A little over two weeks ago, India’s largest watch brand, Titan launched their innovative discount scheme. Under the scheme, customers can return their old watches of any brand at a Titan store and get 25 per cent off on new ones. Close on its heels Titan’s biggest competitor Timex launched their discount scheme under which customers get 25 per cent discount and, in Timex’s own words, ‘don’t exchange, just save’.
While Titan says they are not bothered about the competition as their scheme is for a good cause — they plan to give all the old watches to charity, Timex admits to taking a dig at Titan’s scheme with their advertisement.
“Titan’s scheme is slightly complicated for the customer, we thought we would simplify it. So we are not taking anything back,” says Salil Sadanandan, senior vice-president, sales and marketing, Timex.
Titan and Timex have been competing in the Indian market since Titan’s joint venture with Timex, which entered India in 1992, broke up in 1998. According to research agency Francis Kanoi, Timex has captured around 22 per cent of the
Rs 1,500 crore branded watches market in India, while Titan has 65 per cent if Titan Industries’ four brands, Titan, Sonata, Fastrack and Xylys, are included.
According to Sadanandan, while competition with Titan is a reason for the discount scheme being launched this month, the other reason is that August is a lean month for watch sales as there are no major festivals except for Rakhi in the north.
However, Titan Watches COO Harish Bhat says it is just a coincidence that the discount scheme was launched this month and not because August is a lean month.
“We were busy with other schemes and launches before this so the scheme was launched this month. In fact, I think this is a good month as a lot of weddings happen in August,” Bhat said.
“We decided on this scheme because it suits the Indian mentality. There are nearly 100 million watches in India that are over 10 years old. However, in our country people don’t like to throw away their old things. We are giving them the option of getting some value for their old product,” Bhat said.
“To persuade them to change their old watch we are telling customers to ‘swap their style’,” he added.
Titan says they will benefit from the discount scheme in two ways.
Firstly, two weeks into the scheme they have already sold products to three lakh customers, a sales growth of 250 per cent. The company is expecting seven lakh customers in the one month duration of the discount scheme.
Secondly, they will be able to do something for charity. “We plan to refurbish all the old watches and give them to charity,” Bhat said.
Timex on the other hand says that not only will their sales go up, they will also benefit as during sales customers move up the value chain.
“Customers are buying a high-end product which benefits us as we get more margins,” Sadanandan said.