Watch industry’s ‘Titan’ calls it a day

When Bhaskar Bhat, Managing Director of Titan Company Ltd, retires on September 30, he will leave behind a rich legacy built over the last three decades. His successor CK Ventataraman will have great ‘expectations’ to meet and a big challenge ahead to lead the company into the next phase of growth.

Bhat was among the first to join Tata Watches, a new company set up by the Tata Group in 1983, to enter the watch business after it was opened by the government for the private sector. Till then, two public sector companies - HMT and Alwyn - were selling watches. “It was not easy to enter any business those days. Moreover, HMT was doing great with its iconic mechanical watches like Pilot, Janatha, Kiran and Sona among others. We decided to introduce Quartz watches and achieved success,” Bhat recalls.

Titan was started in 1984 as a joint venture between the Tata Group and Tamil Nadu Industrial Development Corporation (TIDCO). Tata Group holds 25% stake in the JV, while TN government has 28%. While it set up a watch factory in Hosur, it chose Bengaluru to set up the corporate office. “We had a choice between Chennai and Bengaluru. One reason why we opted for Bengaluru was the presence of HMT Watches, which had the best engineering minds in those days. It helped us to attract some of the best talents from HMT,” says Bhat adding that top four employees of HMT moved to Titan.

Soon, Titan became a hit because of Quartz watches and within a decade of its establishment, it overtook HMT to become the country’s top watchmaker. Today, it is the fifth-largest watch brand in the world.

“HMT was a great company with a focus only on mechanical watches. It did not introduce quartz watches for many years, even as the market accepted our watches,” Bhat recalls.

He remained with the company for 34 years and half of it as Managing Director. He succeeded Xerxes Desai in 2002 after his retirement. Bhat was not satisfied with only watches in the portfolio. Over the last three decades, the company diversified into a whole lot of lifestyle products that include jewellery, eyewear, bags, belts and many accessories, perfume under the Skinn brand besides saris, the latest product.

Today, Titan is more known for its jewellery under the Tanishq brand than the watches it makes.

It’s precision engineering subsidiary manufactures the finest aerospace components among many others. Titan is now the second most valuable company after TCS in the Tata Group with a market capitalisation of Rs 95,000 crore.

Since he took over the reins from Desai, Titan’s watch sales have grown 200% to 18 million units per annum from 6 million in 2002 and the turnover has increased from Rs 727 crore to Rs 19,779 crore by March 2019. Its net profit has increased from Rs 13 crore in 2002 to Rs 1,388 crore in FY19.

Ambitious targets

Every year, Titan Company meets in November to set the target for next year. Last year, it fixed a target of achieving Rs 53,000 crore turnover and 50 million customers by 2023, about 80% of which will come from its jewellery division, Tanishq, while the remaining will come from all other products including watches. Of the 50 million customers, it is aiming at 28 million from watches, 10 million from eyewear, 6 million fragrance, 3 million jewellery and balance from other products.

“We will expand wherever the opportunities are there. Already, we have diversified into many new product lines. We will expand our jewellery business in many small Tier-2 and Tier-3 cities. The brand lives in the heartland of India,” Bhat says.

Currently, the company operates 315 Tanishq stores across the country and by 2023, it will open another 400 stores. Of this, already 70-odd stores have been opened.

Tanishq will be the largest branded jewellery brand in the country. “It is not easy to replicate this model for anyone,” he claims.

Titan sells watches under different formats that include its own World of Titan showrooms, multi-brand outlets, local dealers and on online platforms like Amazon, Flipkart and its own website. It also sells some of the finest international brands such as Fossil, Tommy Hilfiger, Police, Kenneth Cole and Movado among others through its Helios outlets, which account for 60% of the market share.

Titan’s business is based on three main categories – own brands, licensed brands and other brands. It renews its collection of watches every five years.

Many firsts in the industry

During 32 years, Titan has introduced many new innovations in the watch business such as the slimmest watch in the world under ‘Edge’ brand, 18k gold watch under ‘Nebula’, Swiss watch under ‘Xylys’ brand. It also launched a watch using fibre under SF brand. It created watches specifically for women under ‘Raga’ and kids watches under ‘Zoop’, while its watches for youth came under ‘Fastrack’. It also sells a wide range of accessories under the same brand.

Its jewellery brand Tanishq is today the country’s largest brand and contributes over 80% of the company’s annual turnover. Its saree brand Taneira has already become a craze among women. It is now set to expand the network by adding 14 new outlets to its existing network of five outlets. Among the new products planned, Titan is set to launch a wall clock shortly. It is also planning to expand its wearables category by launching more smartwatches. The precision engineering division is now a Rs 500 crore entity and is set for rapid expansion, adds Bhat.

End of an era

Bhaskar Bhat is not alone who is retiring from the company. In the next few months, seven other senior executives including Ravi Kant, CEO, watches and accessories division are retiring. But the company has set in place a succession plan for all the positions.

When asked, what he would miss the most after leaving the company, Bhat said “The people”. Over the last few days, he has been touring across to meet his colleagues, dealers to cherish the memories he has built over the last three decades. Even as he retires as MD of Titan, Bhat will continue to be associated with the Tata Group as director on Tata Sons.