Geneva Issue TIME AND PLACE Watches that help switch quickly between time zones gain popularity >P4
PORTABLE MASTERPIECES Some of this year’s most breathtaking pieces were merely works of art >P5
BEST OF SIHH From the dozens of watches on display, we pick the ones that impressed us >P67
INTERVIEW Titan Industries’ Harish Bhat on India’s potential in the global watch business >P10
New Delhi, Mumbai, Bangalore, Kolkata, Chennai, Ahmedabad, Hyderabad, Chandigarh*, Pune*
Back to the future After an economic slump and then a fasterthan expected revival, watchmakers start 2011 with cautious optimism and minimal collections BY SIDIN VADUKUT sidin.v@livemint.com
···························· he year’s first major watch industry event opened with none of the gloom of the past couple of years. In 2010, watchmakers were yet to come to terms with economic realities. Business had bounced back. But were things back for good? Or was this the lull before the second crash of a double dip? The night before Salon International de la Haute Horlogerie (SIHH) 2011 opened in Geneva, Hublot supremo J.C. Biver told a packed house at at local hotel ballroom that 2010 had been spectacular. But 2011 would be even tougher. “Be prepared for
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APRILMAY 2011 anything this year,” he boomed at a half-amused audience. This nervousness in the watch industry was reflected in some clear trends that stood out at SIHH. Classic and heritage designs were a trend that first appeared last year. This year, brands have adopted it with greater commitment. Most brands have pieces that hark back to previous collections. Cases are smaller, dials cleaner, and there was hardly an oversized piece to be found anywhere. Much of this is not only a reflection of economic sobriety, but also, more importantly, indicative of a large swing in the world watch market. Brands are looking to China and Hong Kong for revival. Therefore, new collections this year at Geneva, and later in Basel, reflected this trend. Not only were watches smaller and more elegant to cater to Asian tastes, but there was an abundance of pieces in rose and red gold, and bimetallic steel and gold combinations. For many brands, price points have also dropped somewhat. Brands have used the minimal/ classic/heritage trend to add entry-level models that can widen customer bases. Thankfully, this has not come at the cost of quality.
IWC’s new Portofino collection is both contemporary yet unmistakeably IWC. Baume & Mercier has taken a new leap of faith with a comprehensive brand overhaul and communication strategy—perhaps the biggest experiment at Geneva, in what is otherwise a tentative year for innovations. Other trends include a number of World Timer and GMT watches, more unisex pieces, and greater restraint in colours and branding. For watch connoisseurs, it is a year to enrich collections with tributes and heritage designs. Not a time for new things, but old things done well. This MintWatch—Geneva Issue will be the first of a series of special reports this year that will focus on the international watch business. Targeted at both connoisseurs and newbies, the reports will cover the two major watch fairs—Geneva and Basel—and other major launches year-round. We will look at trends, opinions and numbers. Some of the leading voices in the watch business will talk to us about movements and watches and strategy. But most of all, we will showcase some of the best timepieces to be launched this year. We hope it is worth your time.
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SIHH at a glance Who? When? How many? A snapshot of Salon International de la Haute Horlogerie (SIHH) 2011 in the form of numbers, statistics and trends
Edition
Number of brands
21st
19
Distributors and retailers:
Number of brands which took part in first show in 1991
5
(Baume & Mercier, Cartier, Piaget, Gerald Genta, Daniel Roth)
Total number of visitors
60% 20% 12% 8% 12,000 Europe
Asia
Americas
Middle East
Journalists
1,000
Number of days
Total exhibition floor space
5
30,000
Points of sale represented
1,500
sq. m
Number of pieces from private collection exhibited by Cartier
300
Approx
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Top
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Heritage and classic models: These timepieces include new classic models and revivals of old classic design from the brand ar chives. Art Deco designs are very popular.
2
Rose gold and bimetallic combi nations: Largely catering to Asian tastes, several brands had pieces in red or rose gold, and combina tions of steel and gold for both cases and bracelets.
