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Oct, 01 2007

Fusion of comfort and style

While a beautiful house and a beautiful office play an important role in our daily life, furniture continues to serve as the beautifying element. The more we depend on various fixtures in our homes and offices, the more we feel the necessity for their upk

Today, awareness about and desire for stylish furniture has spread far and wide among most households across the country. Stylish and classy furniture has become the latest fashion statement and not only house owners but corporate people are also spending extensively on it.

This trend has its impact on the market too. According to industry experts, furniture industry is expected to grow by 20 per cent a year and as a result India will witness a boom in this sector.

Namrata Dugar, Managing Director, Kian India, opines, “Indian furniture industry is becoming more organised but to make it so, integration between large, medium and small scale producers, by means of product outsourcing and specialisation, is very important.” Dugar further adds that by developing the capacity to identify markets, and by adopting competitive measures in production and finally marketing the products at the right place to the right customers with the right price will help this market to grow in more organised way.

Exponential growth

As the world economy is developing fast for the last 10 years, developing countries like India is also taking advantage of the world economic boom. Recent survey shows that India has already built upon the competitive advantage among the other furniture developing countries in the world and has gradually covered almost 30 per cent of the world market.

Parmashwaran, Chief Operating Officer, Style Spa, opines, “Furniture market is growing at a rapid rate of 40 per cent year-on-year. More international players are coming now and we will see a definite boom in this sector in few years.”

Riding high over internal demand, Indian furniture industry is growing at an exponential rate. At present the Indian furniture market is estimated at Rs 7.8 billion, while total furniture production in the country is around Rs 1.7 billion. In India, furniture developers generally use a four-tier selling and distribution structure, comprising of the distributor, whole seller, retailer and franchisor. Furniture industry has significant socio-economic importance also, it provides employment to around 0.3 million people in the country.

Dugar adds, “The furniture industry is experiencing the boom of the real estate industry. Every aspect is developing – residential, corporate, hospitality, etc. Hence, there is a big demand for furniture especially contract and residential furniture.”

India was the biggest furniture importer in 2004-05, with a 17 per cent share in furniture imports worldwide. A total of 10,476 importers shipped furniture to India during this period. The furniture market in India is mainly concentrated in A, B and C cities. It has been estimated that the top 784 urban centres contribute 41 per cent to the total consumer furniture market. A and B type cities together contribute 33 per cent of the total market.

Various segments

The most popular form of furniture in the country includes office furniture, bedroom furniture, kitchen and garden furniture and contract furniture in wood, metal, plastic, cane and bamboo. Popular items of exports are mainly a large variety of cabinets and cupboards, ethnic settees, beds, partitions, chairs, tables and other decorative articles.

The market for home décor, inclusive of accessories, hardware, furniture and furnishings is estimated at Rs 14.4 billion. At present, in India, there are two distinct trends, one is to get furniture imported from Europe, especially Italy and the other is a return to traditional handcrafted designs or antiques. Simultaneously, there is also an increasing demand for handcrafted furniture exports from India.

The wooden furniture segment mainly comprises artisan firms, while the metal and plastic furniture for offices and other professional uses is provided by organised sector. The organised sector has around 5,000 companies out of which 8 per cent are engaged in the production of wooden furniture, 10 per cent in metal furniture and rest 82 per cent are engaged in manufacturing accessories and furnishing items in plastics.

The office furniture segment is more advanced in terms of size and technological innovations and a large percentage of its production is exported. This sector has significant potential for earning foreign exchange since Indian furniture has high demand in foreign countries especially the US, European countries, Russia, UAE, Japan, Sri Lanka and Myanmar.

Why franchising?

Big companies like Durian, Godrej, V3 Engineers have added substantially to the furniture sector by introducing the franchising model. However, it is not only the big giants that have joined the race to reap the benefits by opting franchise concept but many small companies like Quetzel Design and Western India Ply are also opting for franchise concept now. The prominence of this segment has gradually improved and it now has very bright future both on domestic front as well from the export point of view.

R Guru Prasad, Director, V3 Engineers, says, “By opting franchise route the company can reach to a larger customer base as franchising helps in creating brand position for a company.”

Furniture sector has been experiencing a boom in the new economic environment, which has brought with it the changing pattern in lifestyle and household demand. Both big players and the smaller players realise the importance of franchising for distribution purpose. They feel that companies are now using franchise model to reach to largest customer base. P D Lam, Executive Director and President, Godrej and Boyce, says, “Franchising is very important in the present scenario. The company always believe that international quality and presence are important for growth and by opting for franchising, one can reach easily to every nook and corner of India as well as can establish its presences in international soil also.”

About franchising, Manish Parekh, Director, Nilkamal, further adds, “Even though the market is stagnant both in terms of value and volume, we still feel that there is a lot of potential. Therefore, we are trying to penetrate deeper and appointing a franchisee at small towns which has a population of at least 20,000 people.”

Franchisee role

A franchisee needs to focus enough to take up the challenges of the growing market. In case of furniture franchising, it is very important that the franchisee is able to find the right kind of shops locally. The franchisee has to understand well that it is not just the name but also the entire system that he is associated with. If he is not able to provide quality service to customers, the entire brand would be at stake in the town.

Manohar Gopal, Director, Sales and Marketing, Featherlite, says, “Experienced people with good inter personal skills, having good showroom space in a strategic location and with background from retailing building materials, office automation and hospitality industry are suitable to take up the franchisee of furniture companies.”

Today, franchisees play an important role in the expansion of any business. A person opting for furniture franchise should be familiar with the furniture market scenario. The investment required is Rs 70 lakh and above, with an office area of 2,000 to 3,000 sq.ft.

