The fashion accessories market in India is undergoing a metamorphosis with the entry of global brands. From a mere necessity, watches and eyewear have come a long way to be perceived as status symbols, thanks to the growing affluence of urban consumers. N
As per research reports, the global watch market is worth $ 26.5 billion dollars, with Swiss majors and China exhibiting significant growth of 9 per cent and 7 per cent, respectively. In sharp contrast, the Japanese players are stuck in a period of stagnation.
Building a brand image in the market is a gigantic task. In the fashion accessories market, watches have emerged as one of the organised segments. It has come as a surprise that until now, most of the watch industry was unorganised. With the entrance of organised players, the industry is now converting itself into a distinguished market. In India, Titan, Timex, Maxima Watches, Gitanjali, The Rose Group, and Citizen Watches are the branded players, which are serving the brand-conscious shoppers in a well-organised way by employing newest technology, novel designs and giving a tough competition to the non-branded watch manufacturers who sell watches at affordable prices. In India, Titan is recognised as the biggest player in watches, jewellery and eyewear segment with maximum share in the organised market.
Seeing the growth of the watch market in India, Swiss watch labels, too, are establishing their foothold in the country. Swatch Group, Watch IT, Ulysse Nardin from Swiss promotion, Technomarine from Ganga Watches Pvt Ltd, Ethos, Tag Heuer, Omega, Antonio Bernini, Tissot, Corum, Xylys, Brequet, Russia’s Soyuz, DKNY, Raymond Weil, Rolex, Hublot, Chopard, Rado, Longines, Milleret, Pierre Cardin Swiss, Seiko, Kenneth Cole, Cerruti, Versus, Gucci, Armani, Edox Watches, Armaan Swiss Diamond Watches, Baume & Mercier, Van Cleef & Arpels, Montblanc, Piaget, Chopard, Dunhill, Girard-Perregaux and JeanRichard. Ind India are some of the Swiss brands which are retailed through different retail distribution channels, such as exclusive, standalone, flagship stores and multi-brand outlets.
Today, the young consumers with deep pockets are keen to spend money on international premium and high-end luxury watch labels.
Keep An Eye on Eyewear
If industry experts are to be believed, the global eyewear market will rebound by 2010 to grow at a CAGR of 1.4 per cent to exceed $68 billion by 2013. A full return to normalised annual growth rates of 3-6 per cent are likely to be achieved during the latter half of 2008-2013 period. As of now, the eyewear industry is broadly separated into three categories, sunglasses/frames, vision care and others surgical/healthcare. To serve all the three segments, organised players such as Titan Eye+, Fastrack, Rayban, Bausch & Lomb, Himalaya Optical Pvt Ltd, Johnson & Johnson and Colorsoft are present in the metropolitan cities to cater to every strata of society. They are also looking to venture into Tier-II and Tier III cities.
The last four years have seen a considerable rise in the international labels. In 2008, Sunglass Hut owned by Italian firm Luxottica ventured into the Indian market through a franchise agreement with realty major DLF’s retail management arm DLF Brands. At present, the chain has four outlets. The company is looking to add 30 outlets by end of 2012.
Another leading British eyewear company, Inspecs, partnered with Aureole in India to bring the best of branded eyewear in the country. In the eyewear category, Aureole Inspecs India Private Ltd is the exclusive licencee for six brands, FCUK, French Connection, Nicole Farhi, Austin Reed, CAT, Speedo, Vision by Conran and Nascar. Vision Express, which is a joint venture between Reliance Retail and Dutch optical retailer Pearle Europe, has plans to open 500 eyewear outlets across the country by 2015.
Italian companies like Safilo Group and US-based Viva International Group are likely to penetrate in the emerging markets of Asia.
Kodak, the world famous camera manufacturer, also marked its launch into the branded spectacle market with its newly designed eyewear.
Recently, MTV also made entry into the lifestyle segment with the launch of 'MTV' and 'Roadies' eyewear. For this, MTV has entered into a three-year licensing agreement with Aureole Inspecs. While the sunglasses will be available soon, the spectacles' range will be launched in the first quarter of 2010. Titan Eye + too is aiming to add 20 more outlets by March 2010, besides launching more ranges of eyewear collection.
Getting organised
The watch and eyewear industry is still fragmented, as a large number of the existing players are unorganised, who assemble cheap quality products and retail at economical prices.
According to experts, the unorganised market exists in parallel in India. Almost 70 per cent of the sales happen in the unorganised market because of the easy availability of accessories at reasonable costs.
Talking of its brands in India, Manjot Purewal, MD, Maxima Watches, says, “Through Maxima, we cater to the mass market, which is value-for-money consumer. We don’t differentiate between groups or other profiles. We recently launched a new brand called Ssteel, which is youth-oriented. It primarily has watches with designs for 18-21 years old.”
