Branded products have now started to throng the largely unorganised Indian furnishing sector. With the sprucing up of domestic brands, a few international brands too have made foray. And the development is going to continue.
Organising the unorganised retail market of home furnishing has started a few years back. Earlier, Bombay Dyeing was the only brand that has a chain of retail outlets across India, but now with the ever growing size of the market, estimated at Rs 15000 crore in 2007, the segment is emerging with every potential sign to flourish. The fast evolving market of India has seen the entry of lots of foreign players and the furnishings segment is not left behind. The urban home furnishings retail market is estimated at Rs 9300 crore and growing at 30 to 40 per cent. The upholstery market is currently estimated to be Rs 2,000 crore, which is 22 per cent of the urban home furnishings market in India. Only 6 per cent of the home furnishings market is currently organised. Most of the organised players are focused on the bed and bath segments.
With dual income households on the rise by 2.5 million every year and the average age of a home owner falling from 40 to 27 years, an increasing spend on home textiles is inevitable. A report from KSA Technopak has revealed that more than $25 billion is going to be spent on home textile in India in the next five years.
Foreign brands in India
The apparel and home furnishings exporter Creative Mobus Fabrics Pvt. Ltd was the pioneer in bringing the leading international furnishings brand Portico from New York through licensing arrangement in 2004. Portico being a premium brand, Creative introduced the Home Expression brand from the US in 2006 to tap the mass market. The group also owned the exclusive licence for the Tommy Hilfiger home textiles and furnishings range in 2007. Creative also has non-exclusive licences for a host of characters from Star TV, Disney, Mattel, Marvel, Nick and Cartoon Network.
In 2006, Gujarat Heavy Chemicals Ltd took over the UK based furnishings giant, Rosebys. Rosebys Interiors India started its India operation in October 2008 with the launching of six outlets in Punjab and Chandigarh. Rosebys stores would cater to five categories, comprising bed, bath, window, accessories and personal care. Speaking about what actually beckons foreign brands in India, Nikhil Sen, Director, Rosebys Interiors India opines, “Large market constituting young population that is willing to innovate and adopt quality lifestyle, in addition to nuclear family concept with working women who are more independent in making their choices for home décor are some factors which are drawing more and more international brands to India.”
Being a premium brand, Tommy Hilfiger Home product lines are of high-end prices, e.g., a double bed sheet set costs above Rs 3000, whereas a double sheet set from Portico brand will be between Rs 1000 - 3000. Creative uses kids characters to cater to lower to upper segment, informs Rajiv Merchant, CEO, Portico India. Fabrics used are of international standard like high thread count 100 cotton sateen for bed sheet. All the brands from Creative`s stable bring out two major collections in a year on the basis of themes that the target audience can connect to. Like this year Portico shall be launching India Pop collections, and it already had a pre-diwali launch of Supernature Series 2 and Dream Catchers collections by leading Indian fashion designers. Rosebys being a premium luxury brand will cater to top-end customers. Bath sets from Rosebys range between Rs 430-2230; for bed linen and other soft furnishings, it is Rs 900 to Rs 7000.
For young ones, Portico offers product lines with licensed comic characters. For the youngster, it has MTV, Portico Forever Young collection, Hannah Montana and High School Musical. Portico and Tommy Hilfiger have proved to be popular among those between 25 and 40 years of age. For the seniors, offerings from Portico take care more of health issues besides design aspects. Some unique collections include Therapeia health collection and i-bedding. Rosebys being a premium luxury brand will cater to top-end customers, especially modern homemakers and working couples.
Business expansion plan
Rajiv Merchant of Portico reveals, “We plan to increase our presence substantially in tier II cities and are targeting a turnover of Rs 100 crore on MRP for the financial year 2008-09 in the fifth year of operation for the domestic business division. Portico happens to be the fastest growing soft furnishing brand in the Indian market for the last 3 years and has won various awards including `Best Homeware brand 2007-08` by Shoppers` Stop.”
Rosebys is going to pump in Rs 150 crore for the brand building task and will be eyeing a turnover of Rs 400 crore in the next three years. After opening stores in Punjab and Haryana, in the second phase Rosebys will step in the markets of West Bengal, Andhra Pradesh and Karnataka. The company also has plan for overseas expansion in countries like Hong Kong, Singapore and Thailand.
Franchising as expansion mode
Portico India has one franchised outlet and 160+ shop-in-shop corners. Presently, the company is planning to increase its footprints to five franchised outlets and 200 shop-in-shop corners in the current financial year.
So far, Rosebys has opened six outlets in India and all of them are franchised. For the franchised outlet having 800 – 1200 sq.ft of area, the investment requirement is Rs 20-25 lakh. The preferred locations to set up these stores are primary and secondary markets in a city and shopping malls. “The franchise business model helps in rapid access to customers in shorter span of time and local franchisees provide us with better comprehension and knowledge of the market,” comments Sen.
Foreign companies eyeing India
The French company Guy Degrenne, known for its super quality tableware, table linen and kitchen linen, have signed a master franchise under the name “Degrenne Paris” in the Middle East (Kuwait, Dubai, Abu-Dhabi, Turkey) and in Asia (Singapore, Jakarta) in particular. During 2008, the Guy Degrenne boutique network will have 60 points of sale, informs Jacques Morand, EVP Franchise Development Worldwide. Guy Degrenne is also keen to have franchise associates in India and we can hope Degrenne Paris to be present soon in the Indian market. The speciality of Guy Degrenne`s outlets is its aesthetically decorated boutiques. These boutiques evoke an ambience of market stalls for its adeptly designed interiors.
The Spanish soft furnishings company, Textura Interiors, too is eying the Indian market. The company is owned by the leading Spanish bank BBVA. The company is on the lookout for a franchise partner. Textura Interiors has a well-defined franchise support programme that includes seasonal product selection (July and February), senior management support for franchise development, VM support and guidelines and others in the line.
The Indian furnishings market is largely unorganised. The Rs 5,000 crore organised market offers ample scope to innovate for offering anything unique. All these international brands too are harping on this note to grab considerable market share besides domestic brands. Portico has introduced product lines Therapeia health collection- i-bedding, a unique concept for hygienic lifestyle. Similarly, Rosebys Interiors has positioned itself as a lifestyle brand with wider brand portfolio wherein furnishings is just one of the elements. Guy Degrenne`s boutique concept is sure to win the appreciation of many. So, it is all about the USP of the brand that positions it with differentiation.