Under Baskar Bhat, Titan changed into a larger lifestyle company with presence in watches, jewellery, eye-wear and fragrances. He has also taken lifestyle to the masses.
The business environment in the last one year has been especially tough, and Titan, like most consumer companies, has been hit. Its business slowed down in the first quarter of FY20 after close to 20 per cent growth in FY19. In the second quarter of FY20, the company posted revenue growth of 0.6 per cent. It has reduced growth expectation in the second half of FY20 from 20 per cent to 13 per cent.
Bhat says the company believes in investing in innovation and rolling out more stores despite the consumption slowdown. "We didn't cut down our spends," he says. However, the company has consolidated some of its functions like design. It now has a common design team which works across all its businesses. "We have also invested heavily on technology, which is basically the online business," says Bhat.
The one big lesson that Bhat and his team at Titan have learnt from the ongoing slowdown, he says, is agility. "We learnt to listen to what is happening in the market and at the same time anticipate. When consumption slowed down, we introduced an attractive exchange policy at Tanishq which ensured that consumers kept visiting our stores. We made our loyalty programme more attractive. So, we built in agility to respond to the market conditions," he explains.
Yet another example of Titan's agility has been its switch to smart watches. After being the nation's time-keeper for decades, the company realised that its expertise in analog watch making was fast losing relevance. It was losing out to the likes of Apple, which made 80 million watches in 2017, while Titan hardly made 15 million watches. It quickly partnered with Intel to launch touch screen smart watches. In the last fiscal, Titan's watch business contributed 13 per cent to the revenue and grew 20 per cent versus 6-7 per cent overall growth in the financial year. Bhat is the first to admit that the company didn't fathom the magnitude of threat analog watches could face. "We got preoccupied with delivering profits rather than keeping the innovation engine alive. We lagged in smart watches," he said in an earlier interview with Business Today.
Long-term value creation is crucial for the survival of any corporation, but playing a long innings is not just about financial valuations. Bhat says that in the past few years, he has been actively working towards building a future-ready Titan. He started an emerging leader programme, which is aimed at developing talent identified from the middle layer of the company. The company has also started "Design:Impact Awards" in partnership with a Tata trust through which it honours as well as mentors start-ups and grassroot innovators who design creative, sustainable solutions. Some of the innovators identified by Titan are Nanosolution (which treats polluted water), Greenhouse-in-a-Box (which protects small-scale farmers crops from climate risks and grows seven times more food by using less water) and AnuPath (a device that helps in diabetes management). "We have embarked upon (a journey of) not just creating a very strong economic entity, but also a wholesome, future-ready company. Customers are also inclined to buy from responsible corporations," says Bhat.
Bhat has set a tall task for his successor, C.K. Venkataraman, the new MD of Titan. His vision is to make Titan a Rs 52,000 crore-entity by 2023. In September this year, Bhat hung up his boots as the MD after being with the company for 33 years. Ask any employee about what they would never forget about Bhat, and the most spontaneous response would be his humility. The doors of Bhat's office were open for everyone. A fan of Kishore Kumar, Bhat's favourite way of bonding with colleagues was singing the legend's hits.
If there is one lesson that India Inc needs to learn from the 65-year-old erstwhile MD, it is the art of building valuable businesses that appeal to both masses and classes.