Tata group-owned Titan Company managed to grow in FY22, even as the year saw two waves of the Covid-19 pandemic leading to lockdowns that forced stores to keep their shutters down during the first and the fourth quarters of the financial year. C K VENKATRAMAN, managing director, Titan Company, talks about how he sees other businesses growing over the next five years, in an interview with Sharleen D’Souza. Edited excerpts:
Despite two Covid-19 waves, Titan grew all three business segments in FY22. How did the company do that?
First, we remained quite calm and didn’t get worked up. The pandemic was beyond our control, so there was no point in getting worried about it. Second, being calm helped us to think about innovation and growth strategies in a more organised manner. Our minds were clear and we created highly effective programmes. We were able to comfort and give confidence to everyone in the organisation, saying that we’ll come out on top.
Going back to the first quarter of FY21, because it began at that time, we put the stakeholders first, instead of getting worried about the losses that we were going to make — which we did make — and how to reduce or minimise them. We focused on how to make the lives of all our stakeholders normal. There was no retrenchment, even the pay cut was nominal, and we ended up reversing it at the end of the same year.
We gave a lot of loans and grants to our partners, a lot of support to employees, all our partners, including transit homes for kaarigars (workers). Then, as the year passed, we supported employees’ families in their homes with vaccines. The idea was to support our employees and partners. We refer to ourselves as a very large family of 50,000 employees, which includes all these segments, and they rallied behind the company over the next several quarters.
We had exceptional relationships with our customers, through direct communication between the sales staff and them. We also had an exceptional gold-standard safety protocol in our stores, so that customers were not at all worried about coming to the stores even back in August-September of 2020, when Covid numbers were really high. Between the safety protocols, using the digital investments that we made in 2016-17, and the relationship that the staff had with millions of customers, we were able to get customers back with the right kind of triggers. Even in categories like watches, the team found ways to push for sales like gifting, even though people were sitting at home.
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What caused Titan to see sales in the Diwali quarter, despite it being the year of the pandemic?
Titan has a large dependence on the jewellery business and in India, at least, people gravitate to the jewellery category in good times and anxious times, because it reassures them about the future if you stockpile some gold and jewellery. Despite the first quarter of FY22 being even worse than the first wave, people also wanted some kind of normalcy, and gathered together to celebrate weddings. Also, because international travel was not happening, there was a certain share-of-wallet advantage in high-ticket items. Domestic travel was probably only limping back at that time.
These factors also helped us, apart from the intrinsic desire for jewellery in those anxious times. People were also not able to celebrate weddings with pomp, in terms of large crowds, so the industry gained in terms of share of wallet. Some of the money may have otherwise gone into destination weddings and large five-star hotels, and the crowds at these events were limited, which helped us.
The general tendency of feeling good by buying jewellery also helped us, and that’s what led to the industry recovery. Of course, the acceleration of formalisation went in our favour. The Tata name was getting stronger because of what the Tatas did during Covid time, and people’s affection and respect for the Tata name really went up. Multiple factors helped us to recover faster than what was perhaps believed possible.
FY23 is a fully operational year after two years. Will you be able to continue that kind of strong performance this year and the next?
The overall enabling aspects continue, and we are confident about the year continuing on the same track. In January we spoke about our performance and how January was continuing the Q3 trajectory. That confidence is there with us for the rest of FY23, and we are quite confident about FY24.
Titan has entered ethnic wear and recently, the bags segment, too. Will you be able to scale up these businesses, and also look to enter newer segments?
We are still a small player in the ethnic-wear business, and certainly in the bag business. In the immediate future, our focus will be to scale up those two into much bigger versions, and make the same mark in those categories.
How do you see digital demand panning out? Will it impact your store openings over the next five to 10 years? Or, the way consumers buy? Will you have to change the buying experience to cater more to the digital customer?
It’s very difficult to predict 10 years out, but certainly five years out, I see no change in the thrust of the company in terms of stores, because it has just become a more holistic 360-degree kind of experience, what’s called omnichannel. Even a brand like CaratLane, which was substantially an online business in 2016, when we acquired it, has so many stores today and is planning many more in the future.
That is also because of the categories where we operate, partly because of ticket sizes, partly because of multiple people being involved in the purchase decision. For example, a wedding jewellery purchase is made by many people. I think a lot more exploration, discovery and shortlisting is moving online. I don’t see any let-up in retail network expansion, certainly not in a five-year time frame.
Will Titan pursue any M&A activity to enter any segment, or expand to a new segment?
Anything is possible, but there is nothing to share at the moment.
Where do you see Titan in the next five years?
One important change that we want to see is the share of all the new categories, in terms of both customer share and revenue share. Smart wearables, which we entered into about six years ago, for example, are starting to do exceedingly well. Taneira in the ethnic-wear category, women’s bags and fine fragrances are categories which I see contributing much more significantly to customer share and revenue share in the next five years.
The second is Titan’s international business, which has been very small. In the last three years, it has seen explosive growth, and we see international business contributing in significantly in the next three to four years. These are two big changes — the portfolio as well as geographical contribution. The whole omnichannel share, our focus on multiple things relating to ESG, and stakeholder capitalism, are differences that we see happening by FY26 and FY27.