Swiss watchmaker Tag Heuer expects India to enter the company's list of top 5 markets by 2020. Tag Heuer, which offers a portfolio of premium watches whose prices range from Rs. 1 lakh to Rs. 1.7 crore, has found many takers in the market popular for "price sensitive consumers." Jean-Christophe
Babin, president and CEO, Tag Heuer, who is also known as "the Timekeeper" spoke to HT on the firm's growth strategy. Excerpts:
How has business been in the last one or two years?
Our sales growth in 2012 stood at 7.8% against our global average of more than 10% due to slowdown. We expect to return to a double-digit growth rate this year. We have great plans in store for India, and we expect to see India in the list of top 5 markets globally by 2020.
What is your growth strategy for the country?
India is a very important market and we plan to add four more boutiques, soon. At present, we have six exclusive boutiques. We will invest atleast 30% more than last year. The company expects to sell three-four times more in five-ten years. This would require adapting our product offerings to Indian tastes, - more ladies products, more steel and gold products. We are aiming to be in at least 30 cities in India.
Are your returns on investment good enough to support operations here?
At present, return on investments is not our priority. We entered the country a decade ago and are close to reaching the break-even point. The business here is not much profitable as duties on import and infrastructure hurdles squeeze margins. However, the market for luxury is still growing.
So what is your current focus - driving profits or building image?
Building image is the only priority. We are spending four-fold against our sales in the country. Yearly, Tag spends atleast 40% of sales on building image against the global average of 10-15%.
Indian buyers are price sensitive. Are they?
Not at all. India is breeding millionaires, which is the target segment. We have survived in the country by selling premium watches, costing Rs. 3 lakh on an average - it means there are lots of buyers. Moreover, the response to our limited collection segment is also exemplary.