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Edelweiss Securities
Dilip Doshi
India to be the fastest growing market for Montblanc
Despite challenges in locating premium real estate in tier 2 cities for expansion, Montblanc's sales in smaller towns have been growing through its joint venture with Indian watchmaker Titan and new ecommerce channels.Anandi Chandrashekhar | ET Bureau | May 15, 2018, 16:42 IST
CHENNAI: India will continue to be the fastest growing market for luxury writing instruments and accessories maker Montblanc, according to its chief executive, Nicolas Baretzki.
Despite challenges in locating premium real estate in tier 2 cities for expansion, Montblanc's sales in smaller towns have been growing through its joint venture with Indian watchmaker Titan and new ecommerce channels, Baretzki said on the sidelines of a store launch in the city on Monday.
The German luxury maison has 10 boutiques in the country and plans to open five new stores every year for the next three years, Baretzki said.
"Boutiques in tier 2 and 3 cities, and the new network through the ecommerce platform will keep India at the top in terms of percentage growth," Baretzki said. "It will definitely be much faster than any other mature market with large coverage where the growth is more on a like-for-like basis."
Montblanc has been looking to tap into demand from the non-traditional and smaller markets with an eye to expand in cities like Kolkata and Chandigarh. However, Baretzki said that locating premium real estate has been a challenge. "In many cities in India, where we believe we could have a presence today, we can't because malls at the standard of a luxury maison like Montblanc aren't available," he said.
However, despite this the company is seeing increased demand from smaller cities through its online sales channels, he said. "I believe the demand is there, which is also why a month ago we tied up with ecommerce platform Tata CliQ. We were surprised to notice that the majority of our sales were coming from cities where we don't have a boutique," Baretzki said.
After winning the international arbitration case last year that terminated Montblanc's 20-year relationship with former Indian cricketer Dilip Doshi's Entrak International, Baretzki believes the joint venture with Titan Company (since 2014) has proved better for the brand's business in India, and for customer proximity in smaller cities.
Abneesh Roy, senior vice-president at Edelweiss Securities, said the market for brands like Montblanc in India is quite large as the penetration of luxury products has been quite small.
"The luxury market in China is quite large if you see. As India's per capita income and aspiration levels go up, it's going to be a reasonably high, but gradually growing market. That's why Montblanc tied up with Titan, because earlier promoters weren't able to deliver profitability. It's a good business, but it is for the long haul," Roy said.
Bhaskar Bhat, managing director of Titan, had earlier told reporters that the company estimates a turnover of up to Rs 600 crore from the joint venture by 2020.
Tags : Apparel & Fashion, Accessories, Montblanc, titan, Ecommerce, Edelweiss Securities, Edelweiss, Dilip Doshi
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