According to Chintan Doshi, Director, Tangent, “Franchise model is helpful because every company in its growing stage needs a lot of infrastructure, manpower and resources. Franchisees are the right resource and manpower which are required to take both of us, a franchisor and franchisee, ahead along with time.”

Major Players Durian furniture

The brand Durian comes from the Mumbai-based Dokania Group of Industries, whose flagship company is Durian Industries. The group, under the leadership of Lakshmi Narayan Dokania and Sajjan Kumar Dokania, is in the field of plywood manufacturing for the last 25 years.

The brand exclusively stocks a wide range of imported furniture from sofa sets, bunkers for children, computer workstations, centre tables, side tables, exclusive office furniture, study desks, dining tables, bar cabinets, bedroom and living room sets. The most coveted furniture styles from the US, UK, France, Italy, Australia, Spain, Malaysia and Singapore have made their way to India through Durian.

Nilkamal

Nilkamal Group of Companies, with a turnover of over Rs 500 crore, is known in the field of plastic moulded furniture. Their array of furniture products include a large variety of models in chairs, dining tables, coffee tables, cupboards, trolleys, shoe racks, multipurpose racks, baby chairs, stools, etc., which are highly popular in homes, restaurants, gardens, party halls, and other places.

The company has also diversified into lifestyle furniture business by launching ‘Home – the complete Home Solutions Store’ with contemporary readymade knockdown wooden furniture and home accents.

The Group`s manufacturing facilities include eight plants located across India. Of these, there are three in the west and one each in the north, east and south. These are all accredited with quality certificates like ISO 9001 and ISO 14000.

Kian India

Kian India is led by the Nepal-based Dugar Group. Kian specialised itself in making furniture for café, bistros, restaurants, hotels and offices. Kian has been successful in the market because it fulfils requirements in offering a large variety of contemporary furniture in wood, metal and polypropylene.

Style Spa

Headquartered in Chennai, Style Spa Furniture, a company promoted by the Zuari-Chambal group of the KK Birla conglomerate, was established in India in 1997 to manufacture and retail furniture.

The manufacturing facility located near Chennai is a fully automated sophisticated plant equipped to manufacture exquisite pieces of furniture. The plant is also one of Asia’s most modern plants with the largest manufacturing facilities. Style Spa is the retailer of furniture with over 90 exclusive showrooms across the country.

Godrej Interio

Godrej Furniture and Interiors Group have unified its home, office and special project business lines under the Godrej Interio brand. Godrej offers the Interio range of furniture solutions in wood, metal and composite material with specially designed software for online project tracking. Interio carries the expertise of design houses from Italy, France and India, coupled with a strong Godrej R&D.

Godrej Interio is planning to increase thrust on its range of home solutions and in the office segment and it also plans to enhance its offerings for the work place. The company is increasing its focus on niche segments like stadium furniture, health and hospitality furniture and corporate showrooms.

Featherlite Products

Featherlite has been retailing in India for the past 15 years and its first outlet was opened in Bangalore in 1987. It has a chain of outlets for exclusive retailing of a wide variety of office furniture through its 25 exclusive showrooms in Mumbai, Chennai, Bangalore, Delhi, Kolkata and Hyderabad. It manufactures about 20,000 chairs and 3,400 workstations per month and 35 per cent of the production is sold through its retail outlets and rest through franchise outlets. Its clientele includes some of the biggest names in the corporate world like Microsoft, Oracle, Intel, Star TV, Samsung, Mercedes Benz, IBM, Satyam Computers, Axa Insurance, Hughes Software, Motorola, Citibank, Global Trust Bank, 24/7 Customer.com and many more.

Featherlite’s one-stop-solution, Design Studio, offers office and home solutions. The company has a large in-house design studio, which houses professional designers working in tandem with customers to provide solutions in the areas of seating and furniture systems.

V3 Engineers

Established in 1990 by three engineers with a basic temperament of providing quality and innovative products that deliver value for money, V3 believes that everything a company does must reflect ultimately on a customer’s delight.

With continuous thrust on improvement and pursuit of quality, V3 has been certified with ISO 9001-2000 by DNV for design, manufacture, installation and servicing of modular furniture.

Tangent

Launched in April 2004, Tangent is a chain of sprawling showrooms that puts together every need of its customers from office to home. The furniture is gathered from around the world – Spain, Italy, Malaysia, France, and Hong Kong.

Tangent offers ergonomically designed contemporary seating, spacious desks, open plan office systems, and much more. All of these are designed to utilise space in an optimum manner and promote productivity.

Future Prospects

Foreseeing the growth of the sector, Doshi says that there is a metamorphosis taking place in Indian furniture market. As the individual’s disposable income rises, so will the demand for stylish furniture rises. The furniture business is already making a place for itself in the franchising sector and donning the market with traditional to modern franchising formats.

The medium and long term prospects for the furniture sector in India are positive. At the production level, the already numerous agreements and joint ventures between western producers and local partners are proof of the great interest shown by foreigners for an industrial reality that is destined.

Gopal says, “Future is very promising and this sector is growing at a very fast rate, organisations with strong infrastructure and service support will continue to grow at 20 to 30 per cent per year.” However, Gopal is very much speculative about small traders in this sector who are selling furniture manufactured in other countries. He opines “Small traders entering the business without a brand and promoting Chinese furniture may have short term gains, but shall not sustain the business in long term.”

Industry experts feel that Indian furniture market will be an important point of reference in Asia in the future. The continuous improvement in the living conditions of the local population, the refinement of tastes, greater interest in consumer goods and increasing contact with non Indian lifestyles are some of the factors that should induce western companies to regard the so far unexpressed potential of the Indian market with optimism.

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