Demand outlook for premium consumer businesses is robust and the “growth rhythm” will persist over the next three-four years, said CK Venkataraman, managing director, Titan Co. He highlighted the divergent trends in the consumer goods sector across categories with premiumisation booming while mainstream demand remains subdued.
“In the significant per-capita income shift that’s expected to happen in the next few years, the top-tier income segment numbers are expected to grow faster than those income segments which are lower,” said Venkataraman, winner of the ET Business Leader of the Year award. “This has been happening over the last few years as well.” Venkataraman has been leading Titan since October 2019, having spent over three decades at the company and other Tata Group units.
Companies in sectors such as consumer and lifestyle as well as phones and cars are benefitting as consumers with higher disposable incomes spend more on premium products. Mass categories have witnessed downtrading as inflation-hit consumers hold back purchases. Under Venkataraman, Titan’s revenue has doubled in four years to Rs 38,569 crore in 2023 and market value has risen by a similar degree to Rs 3 lakh crore, only the second Tata Group firm to reach that milestone after Tata Consultancy Services (TCS).
Titan, which began as a watchmaker in 1984, is pushing for growth across all categories it operates in, such as jewellery, sarees, eye care and smart wearables — both high-value and volume segments.
“Given the management attention that all these categories require, we will not be entering any new category in 2024,” Venkataraman said in an interview.
“Titan will also give the volume segment the attention it deserves. In FY24, two affordable subbrand launches in watches —Poze and Vyb — are evidence of this attention.”
Titan hasn’t been just a watchmaker for many years now. Venkataraman calls it a “complete lifestyle company”. And he’s been responsible for much of that transformation.
An IIM Ahmedabad alumnus, Venkataraman has risen steadily through the ranks at the Bengaluru-headquartered company. He started as an advertising manager at Titan in 1990 and moved on to head the jewellery division in 2005. He’s credited with taking Titan from being a predominantly brick-and-mortar-focused company and expanding into multiple consumer lifestyle categories with a mix of offline and online retail. The shift was accelerated during the Covid-19 pandemic, which struck soon after Venkataraman took over from predecessor Bhaskar Bhat.
Yet, as the watches-to-sarees company sharpens its positioning in high-end segments across core categories including jewellery, watches, sarees, perfumes and eyewear, it has no plans to abandon the value segment.
Apart from Titan watches, the company sells jewellery brands Tanishq, Zoya, CaratLane and Mia. Other Titan brands include Taneira sarees and IRTH women’s handbags.
The outlook is strong for the current year in top-tier sectors and companies, Venkataraman said.
“The compound annual growth rate of the passenger car segment sales over the last five years is double that of the two-wheeler segment, illustrating and confirming this point,” he said. “This is a secular trend and will benefit sectors and companies which derive their business from those higher income segments.”
Titan reported a 15.45% increase in consolidated net profit to Rs 1,053 crore in the December quarter, while consolidated total income rose 24.1% to Rs 14,122 crore.
Analysts flagged key downside risks such as a heightened competitive environment and macroeconomic weakness. On the plus side, they counted Titan’s execution and the management’s positive outlook. Jefferies praised the implementation of growth strategies through new store additions, launches and overseas expansion.
The company will continue global expansion “at a brisk clip”, led by Tanishq, concentrating on the Indian diaspora across the world, with North America and West Asia being its priority markets overseas.
Its jewellery business in India grew 21% in the December quarter, riding on healthy double-digit buying in the festive season. The unit is “doing exceedingly well” and the company is focusing on penetrating smaller markets, setting up bigger jewellery stores in larger cities, and escalating partnerships with wellknown names such as designers Tarun Tahiliani and Rahul Mishra besides cricketer Sachin Tendulkar for endorsements.
While premiumisation, innovation, global design and manufacturing are driving growth in watches, within wearables the company is focusing on differentiated products this year, Venkataraman said.
For sarees, the company has drawn up an expansion blueprint beyond its 60 stores. Plans for eyecare include ‘smart’ glasses and night driving lenses. It’s also adding exclusive brand outlets in fragrances and fashion accessories.
Venkataraman added that small-town opportunities are leading to growth across lifestyle segments, noting that companies which have entered these smaller markets earlier are enjoying the fruits of being first movers.
(The ET Awards 2023 ceremony will be held in Mumbai on Friday, March 15, 2024)