3
GMT and World Timers: Several brands looked to maintain de mand for new complicated move ments, without inflating case size, by going for clean GMT or World Timer pieces. Customers have a number of superb pieces to choose from, including stunners from Vacheron and Cartier.
4
Inhouse movements: Montblanc has a beautiful new Nicholas Rieussec piece this year that con tains a Montblanc MB R110 hand wound calibre. Similarly, other brands are making efforts to high light, where possible, inhouse movements.
5
Artistic pieces: Besides design, technology and materials, a hand ful of brands are also producing watches that are more works of art than timepieces. In particular, several models sported exquisite enamel and guilloche work on the dials.
Signs of the times A whirlwind tour of some of the key trends that emerged at SIHH this year
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here was a sense of considerable relief, and some surprise, in Geneva this year at the speed at which the world watch business has bounced back since the doldrums of 2009 and 2010. In March, data for 2010 showed that Swiss watch exports for the year had jumped by 22.1%, hitting a total value of 16.2 billion Swiss franc (CHF). This is just a shade below the all-time high of CHF 17 billion, achieved in 2008. All indications are that business in 2011 will be even better.
However, most brands have changed the way they do business. Over the previous two years, brands responded to the slowdown by streamlining production, reducing manpower and weeding out underperforming retail points. To the external world, however, this change is most visible in the form of timepieces. Several chief executives and product managers told Mint that “bling-bling is finally gone for good”. This is not only because ostentatious watches seem incongruent at a time of economic trouble, but also because shots are now being called by the great markets of the East. China likes small, simple and classic. Asia accounted for 53% of Swiss watch exports in 2010. And for the first two months of 2011, while
SIHH was going on, Hong Kong and China together imported watches worth CHF 700 million. The US on the other hand, imported only one-third as much. Financial restraints are also reflected in the philosophy behind this year’s novelties. Only a handful of brands have gone for revolutionary products or product launches. Roger Dubuis was one of them. Their La Monegasque range is a refreshing new collection with a strong “casino player” theme, compact design and busy but classic dials. Baume & Mercier has gone in for a complete brand overhaul incorporating a new “Seaside Living” theme for both the men’s and women’s range. While it is a relaxed, casual theme that stood out from the other marquees, it is also a big, risky move.
Baume has gone in for a renovation of the brand when most other companies are looking to connect even more strongly with their pasts. Jaeger-LeCoultre, for instance, showcased the classic Reverso design at the fair. The brand had a slew of new pieces to celebrate the 80th anniversary of the iconic reversible case model. Most brands have looked to rationalize the number of references in their collections. To this extent most of the new pieces seen this year were extensions of existing lines with minor modifications.
trends of SIHH 2011 in summary were:
The MintWatch—Geneva Issue will look at some of these trends in detail along with timepieces that highlight these elements.
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Time and Place Now that simplicity and classic lines are in vogue, what happens to complications? The answer lies in a range of beautiful GMT and World Time pieces
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erhaps the most popular complications this year at the Salon International de la Haute Horlogerie (SIHH), and subsequently at BaselWorld, were watches with world time, dual time and GMT functions. Geneva saw several brands present an array of watches that help the wearer switch quickly between time zones, or keep track of multiple time zones on the same face. The concept itself is by no means new to watch aficionados. Watches that display multiple time zones are available in all shapes, sizes and price points from rugged Casio GShock timepieces to Patek Philippe’s classic Platinum World Time. There were several classic executions of these movements. But this year, there was also a number of unique movements and innovative displays. None more so than Vacheron Constantin’s Patrimony Traditionelle World Time. (The watch is one of our picks for best watch from SIHH this year.) This year’s World Time has a new 2460WT in-house selfwinding calibre that is distinguished by a remarkable new single-crown adjustment mechanism. The wearer can jump from one time zone to another with just a simple twist of the crown. Usually, such quick-adjust watches come with the ability to jump time zones with intervals of an hour. This year, Vacheron has gone one better by also incorporating half and quarter time zones. This is perhaps the first time partial time zones have been incorporated into a production watch. Both India and Nepal, therefore, find themselves on
the dial of a World Time complication on this rare occasion. Cartier had several stand-out pieces in their collection this year, including a new Ballon Bleu, and a superb new Calibre De Cartier Multiple Time Zone watch. Driven by a Calibre 9909 movement, the watch combines a sophisticated series of indicators into a simple, easy to read and use device. The watch has a central home time indicator and the main hours and minutes hands are adjusted using a push button. Below the home time dial, at the six o’clock position, a retrograde indicator shows time difference. The only element missing is the place indicator that most watches build into the dial. Cartier brilliantly frees up dial real estate by moving this to the side of the case in the nine o’clock position through a small window. When the wearer lands in a foreign country, all he has to do is click the button till the watch jumps the requisite hours. Audemars Piguet, renowned for the Royal Oak collections, has chosen this year to present a dual time watch in its more classical Jules Audemars range. The 2011 Jules Audemars Dual Time is a classic, no-frills timepiece with clean elegant lines, a superbly laid out dial and sharp legibility. Besides the two hands of the main watch, the dial incorporates a date dial, a second time zone, a day/night display and a power reserve. That might sounds too much for a modest 41mm case. But Audemars Piguet pulls it off effortlessly.