Maxima is starting a number of kiosks in malls, which will be owned by the company itself.
The youth market is targeted by not only domestic labels but international ones too. They excessively come up with contemporary designs to reach the mass market to a larger extent.
Internationally, the watch and eyewear market is segmented by two major price segments, premium and value. The premium segment is growing rapidly as compared to the value segment.
Timely brand building
With the accessibility of branded products, the consumer’s penchant for them has been spurred by strong marketing and promotional campaigns. Tough competition is foreseen with many international brands penetrating the segment.
Jean-Claude Biver, CEO, Hublot Biver, feels, “There is no competition as far as Hublot is concerned. We focus our energies on advertising, right presentation of the brand in retail environment and great experience through events.”
As the competition becomes intense in different domains and verticals of organised retailing, the companies have started looking for new retail formats to increase footfalls and maximise profits. Exclusive stores, multi-brand outlets, shop-in-shop concept and a kiosk formats not only reach the consumers but target the interested franchisees as well. Going in for shop-in-shop concept is more profitable than going in for an exclusive outlet. In a shop-in-shop concept, the franchisee can own at least four-five brands in one outlet whereas in an exclusive store, the franchisee is left with no choice but to display only one brand.
Purewal is in favour of giving the franchise of a shop-in-shop concept rather than an exclusive store.
Selecting the right location for opening a store is necessary for the brand extension in the market. Opening a store in a high footfall area is considered lucrative. The perfect location for opening an eyewear or a time-wear brand outlet is preferably a high street, hotels and shopping complexes.
Simeran Bhasin, Marketing Head, Fastrack and New Brands, states, “The most important criteria for opening an exclusive fastrack store is the potential to tap youth in that area. Youth-dominated markets would be ideal for a brand like fastrack. Proximity to schools/colleges, hangout places, popular cafe's and cinema are some of the other considerations.”
The company also helps its franchisees in not only selecting the right location but also in negotiating rentals, other terms and conditions and even closing the agreements with the landlords.
Eying appealing visuals
The store visuals can easily attract the consumer’s attention at one glance. Keeping this in view; the companies come up with best designs and create superior ambience to bring in footfalls in the stores.
Biver feels, “Visual merchandising is very important for Hublot. We try and keep it refreshed as much as possible. Usually, it is once a month but updating and decoration happen on a daily basis.” On the other side, Bhasin adds, “We believe visual merchandising is critical for a retail store – the impact that visual merchandising can create begins with the overall store design and the display mechanism within the store. We worked closely with Michael Foley of Foley Designs to bring the brand’s personality alive with an off-beat display that allows consumers to touch and feel every product category.”
To reach the consumers in an organised way, companies have started giving a lot of significance to the visual merchandising of the store, ambience, employing design firms to work on flooring, lighting, different shades and colours to bring in footfalls and ensure instant sales.
Intensifying retail presence
Hublot is a global luxury watch brand and it has been one of the fastest growing brands amongst Swiss Watches.
Talking of its presence in India, Jean- Biver informs, “We have 10 point of sales across India in five metros. Kapoor Watch Company and Zimsons are two of the main retail partners. We have been present in India since October 2006. We have always been looking for strengthening our presence here in India. It is not a joint venture but a simple brand distribution – retail alliance.”
He says he wish to see a growth of 50 per cent in 2009.
“We can consider opening five exclusive boutiques by 2015. But right now, we shall stick with our existing retail partners,” adds Biver.
While discussing on the business models, Bhasin informs, “We have two business models for Fastrack stores: company owned stores and franchisee stores. Ninety per cent of our stores are run on the franchise model. We have clear retail identity and operating guidelines that cover display and store maintenance to staff. All specifications have been shared with the franchisee and these are reviewed frequently to ensure uniformity.”
Nilesh Patel of Soyuz says, “At present, we have one franchise outlet. In 2010, we plan to open 20 stores. We are also looking to expand our presence in Ahmedabad, Amritsar, Baroda, Banglore, Chandigarh, Chennai, Coimbatore, Dehradoon, Hyderabad, Jaipur, Kolkata, Lucknow, Ludhiana, Mumbai, NCR, Pune and Vizag.”
At present, Fastrack has 11 franchisees. Talking of its expansion plans, Bhasin reports, “By 2010, we will be opening 50 stores, wherein four would be company owned while rest of them will be franchised. For opening the store, the franchisee would require an area of 500-700 sq ft, which will entail an investment of Rs 35-50 lakh.”
The company would be targeting top 20 towns in the country.
Organised players are exploring franchising model to grow vigorously in every nook and cranny of the country through diverse retail formats.
The sector is likely to witness immense growth with the presence of global brands, coupled with rapidly growing disposable income levels of middle class, and the demand for high-quality premium fashion accessories.
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