Sep 13, 2008
Business - Swatch plans joint venture for Indian market
The Swatch group, the world’s largest watch company with annual revenues of $ 6 billion, is now seriously eyeing the Indian subcontinent as a good market to expand.In an exclusive interview to The Hindu Business Line, Mr Nicholas G Hayek Senior, founder and Chairman of the Swatch Group, said that the group has decided to build a dedicated distribution network in the Indian market and the first step towards that has been the finalisation of a joint venture with an Indian company. While the identity of the chosen partner was not disclosed, the agreement is to set up 100 dedicated Swatch outlets in India.With Indians getting on par with the Western world when it comes to sporting trendy luxury watches, India was the market being talked about during the 25th anniversary celebrations of the Swatch Group at Bregenz in Austria, where its ‘007’ series of 22 watches was unveiled, each modelled and named after 22 villains featured in various James Bond movies over the years. In an interview to this correspondent, Mr Hayek spelt out his vision for India by stating that he would like to see a Swatch watch on the hand of every fifth Indian and to achieve a revenue of one billion Swiss Francs (about $ 900 million) in India, both in the span of the next ten years. Market sources estimate that the group’s current turnover in India would be in the region of about $ 75 million (Rs 300 crore). The responsibility for growing the Indian market has been vested with Mr Hayek’s daughter, Ms Nayla Hayek.While in India the Swatch brands already sell more than all other foreign brands put together, its plans will put it in direct confrontation with the Indian watch major Titan Industries, which today is more than four times the size of the Swiss major in the Indian market. The biggest challenge for Swatch, however, is to replicate the huge distribution network Titan has built for itself. While Swatch today has only about seven exclusive outlets in India, Titan sells its watches across several hundred exclusive and multi-brand outlets. Swatch watches world over are usually bracketed in the low-price category. In India, however, the equations change. A Swatch watch which sells in India typically in the range Rs 3,000 to Rs 5,000 would be considered expensive and not mass market. Thus Swatch’s strategy would hinge on positioning the brand, garnering volumes through the Swatch brand primarily while earning the revenues through its other luxury brands such as Breguet, Omega, Rado, Longines, Tissot and the several more it has in its portfolio. Apart from owning the top-notch brands, the Swatch Group is also the world’s largest manufacturer of quartz and mechanical movements which is used by most of Swatch’s competitors.