Other brands with a more traditional approach to world and dual time watches included IWC and Montblanc. IWC has a simple new dual time in the newly rejigged Portofino collection. Montblanc’s Star World Time is a great combination of good looks and ease of use. Once again, this is operated with a single crown and has a ring of city names around the dial that moved. Additionally, the small GMT marker in the centre has been well designed for legibility. All these elements come together to form a rather attractive timepiece. Other brands with GMT indicators and Dual Times were A Lange & Sohne and Panerai. If the showing at Geneva and Basel is anything to go by, this trend of GMT, dual and world time watches will persist. Especially where brands have executed them within classic and minimal case and dial designs. From a consumer perspective, this is perhaps indicative of a more global clientele and a more widespread market. GMT and World Time products are versatile enough to work in multiple markets, and they offer a certain level of geographic personalization. Also, these are complications that adhere to the current trend of compact, minimal timepieces. Therefore, they are attractive to buyers, who seek complications at a fair price, and manufacturers who don’t want to entirely give up the premiums for complicated pieces. As long as the watches are as good looking and wearable, as the ones at Geneva this year, the trend is a welcome one.
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Portable masterpieces If you thought highend watchmaking was all about mindboggling complications, think again. Some of this year’s most breathtaking pieces were merely works of art
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his year’s Cartier Santos 100 Hummingbird watch, which is part of the art collection, does not have a tourbillon in it. Nor a minuterepeater. It does not even have a chronograph. It is a simple twohand watch, powered by a Cartier Calibre 076 movement. Yet, the watch is a masterpiece of workmanship. Worked into the dial, and overlapping onto the bezel and case, is a beautiful red hummingbird motif showing the bird drinking nectar out of a flower. The eyecatching design is constructed out of 10 pieces of mother-ofpearl, nine colours of enamel and 20 pink sapphires. The case itself is constructed out of rhodium plated 18-karat white gold set with 216 diamonds. On paper, all that bling sounds like an explosion of tastlessness. But, in fact, the watch is a superb piece. And, at the Salon International de la Haute Horlogerie (SIHH) this year, that was one of a handful of timepieces on show that highlighted not just the work of the watchmaker, but also that of the jewellers and craftsmen. Instead of movement, these watches flaunted exquisite workmanship in an array of art and craft forms. Vacheron Constantin displayed the first of a new collection called Métiers d’Art—Chagall & L’Opéra de Paris. Each watch in the collection is based on the ceiling of the Opera Garnier in Paris that was painted by Marc Chagall in 1964. Vacheron
intends to bring out a series of 15 one-of-a-kind that depicts the ceiling in enamel work. The first one, called a Tribute To Famous Composers, was unveiled in November and displayed at Geneva to wide acclaim. The piece depicts a complete view of the ceiling on the surface of the dial using grand feu enamel technique. Jules Verne was the flavour of Van Cleef And Arpels’ collection this year with a special collection of four timepieces called Midnight Les 4 Voyages Extraordinaires. Each piece is a tribute to one of Jules Verne’s sciencefiction books: Journey to the Center of the Earth, 20,000 Leagues Under The Sea, From the Earth to the Moon and Five
Weeks In A Baloon. Each piece is a work of sculpture, enamel and engraving. The enamel, constructed in several layers to achieve a translucent effect, is laid on top of thin gold or silver sheets. Van Cleef presents the collection in an exclusive box with four portholes displaying the face of each watch. There were also enamel dials from Jaeger Le Coultre and some exquisite jewellery pieces from Piaget’s new Limelight Garden Party collection. So, while complications and engineering tends to steal the show at fairs such as SIHH, there were also some exceptional timepieces that focused purely on craftsmanship.
