Japanese watchmaker Citizen has said it will stop selling low-end timepieces in India and instead concentrate on the premium segment.
The company has also decided to move out of its larger 1,000 sq ft outlets to smaller outlets having 300-400 sq ft area in Tier III cities.
Sandeep Hegde, manager commercial and finance, Citizen Watches India, said, ?Due to high rentals and lower clientele in some of Tier III franchisee outlets, we plan to shift to smaller format stores.?
The company, which entered the country in 1998, had initially sought to make a big splash with its low-end quartz watches, which were priced in the range of Rs 3,000 to Rs 6,000.
Citizen has 13 outlets in Tier III cities such as Coimbatore, Baroda, Durgapur and Indore. The company has been facing a pressure on its margins in India. Its revenues increased only 5% in 2007-08 to Rs 85 crore against the targeted 20%.
However, the premium segment, estimated to be around Rs 200 crore in India, grew 12% in value and 19% in volume. The company has a growth target of 20% for the current year.
Citizen, therefore, plans to launch a slew of mid- and high-end models priced between Rs 7000 and Rs 65,000 by September. It currently sells some high-end models priced at around Rs 1.5 lakh. The low-end watches will be completely phased out by 2010.
Citizen will also aggressively push its sports and informal brands such as Campanola, Promaster and Eco Drive.
The company has earmarked Rs 7 crore for advertising and marketing in the current year.
The international watch brand, which resorted to some high decibel marketing exercises with ambassadors Kareena Kapoor and Rahul Dravid between 2006 and 2008, has now decided that it does not need any more celebrities to push its brand in India.
?While 2006 and 2007 were the peak for Citizen in India, we cannot attribute the whole success to the Kareena-Dravid duo,? Sandeep Hegde, manager commercial and finance, said.
Moreover, the company has a limited budget that cannot be frittered away on celebrities, he said.
7 months ago