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Dec, 03 2014

Foremost & fabulous in furnishing

As per Technopak estimates, the Indian home décor market which stood at $13 billion in 2010 will touch $20 billion by 2015. Furniture, lifestyle and furnishings sectors are witnessing a huge scope and acceptance among consumers. Let's know about the top n

Currently, the furniture and home decor market is quite fragmented with unorganised sector having 85 per cent market share. But, with growing emphasis on quality and service, the organised sector is shaping up and will evolve significantly in the coming years. Demand and desire for stylish and comfortable furniture has become a prevalent trend in India these days. Not only house owners but corporate people are splurging to have the designer and sophisticated furniture as per their requirements. The furniture, furnishings and Décor sector is definitely offering great opportunities to the investors. With evolving lifestyle and changing taste of the customers, there is a preferential shift from local carpenter made kitchens to modular kitchens, offering an opportunity to grow at an exponential rate. With evolving lifestyle of the consumers, there is a demand of organised kitchen spaces in metros and the same has also percolated to tier II and III cities generating high demand for modular kitchens.

From modular kitchens to home furnishings to wall coverings, TFW enlists retail brands into home & lifestyle which have witnessed great growth in the year that has just passed by and offer a great potential for investors in the coming year too.

Fab five trends:

  • E-commerce has emerged as a significant channel in the industry.
  • Smart packaging leading to the growth of industry.
  • Modular Kitchen sector evolving as a major performer
  • Office furniture segment is rising fast with developing economy
  • The home furnishing industry is greatly influenced by traditional motifs and designs. These greatly appeal to modern clientele who are increasingly adopting a modern lifestyle but are still attached to their roots.

Godrej Interio

A well known brand from Godrej Group, Godrej Interio is expanding profitably via franchise route. The brand opted for franchising because of the faster pace of expansion and deeper penetration it provides and also the fact that there is a lower investment on the part of the Master franchisor. Other factors being, distributing the risk of retail and also the benefit of entrepreneurial skills at store level.

Subodh Mehta, VP Marketing, Home products, Godrej Interio says: “Home décor is one of the big sectors in retail and franchisees can command a decent margin. With the evolving tastes of the traditional customer segments this market is on a growth path. The large housing sector (New constructions as well as renovations, festivals, weddings) ensures a long term customer base.”

Franchise facts

Investment: - | Area: 10,000 sq.ft

RoI: 25%  | Breakeven: 2-3 years             

Current presence: 1000+stores 35% franchisee run

Nesta from CenturyPly

Most players in the industry would agree that the key to profitability in the furniture retail could be in how you administer high rentals in most of the cities. Sumit Dutta, CEO, Nesta opines: “A franchisee is able to add local flavour in the business as he would know customers through local contacts and would be in a better position to advice for the growth of business.” As per the brand, changing consumer demographics, tourism and hospitality industry growth, scarce availability of skilled carpenters etc and increasing migratory population can also be attributed as the drivers of the industry.

Franchise facts

Nesta Modular Kitchen

Investment: Rs 20-25 lakh | Area: 800-1000 sq ft |

RoI: 100% in 1st year | Breakeven: 1st year

Nesta Furniture+ Modular Kitchen

Investment: Rs 50-60 lakh | Area: 3500-4000 sq ft |

RoI: 40% in 1st year | Breakeven: Full service 2-3 years |

Current Presence: 17

Hafele

Hafele makes a promise to provide world leading products to its customers. The brand started its exclusive Hafele studios together with its franchisees. When it comes to furniture and door component players like Hafele, the franchising concept is still maturing and has a long way to go. Jurgen Wolf, MD, Hafele India Pvt Ltd says: “When we started with our franchise concept, there was practically no one in the market who had done so; making us the pioneers of the franchising concept in this market. The very reason to get into exclusive franchise partnerships was because we were not getting an exclusive brand space among crowded dealer outlets. Hafele is not only about innovative products but it also stands for holistic interior solutions and ideas.”

Franchise facts

Area: 500-3000 sq.ft

Breakevent: 18 Months

Current presence: 60+

Marshalls

Marshalls Wallcoverings is reckoned as the top brand in the wallpapers sector. For the brand, franchising is a good route of tapping the market especially if one gets dynamic franchisees. Marshalls provides them the infrastructure and brand name to build their success on.  With more and more people joining hands, the sector and industry is bound to grow. Karan Sharma, Director, Marshalls Wallcoverings says: “We offer the franchisees to associate themselves with us and reap the benefits of working under one umbrella thereby giving huge advantages like networking, one price, quality etc.”

Franchise facts

Investment: Rs 7-10 Lakh | Area: 200-350 sq.ft

RoI: From the 1st year  | Breakevent: Sale of 4 lakh in metros and 2.5 lakh in tier II |

Current presence: Total 46 | Franchise 38

Evok

Rapid globalisation can be attributed as one of the key drivers for the furniture sector. With increased spending power, the furniture, furnishings, lifestyle and Décor sector is set to enlarge fast. Ajay Seth, COO, EVOK- HHRPL (Hindware home retail Pvt Ltd) says: “Major growth drivers in our industry are Increase in the number of residential projects, high disposable income, change in demographic structure, and also growth of the Hospitality sector. Most of the modular kitchen players are growing through franchise route as it is an effective way to reach out to a larger customer base. We understand that local potential of the market is well understood by a potential business partner. At the same time we get more footprints along with bringing an opportunity for our partners to grow, as we grow.”

Franchise facts

Investment: NA | Area: NA

Current presence:

Company-owned: 19

Franchise: 11

TTK Prestige

TTK Prestige, a leading brand in the Kitchenware category stands for reliability, durability and value for money. K G George, Senior Vice President, TTK Prestige Ltd says: “With 'Prestige' franchisees can be rest assured that they can never fail.  Our objective is to cover every town with a population of one lakh plus in the next three years and we are progressively working towards that. We prefer single unit franchisees as we are looking for someone to drive the business. Every franchisee staff / franchisee gets trained at least twice a year. We have a three day training programme with one day for product training, one day for training on software, commercial, marketing initiatives etc and third day on soft selling skills by an exclusive trainer.”

Franchise facts

Investment: Rs 10-25 lakh

Area: 400-1,000 sq.ft

RoI: 24-36%

Current presence: 575 stores across 300 towns

 

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