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Roger Dubuis
Best of S
CHRONOGRAPH LA MONEGASQUE
From the dozens of watches that were displayed pick the ones that impressed us with design, co
Baume & Mercier CAPELAND CHRONOGRAPH FLYBACK
GirardPerregaux 1966 SMALL SECONDS
A Lange & Söhne ZEITWERK STRIKING TIME
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of SIHH
at were displayed and unveiled at SIHH 2011, we us with design, complexity and sophistication
Jaeger足LeCoultre GRANDE REVERSO LADY ULTRA THIN
Cartier CALIBRE DE CARTIER ASTROTOURBILLON
IWC PORTOFINO HAND足WOUND EIGHT DAYS
Audemars Piguet MILLENARY MINUTE REPEATER
Vacheron Constantin PATRIMONY TRADITIONELLE WORLD TIME
Van Cleef & Arpels LES VOYAGES, FIVE WEEKS IN A BALLOON
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A Catalogue of Complication ULT
RA T
HIN
Each year, brands at Geneva use at least one model each to encapsulate their skill in watchmaking. But what makes these flagship models special? What is it in their design, craftsmanship and complexity, that make them stand apart? This is Mint’s catalogue of complication: a speed guide to five flagship models and their special mechanical and aesthetic elements
Piaget EMPERADOR COUSSIN
E L
E
ANTIGRAVITY
S
M
NG FLYI RBILLON TOU
T
E
N
N E
T M
S
E
L
E
DOUBLE NTIAL DIFFERE
S ND TO CO D OR SE UPLE ROT CO CRO MI
DIAL MICR SIDE ORO TOR
NIO ALL BIUM OY T CAS ITANIU E M
Cartier ROTONDE DE CARTIER ASTROREGULATEUR
MO NOP US
HER
E
L
E
GUILLOCHE
M
Montblanc
E
N
NICOLAS RIEUSSEC CHRONOGRAPH ANNIVERSARY EDITION EEL
T
H NW M U L
S
ICK TH
E
T
S
8.7
N
0M
M
E
L
M
E
E
L
E
M
S M IU TE AN LA TIT SEP BA
V ESCAPE ISIBLE MENT
VER TIC
E
CAS
AL
CLU T
CH
NIUM TITA
TE NU ER MI EAT P RE
E
N
T
SKELETONIZED HANDS
CO
BAL
BLE DOU ING SPR ANCE
Audemars Piguet MILLENARY MINUTE REPEATER
Richard Mille EXTRA FLAT TOURBILLON
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Chronomotors With a common affinity for precise engineering and accuracy, racing and timekeeping share many similarities. Collaborations between brands, such as Bugatti and ParmigianiFleurier, often produce splendid watches
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omparisons between the mechanisms that run watches, and the engines that power cars are frequent and entirely justified. From a technological perspective, both involve engineering, design and manufacturing principals that are both traditional and innovative. Car makers constantly seek to make their engines faster, lighter and more reliable. In much the same way, watchmakers constantly experiment with materials and movements. These similarities extend to the branding and marketing of these products as well. “There are so many brand similarities. There are so many elements of how these products are made, bought and experienced that make good watches and good cars so similar,” said Jean-Marc Jacot, chief executive of Parmi-
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giani-Fleurier. One of Parmigiani’s highlights at the SIHH this year was the Bugatti Super Sport watch unveiled in late 2010. In an industry still somewhat chaffing from the economic slump, the Super Sport was one of the bolder racing-themed co-branded watches to be presented at Geneva. The watch, modelled around Bugatti’s iconic Veyron 16.4 Super Sport car, incorporates haute horology with an inspired design, and is available in a limited edition of 30 pieces. Over the years, the watch industry has seen several brands work with prominent auto mar-
quees to produce co-branded collections. Audemars Piguet and Maserati, Jaeger-LeCoultre and Aston Martin, Breitling for Bentley, and Tag Heuer for Mercedes are just some of the collaborations that have produced interesting timepieces. Among the many watch exhibitions that were held in Geneva in January, outside the main SIHH venue, was a comprehensive Tag Heuer pavilion that housed a variety of Formula racing cars and paraphernalia. The highlight at the pavilion was Tag’s new Carrera Mikrograph piece with a chronograph accurate to 1/100th of a second. However, given the industry’s
