Despite a growing economy, increasing consumerism, favourable demographics and more than a million high net worth individuals, the Indian timewear industry is not able to grow to its full potential; thanks to government restrictions on foreign direct investment (FDI).
A White Paper, ‘The Indian Watch Industry’, prepared by the All India Federation of Horological Industries (AIFHI) and Technopak Advisors says the watch industry, one of the oldest in India, has a penetration level of just 27 per cent and the market size is much less compared to other countries.
The Paper lists FDI restrictions as a key impediment to the growth of the watch market in India. It says, “FDI restrictions are not allowing international brands to have complete control over retailing.” The other roadblocks on the way are:
- Unorganised (traditional) sector or grey market poses a big threat
- Penetration and use of mobile phones for timekeeping
- High Rentals
- Unavailability of skilled sales staff
- Complex and varied taxation structure
- Organised (modern) retail in India at the nascent stage
It further says the watch market has a pyramid structure where the mass segment has the largest contribution – around 60 per cent market share is controlled by modern players such as Titan, Timex, Maxima, HMT and many Swiss, American and Japanese brands, while the remaining 40 per cent is operated by grey market players.
In the future, though, the market is expected to become like an inverted pyramid as luxury and prestige watch segments are growing faster.
– IndiaRetailing Bureau