Emerging Opportunities in the Indian Watch Market

Published by Sharekhan Education | March 26, 2024

Amit Pathak | Sharekhan Education

In this blog article we will discuss about Emerging Opportunities in the Indian Watch Market. You will also know about Ethos ltd, one of the largest Watch retailers in Luxury and Premium segments.

Introduction:

Watches come in various styles, designs, and functionalities to suit different preferences and needs. The market divides into Traditional Watches and Smartwatches. Traditional watches hold a majority share of approximately 76%, while smartwatches comprise 24%. The smartwatch segment is expected to witness rapid growth due to increasing demand. This is driven by features such as fitness & health tracking and compatibility with smartphones & laptops. Traditional watches continue to maintain their market share, primarily because they are often considered decorative jewelry. They cater to diverse audiences, with their appeal lying in their design and craftsmanship.

About the watch industry:

Indian watch market is expected to grow at a CAGR of 10.6% over FY20-25. This growth is attributed to factors such as increasing urbanization, rising discretionary spending on watches, higher per capita income, the opening of more organized channels of purchase like Multi-Brand Outlets & online marketplaces, and the growing popularity of smartwatches. The sector is dominated by organized players having a 65% share of the overall market, and unorganized players have around 35%.

The Premium & Luxury Watch Market comprises segments like High Luxury (Rs 10 lakhs and above), Luxury (Rs 2.5 to Rs 10 lakhs), Bridge to Luxury (Rs 1 to INR 2.5 lakhs), and Premium Watches (Rs 25,000 to Rs 1 lakhs). Watch prices hinge on design intricacy, craftsmanship, and brand reputation, shaping value perception in the luxury segment. Organized players often provide better after-sales services, such as repairs and refurbishments, with additional warranties and guarantees, which positively influences the purchasing decisions of customers.

About Ethos Ltd :

Let us discuss Ethos Ltd in this space. The company is one of India’s largest Watch retailers in Luxury and Premium segments. They have a curated selection of over 60 premium and luxury watch brands, including an impressive lineup of 46 exclusive brands. The company is present across 23 cities with a network of 60 stores. They leverage both physical outlets and a strong online presence through websites and social media platforms. Their economic moat lies in their ability to build and maintain relationships with most of the biggest global watch brands. The management has given the guidance of opening 25 new stores by the end of FY25. 

Financials of the company:

The latest brokerage report anticipates the company achieving a 35% CAGR revenue growth and a 43% CAGR profit growth from FY23 to FY26. The growth path is expected to expand ROCE from 16% in FY23 to 21% in FY26. The company is emerging as a key beneficiary of the demand transition from unorganized to organized players.

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