There was a time when clothes made a man. Not anymore. Today, accessories like timepieces go a long way in announcing that one has arrived, and in style.
The market for luxury market in India has been witnessing a gradual growth. Currently, it stands on the 12 position for Omega in terms of global sales, according to Jean-Claude Monachon, VP of Omega and head of product and customer service. He recently told a financial daily, “Since the sales growth has been higher than global percentage last year, India may jump to 11th or 10th rank by 2019-end.” Coming from a renowned brand, this emphasizes the market potential for luxury watches in India through the organized channel.
Swiss watches have the lead in the market, followed by German and Japanese watchmakers. Gaurav Mehta, founder of Jaipur Watch Co noted, “The Indian luxury watch market has been heavily dominated by Swiss brands. The Indian watch market is valued at INR 10,000 crore, with global brands contributing 20%.”
Anil Prabhakar, a marketing consultant, who was part of the team that launched Rado watches in the country, added, “The luxury watches market is estimated to be around INR 600 crore to INR 700 crore. After two sluggish years, it registered a 20% growth in 2018, and this momentum is expected to continue this year as well.”
Brands like Breguet, Omega, Rado and Longines from the Swatch stable have made strong inroads in India, while Rolex, as well as Hublot and Tag Heuer from the LVMH group, have crafted their own niches. Prabhakar attributed the success of Swatch’s group brands and Rolex to their commitment to the country and shared, “They are here for the long-term and have created an impressive distribution network and brand equity by advertising and promotions.”
MOVING WITH TIME
The parallel market for luxury watches is the biggest bane for the legitimate sellers. Companies like Johnson Watch Co., Ethos, Just in Time, etc. have been making various efforts to get customers to shift to the organized channel, which they believe is gaining momentum.
Anil Madan, director of Johnson Watch Co, which was established in 1950, said, “Our brand portfolio includes over 25 luxury brands including Chopard, Bvlgari, Hublot, UlysseNardin, Girard Perregaux, Breitling, Omega, Longines, Rado, Tag Heuer and Mont Blanc. Besides our multi-brand stores, we also have exclusive brand boutique stores so customers can reach us with ease.”
One reason why luxury watches are seeing more sales impetus in India is because of the availability of more brands. Prabhakar said, “The reduction of import duty and the introduction of GST have made life easier for most brands as the prices in India are at par, or at times cheaper than those, with countries like Hong Kong, Singapore and the UAE,” he added.
Customers are also opting for bespoke watches. However, lack of quality infrastructure is a challenge for domestic watch makers.
Talking about it, Mehta revealed, “Creating each bespoke watch means combining multiple steps or parts. There is a lack of ancillary industries offering components for fine watches. Moreover, since our product is unique, it requires limited quantity, but superior quality of parts. Sourcing them is an issue, thus we end up developing most of the products in-house.”
Luxury watches often do not have a long shelf-to-sale period and get sold usually even before retailers receive the piece. Prabhakar said that fast moving models sell out within 30 days. “The emergence of national chain stores such as Ethos and Helios manage their inventory efficiently by moving their stocks across retail outlets,” he added. Other retailers like Johnson Watch Co try to reduce the shelf-to-sale period through aggressive marketing efforts, which encompasses digital and print.
Does this mean ecommerce is a good sales avenue for luxury watches? Retailers are doubtful. Prabhakar explained, “It has a good potential but will take a few years to catch on because most luxury brands have invested in an offline network. Not to mention, that there a trust deficit amongst buyers about whether the watch they are buying online is genuine.”
Luxury watch shoppers are looking at purchasing a commodity – they want to own a premium timepiece and feel pampered during the buying journey. It is difficult to replicate this luxury experience in an online environment
Hence, luxury watch retailers do much more than just ‘sell’. From hosting a private preview at upscale restaurants to offering home service, they ensure they connect with customers and show that they care.
Cover image courtesy: Hugo Filipe from Pexels