New Delhi: Luxury watch retailer Ethos Watch Boutiques expects to cross Rs.1,000 crore in revenue by the end of 2020 from Rs.370 crore in 2015-16, backed by the planned launch of new global watch brands in India.
Ethos, the authorized retailer of 61 luxury watch brands including Rolex, Omega and Rado, is looking to invest between Rs.80 crore and Rs.100 crore over the next four years to expand in non-metro cities such as Raipur, Rajkot, Amritsar, Patna, Coimbatore and Lucknow. The company currently operates more than 45 premium stores in 14 cities.
“We are planning to open 25-30 more stores, taking the store count to 70 by 2020,” said Pranav Saboo, co-founder at Ethos Watch Studios. “We will be introducing new brands in our stores,” he said, adding that the company will be expanding with brands like Swiss luxury watchmaker Baume and Mercier. “We have entered into a strategic partnership with Baume and Mercier,” he said.
The company is also revisiting its existing store sizes and price points. With products priced between Rs.5,000 and Rs.1.1 crore, Ethos is looking to raise the bar. “We will be eliminating the Rs.5,000 range altogether. We will only keep watches starting from Rs.8,000- 9,000,” said Saboo.
The company will also expand its store size in metro cities from 1,300 square feet to 3,000 square feet besides expanding operations in the non-metros.
Rajat Wahi, partner and head (consumer markets) at consulting company KPMG in India said some companies had tried to take luxury brands to smaller towns before but the strategy hadn’t worked.
“I am not sure if watches will be a different category, given the permanent account number (PAN) card rule. I think the watches within the range of Rs.10,000- 15,000 can do well in the non-metro markets because the super luxury concept doesn’t exist in these markets,” he said.
In January this year, the central government made it mandatory to quote PAN for all transactions above Rs.2 lakh. Furthermore, the special investigation team (SIT) on black money set up by the Supreme Court in July recommended a ban on cash transactions above Rs.3 lakh.
The move is said to have affected the luxury product market which deals in cash transactions. “The PAN card rule has hit the business, but the segment is still growing. The pace of growth, however, has slowed down,” said Saboo.
The luxury market in India is expected to grow five fold in the next three years. According to a study by the industry lobby group Associated Chambers of Commerce of India, Indian luxury market is expected to cross $18.3 billion in 2016 from $14.7 billion in 2015, growing at a compound annual growth rate (CAGR) of about 25%.