move towards smaller and slimmer watches, 2011 was not a year with many new collaborative products. While brands at the SIHH continue to flaunt their present and historical associations with racing teams and car brands, few committed to these associations with specific models or line extensions. But the indications from BaselWorld, held in March, were much more positive for
this segment. Brands such as Chopard, Blancpain and Breitling—all had pieces with strong automotive themes and connections. As the economic tides turn and brands go back to investing in designs and experiments, the future for many of these partnerships seem bright. Over the past half-a-decade or so, motor racing has grown in popularity in Asia. Seven out of
19 races in the 2011 F1 calendar will take place in Asia. Important new circuits include Abu Dhabi, Shanghai, Singapore, Yeongam and New Delhi. With many of these races located in important growing markets for the high-end watch industry, brands are bound to leverage on brand partnerships and racing-themed product lines. For connoisseurs of both cars and watches, and they are not few, things are looking bright. This year’s highlight in this segment, however, is the Parmigiani Super Sport. Parmigiani calls it the “fastest watch in the world”, because it was worn by driver Pierre-Henri Raphanel when he broke the world record for the fastest production car in a Bugatti Veyron Super Sport in 2010. Raphanel hit a top speed of a little over 431 kmph. In order to achieve its unique sports chassis contours, the watch has a time-setting system that is set at right angles to the dial. The dial itself is set perpendicular to the wrist and viewed through a side-window. The movement inside is a manually wound Parmigiani 372 calibre with 10 days power reserve. The dial is open-worked and made of carbon fibre, and is housed inside a case comprising six anti-reflective Sapphire crystals. And despite the watch’s unique layout, Parmigiani has still managed to incorporate the brand’s signature tear-drop lug design. Each limited edition piece is individually numbered on the back and costs $260,000 (around `1.15 crore).
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ubsequent to the launch of a white paper on the Indian Time Wear Industry earlier this year by the All India Federation of Horological Industries (AIFHI), Mint spoke to Harish Bhat, chief operating officer—watches, Titan Industries Ltd, and secretary general, AIFHI. Bhat spoke about a variety of topics including the large potential for India in the global watch business, China’s head-start and some compelling numbers. Edited excerpts: The white paper seems to focus on two issues: making the Indi an market easier to operate in, and leveraging India’s manufac turing abilities. Which one, to you, is the easily addressable one? Especially, in the light of the government’s slow progress on the taxation front. I think making the Indian market easier to operate in is the low-hanging fruit the industry can seize. A single measure such as the introduction of GST will make the market so much more navigable for organized players in wrist watches. In addition, rationalization of some duties (import and excise duties on high-value jewellery-like watches, far lower excise duties on economy watches) will also help expand this market greatly. Having said that, the opportunity for creating a global manufacturing hub in India for watches and watch components is huge. China enjoys this position today, but its competitive advantage is getting fast eroded. This will require watches to be given priority under the government’s manufacturing policy, infusion of new technology, also the creation of hubs where manufacturing and ancillary units can come up in close proximity to each other. It would appear that developing a watchmanufacturing base in India is something that the pri vate sector can immediately work on. Where