Opportunity Dec, 09 2015

What All You Need To Start A Modular Kitchen Business?

The modular kitchen market in India is projected to witness a double digit growth in the coming years. The demand for prefabricated kitchens is on the rise as more and more housing projects are coming up, shifting lifestyles of consumers and the availabil

By Amanpreet Kaur, TFW Bureau
Chief Sub Editor
What All You Need To Start A Modular Kitchen Business?

What has spurred the growth of modular kitchen industry is majorly a shift in terms of increasing number of housing projects, entry of organised players, rise in incomes and a changing consumers’ view on home aesthetics.  With rise in availability and affordability to have kitchen solutions at consumers’ doorstep, the desire to have contemporary kitchens has created a promising business opportunity for prospective franchisees as well. Those who are looking to invest in businesses that entail investment of up to Rs 50 lakh can make money by setting up their exclusive studios or stores offering kitchen solutions under one roof.  

Technavio's analysts forecast that the modular kitchen market in India is likely to grow at a CAGR of 51.87% over the period 2014-2019. Modular kitchen segment today holds immense opportunity and is one of the booming industries in India.  According to Wazir Advisors, the domestic furniture market is valued at Rs 90,000 crore while the modular kitchen segment is Rs 300 billion entity. Brands within this segment that are growing profitably are Hafele India Pvt Ltd, Evok, Zuari Modular Kitchen, Timbor Home, Wurfel Kuche, Nesta, Beth Lifestyle Private Limited, Godrej Interio, Sleek World, IFB Modular Kitchens and many more. Most of the brands within this segment are expanding by partnering with dealers and franchisees across the country.

According to consulting firm – PricewaterhouseCoopers and equity research firm Edelweiss, about 70% of modular kitchen market in India is unorganised and it is projected to cross Rs 6,000 crore by 2016.

Business model

Coming over to modular kitchens’ business, there are number of international kitchen players that are looking to explore the franchise model for expansion. Adding about their business model, Jurgen Wolf, MD, Hafele India Pvt Ltd says, “Häfele, through its franchise model focusses on offering a complete kitchen solution under one roof. We provide contemporary kitchen hardware but also sell appliances, sinks, faucets, luxury surfaces and lighting solutions through our franchisees.” On tapping franchisees, George Thomas, CEO and Co-founder, Beth Lifestyle Private Limited says, “Beth Lifestyle and its franchise is a very uniquely positioned business with far deviations from traditional modus operandi. Unique product line with literally no competition would give a very clear first mover advantage. A very high technology content in our business process makes our business model an asset light version and yet very nimble. Partnering with us would be a phenomenal opportunity for entrepreneurs to plug and play into our ecosystem and own and run profitable businesses.”

Related: How to start an ethnic wear brand

Selecting an ideal business partner

Scouting a right business partner is always a challenging task for every franchisor. For this, Hafele follows a stringent evaluation process conducted on all prospective franchisees is based on three broad parameters i.e. the location of the store; the financial capability of the partner and the involvement of the partner in the business. Informing about the steps that they follow, Jurgen Wolf says: “It is also beneficial for us as a company to team up with franchisee partners who have a ready base in modular kitchens and deal with the right vendors. The partners should believe in providing exceptional service and should possess the right business acumen to impart the company’s vision and mission into the market. This not only helps the company in sharing investments but also helps the franchisee gain mileage from our brand.” On the other side, Khanindra Barman, CEO, Wurfel Kuche, says: “Most important quality Würfel looks for in a franchisee is passion and motivation to promote the brand.”

Related: Live Kitchen concepts are making waves in India

Expansion plans

Currently, Hafele India has around 82 franchise showrooms across the country and it further intends to take this number up to 100 by the end of 2016. For Wurfel Kuche, the road map is to reach 100 franchises in the three years across India. The brand will start exporting to the closest countries as Bangladesh, Sri Lanka, Philippines and the UAE by 2016. On the other side, Beth Living is looking at adding 50 customer experience franchise centres and is specifically targeting AP and Telangana, Tamil Nadu, Kerala and Delhi.

Franchise facts

Brands

Investment

Area (in sq.ft)

RoI

Hafele India Pvt Ltd

Rs 10-50 lakh

500-3000

2-3 years

Wurfel Kuche

Rs 25-30 lakh

1200

8 months

Beth Lifestyle

Rs 12-15 lakh

700-800

-

Related: Start a complete home store

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