Rising demand for home décor products such as bed linen, wall hangings, rugs & carpets, etc., is boosting the country’s home furnishings’ market
The home décor industry in India is garnering exponential profits growing in tandem with the recovery of the real estate market, millennium earners and rising disposable incomes.
India is one of the fastest growing markets for home furnishing products in Asia-Pacific. Rising demand for home décor products such as bed linen, wall hangings, rugs & carpets, etc., is boosting the country’s home furnishings’ market. Growing usage of home furnishing products in residential as well as non-residential sectors is expected to drive demand for home furnishing products in India. According to a TechSci Research report, the home furnishings’ market in India is projected to cross INR 40,000 crore by 2020, on account of rising demand for contemporary designs, an increasing number of households, growing demand for branded and custom designed furniture, and the increasing availability of innovative and affordable home furnishing products in the country.
Over the last five years, India has emerged as one of the fastest growing markets for home furnishing products in APAC. In 2016, the home furnishings’ market in India is expected to witness a year-on-year growth of around 9.5%, with a similar trend anticipated to continue through 2020.
Factors Contributing To Growth
Home décor is witnessing a strong growth catalysed by rising levels of disposable income, recovery of the real estate industry, increasing urbanisation rates awareness levels as people are becoming more global travellers. Rising levels of urbanisation have resulted in an increasing number of new households being set up. Currently, more than half of the global population lives in urban areas and these levels are expected to increase further in the coming years, creating a positive impact on the demand for home décor products. Moreover, these are income elastic; global disposable incomes are expected to increase continuously over the next few years, particularly as India is an emerging economy. Additionally, the social stigma of nuclear families and millennials becoming a part of the wage-earning economy has been a further boost to the real estate economy, and in parallel the home furnishings’ industry.
Varying Business Models
The business model for a home furnishing franchise store has infinite possibilities, ranging and depending on the product/brand you aim to open. In the case of bed linen/curtains etc, an average store’s pre-requisite investment would be 20-30 lakhs. Whereas, the area of the said store would be 800-1000 sq ft. with state-of-the-art interior fixtures and displays costing 10 lakhs, the inventory would further take up 10-12 lakhs of the initial investment. A store of this kind and space would require a staff requisite of 4+1, with one general floor manager and 4 retail salesmen whose combined salaries would amount to 80,000-1 lakhs. The miscellaneous expenses would fall under the range of 70,000-90,000 per month.
Tallying these expenses, a home décor store could earn the monthly revenue of 8-12 lakhs, breaking even in less than 6 months, depending on the location/city of the store. Home décor stores could, however, specialise in furniture, bathroom fixtures, floor tiles etc. as well, the investment for which would be higher than 50 lakhs and the area required for said stores could exceed 1200 sq ft. The inventory for a furniture store would amount to 20-25 lakhs and the interiors, an additional 10 lakhs. The store would also require a 4+1 staff requisite whose salaries would also amount to the same 80,000-1 lakhs. The miscellaneous expenses would be higher in range amounting to 80,000-1 lakhs. In addition, however, a store of this category could earn monthly revenue of 12-15 lakhs, placing its breakeven between 8 months-1 years depending on location/city of the store as well as the popularity of its inventory to the local tastes.