Ethos operates 44 stores across the country and has been authorised by 50 global luxury watch brands to sell their wares, Vora said, adding that the company has grown 37 per cent per annum over the last five years. 

On what got him interested in the luxury watch retailer Ethos, Vora said that the company’s line of business sits well in the fund’s theme of looking at entities catering to the ‘consumer of tomorrow’. “Luxury watches as a segment is growing well, which is evident from the fact that Ethos has grown at a compound annual growth rate (CAGR) of a scorching 37% over the past five years and is a market leader in its space.

“As more and more aspirational consumers look to upgrade (from traditional Indian brands) the play will be in the luxury category where masterbrands are dominant,” said Vora, adding that Ethos is an authorised retailer for around 50 global luxury watch brands priced from Rs 10,000 to over Rs 1 crore.

Today, on 12th July 2017, I visited DLF Mall of India in Noida, as soon as I entered I saw a Swiss Luxury Watch showroom owned by Kapoor Watch Company who claim to be India’s largest authorized retailer of Swiss luxury watch brands like Rolex, Hublot, Audemars Piguet, Roger Dubuis. On the ground floor, I saw 3 stores from Kapoor Watch Company (one was it’s own and 2 are Rolex and some other brand exclusive store). On the same floor Ethos has it’s own store and one exclusive store of TAGHeuer. You can see the picture of a sales manager of TAGHeuer with whom I had around 30min conversation apart from discussion with sales manager of Kapoor Watch Company. And outcome are mentioned below…

#1) I walked into the mall & saw there is a store called Kapoor Watch Company who seems to be a leader in NCR region alone. Interesting thing to know is on the same floor there were 5 luxury watch stores, it means there are growing demand of luxury watches that is why so many stores are mushroomed on the ground floor of the mall and remember that rental of the ground floor are likely to be more and they all are paying it. When I spoke to a sales manager of Kapoor Watch Company posing myself as customer who is looking to gift luxury watch in the range of 50K to 1 Lac, he told me to go to his own exclusive store of Rolex which was nearby because he had watches ranging above my expected price:-) Omega seems to be high end watch in his store, I came to know about it only today.

#2) After that I visited TAGHeuer exclusive store and spoke to this man in the picture, he said that don’t buy Rolex because it’s very common and generic held by many people, he showed me that there are 50 exclusive Rolex store in Noida itself hence buying a Rolex watch will not give a person elite status, it’s better you can go for TAGHeuer. He showed me few watches in the range of 50K to 1 lac but the one which I liked was costing 7 Lacs, wow equal to mid segment sedan. When I asked why and who will buy such costly watches? He said that, rich people buy real estate, gold, high end cars and luxury watches because they see buying these things as investment because it enrich their status symbol. 

One interesting thing he said was “To make a great luxury brand you must have history behind, you can’t build a brand in just few years or even in 10-20 years, you need 100 years or so”….remember that Tata Motor bought luxury segment Jaguar brand in order to get into next trajectory of growth, here Titan is mass market brand and since they don’t have luxury brand they will find difficulty in growing further at the same time they will not start selling luxury brand which will impact their own existing brands.  

Most of these luxury brands are operating since 1860 or so on…so when they buy such brands they associate themselves with a heritage or legacy which was there since last 100 plus years, wow! It’s like vintage collection which is very costly and works like a show piece for them which they can preserve and show it to their next generation. I learnt some lesson on how rich people thinks.

#3) When I asked if there is any re-sale value or warranty, he said as of now there is no resale value but there seems to be some websites who buy old luxury watches at some price. They provide 2 years worldwide warranty. This sales manager was a chef earlier who changed his job and moved into Ethos because of job comfort wherein he need to handle only few exclusive clients. I asked him that it might take another 5 years for this segment to catch the fancy, on this his response was the trend is already in place and they are growing well.

#4) He showed me few models and said that every model of TAGHeuer is associated with top rated players or actors in US or Europe (in fact, I hardly recognized any personalities who endorsed these watches). Swiss Brand company is spending good amount of money to enhance their brand visibility so these retailers like Ethos need not spend much because brands are already having brand followed.

My understanding is, trend is catching up and one need not miss this, it can become a huge opportunity down the line 10 years, just think a 300 cr Mcap company will no doubt become 30,000 Cr company in 10 years which is a 100 bagger opportunity! Investing 8-10% at an attractive price will make this a great investment.

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