Titan Industries Limited

Delivering value by creating Brands

TITAN BUSINESSES EXTEND ACROSS MULTIPLE CATEGORIES

Watch Jewelry Eyewear PED

Overall Revenue in 2010-11 = ~$1.5 Bn PBT of ~$ 0.13 Bn Rev Projected to grow to $ 3 Bn in 2014-15

How It All Began

2009: Helios 2007: Eyewear 2006: Goldplus 2005: Precision Engineering(PED) 2008: Zoya 2010: Fastrack Accessories

2003: Fastrack

1998: SonataLaunch
1996: Tanishq 1994: Timex JV 1993: Europe Foray 1987: Launch of Titan watches 1984: Conceived

Vision, Mission & Values

Vision To be world class, contemporary, innovative and progressive in all business endeavors and to build Indias most desirable brands

Mission To create wealth for all our

stakeholders by building high performance businesses through a customer centric approach and to give back to the communities within our realm

Scope of Project: TITAN Targets for 2015

Increase revenues 3 fold Targeted revenues: Rs. 14000 Cr Titan watches market share increase from 65% to 75%

Watches

B2C B2B

Businesses

Jewellery

TITAN Products

Eyewear

Precision Engineering Division

Industry Domination
Luxury Premium

Mid Market

Mass Market

Licensed Brands

11

Indias Largest Specialty retailer

Luxury
2

Premium
311

Mid Market
120

150

325

47

Mass Market 29

665 exclusive stores

Over 800,000 sft of retail space

4 million buyers
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Also has international operations

Kuwait - 45 Iran- 41 Qatar - 52 Bahrain - 57 Bangladesh - 70 Ghana- 5 Nigeria- 10 Saudi Arabia - 642 Thailand-21 Pakistan-62 Nepal - 30 Brunei- 10

Vietnam- 95
Malaysia-92 Singapore - 44

Ethiopia 11
Uganda - 15
Djibouti- 1

Sri Lanka- 67 UAE- 120

Oman - 97

Kenya - 23
South Africa

Mauritius- 17 Maldives - 15 Yemen - 15 Fiji- 4

1600 outlets

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Major Segments

Source: Titan Annual Report 2010-11

Inference: To target the growth needed, Watches and Jewelry are analyzed as revenue earners
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WATCHES

38

Where Titan stands today

Worlds 5th largest Watch Manufacturer 65% market share in organized watch market Sonata: Indias largest selling watch brand Distribution: More than 10,000 Multi-brand outlets

43

Adjacent Strategy
Premium Segment

New Geographies

GCC South Africa Europe US SARC nations South-East Asia

NRI population

GCC Asia Africa

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International Approach
International Sales = $25 million 3% to 4% share across GCC (Gulf Cooperation Council: UAE, Qatar, Oman, Bahrain, Saudi Arabia and Kuwait ) watch markets

Aim to increase to 10% share in GCC

Marketing budgets tripled to 15% of net sales GCC watch market: 20-25 million watches growing at 5% annually High competition zone:
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GCC Watch Market

Brands Map

Low End < $40 Mostly local players $40

TITAN, Citizen, Seiko, West Star, Swiss Star etc.

$80

MidPremium:Citizen, Seiko

Omega, Rolex, Rado

Price
> $250

$200

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International Strategy: Global

High Buyer Power High Supplier Power: ETA, Al Hussaini, Bahwan, and Al Futtaim are the distributers for Titan in GCC. Charge high margins Titan competes in the clutterred mid-market segment. Competition from reputed brands like Citizen, Seiko etc. Margins stretched for cost advantage Appeal to emotional connect of Indians in middle east and the buzz created by the launch of a new product

Recommendation
TITAN is better off concentrating on Domestic Market International expansion within Asia makes sense GCC, SARC nations and South-East Asia are targets for positioning as a mid-segment watch Target NRIs in these regions

Watch Market Map

Formal / Classic
Raymond Weil Tissot TITAN Citizen Omega,Rado, Longines

Sonata, HMT, Maxima

Nebula

XYLYS
Price
5000

Rs 250

1000

2000

4000

10000

30,000 +

Zoop

Timex

Fastrack

Espirit, Swatch Fossil Giordano, DKNY, Carrera FCUK Tommy Hilfiger

Fashion/Sporty

Tag Heuer Hugo Boss C Dior

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Domestic Market
The Watch Business should continue to pursue rapid and profitable growth through:
Rs. 1210 Crores ($272 million) Sales Domestic watch Market growing at 15% Womens watch market growing at 20% New and nascent consumer segments(first time users)

Present Position

Penetration of Watches in India is a meagre 27% and 65% of this market is constituted by Rs500 sub-segment. It contributes 24% of the value sales.

