A study by Bain & Co has pegged the Indian luxury market close to $6 billion and growing at 15-20 per cent a year, with the watches and jewellery segment leading the growth. And looking to tap into this growth is Swiss luxury watchmaker Tag Heuer.
Franck Dardenne, General Manager, LVMH Watch & Jewellery India believes that the two most critical aspects while marketing luxury watches are distribution and communicating to the end consumer. He attributed the success of the brand in India to retailers who have played a key role in building the brand from scratch in India. This is due to the trust factor that retailers share with their consumers, whereby advising and influencing the consumer decision. Dardenne added that the consistency which the brand has shown in its advertising over the years has helped reap results. The brand uses the same communication and visuals globally, and though it signed on Shah Rukh Khan as its local spokesperson over a decade ago, the endeavour is to ensure a good balance between local ambassadors and international celebrities.
Looking ahead, Dardenne sees key brands strengthening, leading to consolidation among leading brands. However, the growth of international luxury brands in India has been hindered by government regulations. Dardenne pointed out, “High import duty restricts growth because if the taxes were less, sales would be higher and we could invest more in marketing. Consumers also have an illusion that they pay less if they buy abroad. We take a hit on our margins so that we can offer the Indian consumer the same price here as abroad.” Despite international brands not authorised by law to retail themselves due to Foreign Direct Investment (FDI) regulations, he said that the brand still tries to provide the best retail and after service experience via local tie-ups, ensuring that the customer in India has the same experience that they might have at a Tag Heuer showroom anywhere in the world.
Meanwhile, Tag Heuer is betting big on India and the company is looking to maintain double digit growth rates. “In terms of growth, we have always had a double digit growth and look to maintain the same. This way, we can multiply our business every three or four years and our market share goes up as well. So, from one luxury watch out of six, we become one luxury watch out of five. Our overall goal is to develop the market so that in five years time India will be a top 10 market for Tag Heuer,” shared Dardenne.
For this growth, the company is looking at increasing its customer base in India by targeting the middle class with its broad range of products across price-points. “Having more high-end malls focussing on the luxury segment, which can drive good traffic, will also aid the growth of the luxury market in India,” Dardenne concluded.