do you see po tential here? Which element of the supply chain can India cater to quickly? Yes, quite correct. The private sector can certainly work on creating a watch-manufacturing base in India. In Titan, we have, over the past two decades, created such a manufacturing base for our own needs, with Hosur being the epicentre. This profitable model is certainly replicable by other players as well, who currently import their requirements from China and the Far East. I think manufacturing of watchcases and watch dials are two areas that can be quickly addressed in India. Other appearance parts and components, such as high-end leather bracelets, batteries and complex mechanical/automatic movements will require some more time, patience and technological collaboration. How mature is the Chinese watch industry? They have companies such as Tianjin Sea Gull which already have strong market shares. What should be the Indian strategy here? The Chinese watch industry is far larger than its Indian counterpart. Their manufacturing units (perhaps more than 500 in number), located in and around Shenzen, form a thriving base that exports watches around the world. These are primarily low-end and mid-end watches, a large proportion being fashion brands. Tianjin Sea-Gull is somewhat of an exception; it is one of two or three Chinese players who produce excellent mechanical and automatic move-
‘We will see a boom in highend watches over the next five years’ With a maturing economy, and growing sophistication among both buyers and sellers, the Indian luxury watch business is poised for an overdue boom
ments with several interesting complications including a unique double tourbillon, which I was very impressed with when I visited their unit two years ago, and spoke to their movement developers. One difference between how the Chinese and Indian markets have developed is the existence of large and powerful mainstream Indian brands such as Titan, Fastrack, Maxima, Sonata. China does not, to the best of my knowledge, have such large or monolithic brands that cut across the entire country. It is a far more fragmented market. What support could be forth coming from the government to help manufacturers? Establishment of hubs for watch manufacturing, with easy availability of land and infrastructure (particularly electrical power), fiscal benefits for the first few years to help seed the watch manufacturing industry, and perhaps tempt units to relocate here, articulating a vision of making India the global hub for nonSwiss watches manufacturing by 2025. Do you feel that the highend watch segment is unfairly tar geted here in terms of taxa tion? Visavis automotive, for instance. The high-end watches segment in India suffers from several handicaps. High import duties on high-value
watches are one such unfair barrier. At AIFHI, we have requested the government that high-value jewellery watches should be subjected to lower import duties, along the lines of jewellery. The absence of good premium retailing space for premium and luxury watches is yet another barrier. We have already seen the high end auto business take off in India. Do you think there is an impending boom in highend watches too? Yes, I am firmly convinced that we will see a boom in high-end watches over the next five years. The number of upper-middle class and upper class households in India is likely to quadruple over the next six years, and high-end fashion and luxury watches will, like other lifestyle accessories, hold great appeal to these consumers. I foresee the market for premium and luxury watches (i.e. watches priced above `10,000) growing fivefold between 2011 and 2016. We have seen this happen in China over the past decade, and it will soon happen in India too. Besides taxes, there is also the issue of supply chain and retail points. How sophisticated is the local distribution setup? How can we bring back home the purchasing dollars that are cur rently running away to Singa pore, Hong Kong and Dubai?