Watch Market Map

Formal / Classic
Raymond Weil Tissot TITAN Citizen Omega,Rado, Longines

Sonata, HMT, Maxima

Nebula

XYLYS
Price
5000

Rs 250

1000

2000

4000

10000

30,000 +

Zoop

Timex

Fastrack

Espirit, Swatch Fossil Giordano, DKNY, Carrera FCUK Tommy Hilfiger

Fashion/Sporty

Tag Heuer Hugo Boss C Dior

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Market and brand leadership >50% uses the muscle of a vast distribution network
11,000 Dealers

ALL INDIA

2500 Towns

311 Showrooms 47 Stores / Kiosks

World of Titan

129 Towns

Fastrack

22 Towns

6 Multi-brand store

Helios

4 Towns

745 Centers

Service Centers

345 Towns
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Watches SWOT Analysis

STRENGTH:.
Market leader in watch sales by volume and revenue Variety of products catering every segment More than 700 service centers across 350 towns

WEAKNESS:
Not able to capture the premium segment

OPPORTUNITY:
25 watches are sold for every 1000 people in India compared to 250 watches sold for every 1000 people in developed countries

THREAT:
Introduction of watches by Tommy Hilfiger in the Rs.1500-Rs2000 bracket Entry of low priced Chinese watches.

Recommendations
Target the Sub Urban and the Rural Market Expansion of retail stores
Sub Urban Areas:
Promotion of Sonata range of watches whose price range is between Rs.350 Rs 700 Estimated growth rate is 45%

Rural Market :
Promotion of Super fibre range of watches whose price range is between Rs.200 Rs 450 Estimated growth rate is 30%

Investment in brands
Purple by Titan: an offering of fashion watches for women Tycoon by Titan : a new collection of gold look watches

Jewellery

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Jewellery Business
Titan Design at its Best!

Jodha Akbar Jewellery

Femina Miss India Crown

Commonwealth Games Baton

Industry Domination
Luxury Premium

Mid Market

Mass Market

Jewellery
Three major brands Tanishq, Gold Plus and Zoya Largest jewellery retailer in India
120 Tanishq boutiques 29 Gold Plus stores 2 Zoya stores

Manufacturing facilities in Hosur and Dehradun Innovative Services Golden Harvest / Future scheme, gift vouchers, gold exchange schemes and made to order facility Loyalty Programmes - Anuttara & Ananta Customer First and Lean initiatives in manufacturing and retailing

Recommendations
Tapping the Rural Market: GoldPlus
Globally, India is the highest gold jewellery consumer (800 tonnes 2011), An 16 billion USD market Key demand drivers: Growing disposable incomes, rising aspiration levels of Indian consumer and enhanced exposure to media Opportunity in Jewellery: Rs. 100,000 crore market Branded Jewellery: <10% Rural Market: 62% Problems in Rural Market: under-karatage Titans campaign to focus on
- Purity - Brand Value

Recommendations
Focus on design and innovation
High Potential: Studded Jewellery
Diamantine goldplus studded jewellery (Goldplus studded jewellery category grew by more 135% during the year) DSS (Double Studded Sales) programme of Tanishq (Tanishq studded category grew by 50%) than

Recommendations
Resource Development: Expand Karigar Parks

Estimated to produce close to 40% of the FY15 gold Jewellery output, compared to the current 26%
Reduce labour costs, quality of designs, cut logistics costs, increase employment opportunities

Mitigate risks due to price fluctuations

Position gold more as an adornment, less as an investment instrument Polished diamonds costs up by 90% last year: Go for :

long term relationship with dealers, buy large quantities of rough diamonds In-house diamond polishing

Recommendations

Gold
Pure Gold

Alloying

Casting Fire Assay

Traditional jewellery making

Master making Mould making Waxing Casting

Finished product

Polishing

Linking

Stone setting

International strategy
International Expansion:
India's CPD exports already accounts for 80-85 per cent of the global market, thus reducing the scope for further expansion. Hence the best bet lies in the jewellery sub-sector STRENGTH:.
India is the worlds biggest consumer of gold Estimation of 10 per cent annual growth in India's jewellery exports in coming years

WEAKNESS:
India is by far behind Hong Kong, Italy and Germany in terms of jewellery design

OPPORTUNITY:
To capture the NRI market overseas Indias exports of gold jewellery (13 per cent of its total gem and jewellery exports) are negligible and hence have a scope to improve

THREAT:
Very good designs provided by the competitors from Germany, Hong-Kong and Italy
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STRATEGIC FORMULATION
HIGH Pressures to lower costs
GLOBAL TRANSNATIONAL TITAN

INTERNATIONAL LOW LOW

MULTI-DOMESTIC

HIGH Pressures for local adaptation

Recommendation
Not to go international as the competition is very high Adapting to local cultures is also high Still a large untapped market in India Lot of scope to increase the designs and innovations in the local markets

Value Chain
Resources Capabilities Distinctive Competencies Strategies Competitive Advantages Superior Profitability

Employee Base
Close to 4350 professionals

Retail Network
560 retail stores across a carpet area of over 7, 09, 000 sq. ft. Indias largest retail network 300 exclusive World of Titan' showrooms and over 740 after-salesservice centers.

Capital
Revenues of US$1.46 billion Bottom line growth at 48% CAGR from 2008 to 2012E

Subs. and Associates

Markets Hugo Boss and Tommy Hilfiger internaitionally

General Administration

Support Activities

Technology development Human Resource Management

Sales and Marketing Procurement Expensive raw materials Internal Supply of Steel External Supply of Gold, Diamonds Service Extensive customer service

Primary Activities

High Spend on advertising

Thank You