerpts:
A good Q2 has lifted the spirits of the company and the industry. How do you see demand going forward?
Consumer demand in India continues to be strong, particularly in the jewellery segment. After the huge second wave of the pandemic in Q1 of last fiscal, the recovery in Q2 was good, while Q3 and Q4 were very strong due to spillover and pent-up demand. I would still be cautious in extrapolating the growth in Q2 of the current fiscal to Q3 and Q4. We expect to see a decent growth of 30% in FY23. Overall, the industry is doing well.
Also Read: Titan Q2 profit jumps 34% to Rs 857 cr
What are Titan’s plans to expand to global markets like the Gulf and the US?
We started by opening a store in the UAE in October 2020, and then expanded to five stores. We should be opening our stores in Qatar and Oman in 6-8 months. In the US, our first store would be coming up in New Jersey in the next few days, and then we are looking at about eight to 10 stores across Dallas, Houston, Chicago and the West Coast. In the next two to three years, we should have 15-20 international stores functioning and global operations will start contributing a few percentage points to the jewellery business.
What are your plans for the jewellery business?
Our intention is to grow the business 2.5 times from the FY22 baseline in the next five years, driven by four brands — Tanishq, Mia, CaratLane and Zoya. We are yet to charter store opening plans, but believe Tanishq will continue its run rate of opening 35-40 new stores every year. CaratLane might open another 50-60 stores every year for next two-three years, and Mia, which was predominantly a store-in-store in Tanishq, would now become an independent identity. Mia will be adding 40-50 stores this year and we expect that trajectory to continue for one to two years. Zoya, which added two stores during the year, may see more additions in metro and tier-I cities.
You have an ambitious target of achieving Rs 1,000 crore revenue from the women’s bag segment in the next five years.
The market opportunity could be about Rs 5,000 crore or so, and achieving Rs 1,000 crore is an ambitious target. The market characteristics are fragmented and unorganised, and with our two brands, Irth and Fastrack, we are confident of doing well in this category.
Eyecare is also a growing segment in the country. What are your plans for Titan eyecare?
This is a need-based category in India, with few organised players. There are about 550 million people who need eye correction or lenses, while only 170-180 million are served, and that too largely by the unorganised sector with quality not up to the mark. This year, we have opened 250 stores and are targeting opening 2,000 stores by the end of FY23 from about 830 as of September-end. We may miss the target by a whisker.
You were expecting Taneira to emerge as a large driver in the next five years. This is a Rs 50,000-crore category and along with ethnic wear, it becomes a Rs 1-trillion category. This is also an unorganised sector, and we have a great task to create awareness. We have about 32 stores in 15 cities and plan to set up about 50 stores in 50 cities by FY23-end. We think what Tanishq did to the jewellery industry, Taneira has the potential to do to the saree and ethnic wear industry.