Premium and high-end watches are not just watches, they are delicious stories to be savoured, incredible feats of complex precision engineering to be lusted for and marvelled at. This can only happen if they are displayed and sold with the respect that they deserve. Permit me a brief analogy: I don’t think caviar and smoked salmon can be relished as they really should be, at small roadside food stalls— much as I love these wonderful stalls for their excellent cups of strong tea and hot pakodas to match. That’s the same for watches. In the white paper you mention how the weights and measures Act is a problem for watch re tailers. Can you explain how it affects your daytoday func tioning? Watches are not packaged commodities, and, therefore, should not be covered by such an Act at all in the first place— particularly the rules which deal with packaged goods. Consumers don’t buy watches in packed condition, unlike toothpaste or soap. They touch and feel the watches, even wear them, before they decide to buy them. Watches are displayed in the open, brightly lit counters within stores, and not locked away in boxes. Anything less will make the store consumer unfriendly. Therefore, our consistent view has been that various provisions of the weights and measures Act that apply to packaged commodities (such as the need for copious elements of information on the box, the way such information has to be presented, etc.) should not apply to watches, and an Indian high court has also upheld this view. The matter is now subjudice in the Supreme Court. Also, the application of this Act to watches leads eventually to higher excise duties, which is an unfair burden that the watch industry has requested the government to review favourably. Is there a fear that if we don’t re act quickly enough, India could miss the bus? I ask this not only from the perspective that China is now the market of choice for brands, but also from the perspec tive that watch penetration in In dia is still quite low and multiple ownership is abysmal. India can miss the bus on becoming a global watchmanufacturing hub if manufacturers shift from China to countries such as Vietnam, as China becomes increasingly expensive. We have to position India as the alternative to China very quickly. Yes, watch penetration in India is less than 40%, and multiple watch ownership is less than 5%. However, we have seen good growth in the watches market over the past five years, and also an increase in the number of people owning multiple watches, particularly in metros. We need to accelerate these positive trends, which will require sustained investment and smart marketing. We are happy to see that there are more than 60 international brands selling in India today, and many of them are investing handsomely in marketing and retailing efforts here. Open any reputed weekly magazine in India, chances are (that) you will find at least two ads for wrist watches. This wasn’t the case five years ago. And if this continues, it will certainly make the market grow in strong double-digits. Note: All pictures of timepieces courtesy respective manufacturers.
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A sector to watch Volum e
In January, the All India Federation of Horological Industries published a white paper titled the Indian Timewear Industry 2011. The paper outlines the current state of the watch industry in India and sizeable future potential. This potential, the paper says, will depend on both the government and private parties stepping up. According to the report, prepared by Technopak Advisors, changes in taxation and other policies could accelerate growth in all segments and provide sizeable employment. The report projects that a reduction in excise duties could, in the medium term, turn positive for the government, and compares this to the impact in gems and jewellery exports. Key findings:
TIMEWEAR INDUSTRY SIZE
4,000-4,200 in R crore
PRESENT GROWTH
Organized
Unorganized
40%
60%
4,200
46
12-15%
27%
Penetration of watches in India
Unorganized
40%
Organized
60%
People with multiple watches
Market segmentation by price Volume (in million pieces)
FUTURE GROWTH
Value
Market composition
Value (in R crore)
8-10%
3.5%
Impact of reduction in excise duty in the mass to mid segment
Growth rates (in %)
Total government earnings (in R crore) 700
Mass
Mid
1,700
Premium
1,600
900
37
8.65 0.21
5-7%
8-10% 15-20%
500
Gender-based segmentation
Expected growth in employment in manufacturing Women
Men
40%
60% Reduction in customs duty has helped accelerate gems and jewellery production Production in $ mn
120,000
575
600
Current scenario (before tax reduction)
400
400
After tax reduction
Direct employment
300
2010
40,000
2015E*
2010
2011
2012
40
2014
2015
Impact of reduction in excise duty in the mid to premium segment Total government earnings (in R crore) 1,330
80,000
1400
Custom duty in %
2013
Current scenario (before tax reduction)
Indirect employment 1000
90,000
30
2010 800
60,000
160,000
20
30,000
500
550
325
10 200
0
0
25%
2015
45%
VAT
11%
Dials
7%
100%
2002
2003
2004
2005
2006
2,697
2,168
2,433 826
Trade margin
2007
701
13%
CST / C&F
2%
49.3
29%
Excise/ custom duties
62.7
CIF/ ex-factory
Hong Kong
1,945
Cost and margin structures across timewear market in India
China
577
7%
India
403
18%
Cases Straps and bracelets
2014
(in billion Swiss francs)
1,768
Other products
320,000
*Estimated
351
43%
2013
Swiss watch exports
1,641
How projected employment will be utilized in the industry Assembling
2012
05-06
281
04-05
2011
1,420
03-04
197
02-03
1,546
01-02
94.2
2000-01
2015E*
After tax reduction 2010
2008
2009
Source: Indian Timewear Industry 2011
GRAPHICS BY SANDEEP BHATNAGAR/MINT