With attractive and modular home décor offering high value addition and returns, the industry of home and lifestyle provides a lucrative business in India. Catch a glimpse of the big opportunities in this sector that is promising and proves profitable to
The retail sector has been always been the backbone of the India's growth story. It has evolved from traditional market places to resplendent malls and high end streets.
During the last few years, the Indian retail market has witnessed considerable growth in the organised segment of home décor and lifestyle. Both domestic and international players have entered the retail arena and have ambitious plans to expand in the future years across verticals, formats, and cities. For example, companies like Godrej, Evok, Hafele, Hettich, Wellhome, Zuari, Durian and others have strengthened the retail market of contemporary home furnishings. They have not only managed to create a base for consumer delight but have given a new dimension to interior furnishing and décor of the house. These brands are also investing considerably in the booming home and living sector while a number of foreign brands have also set up retail chains in collaboration with big Indian companies.
Market at a glance
Experts predict that the current Rs. 9300 crore organised home furnishing market will touch Rs. 1,12,000 crore by 2015.These figures indicate that home décor is emerging as one of the fastest growing segment, the market is currently Rs 9,000 crore plus and is growing at 20-30 per cent every year. The demand has further increased as more and more developers are coming up with retrofitted luxury apartments where they are offering myriad choice of home décor of international brands further boosting this market.
The Indian furniture market is worth about USD 8 billion today. Only about 15 per cent of this is contributed by the organised sector. In India, a growth of 13 15 per cent in the last two years has been witnessed and expects an upward trend in growth in coming years with economic recovery. While the market size of wallpapers segment is estimated somewhere Rs 1000 crore plus. Following the trend in the global market, India has started achieving more in this direction but much needs to be done to replicate the success stories of its counterparts abroad.
Hooked for opportunities
Godrej Interio, an Indian home furniture and institutional furniture brand is among the key players in the country that follows a mission of 'Enriching life by transforming home and work spaces.' The brand expects to grow at more than 25 per cent in coming years to reach Rs 5000 crore by 2016-17 and focuses on achieving excellence across value chains i.e. design, manufacturing and retailing mattresses and modular kitchens and their iconic home storage products.
“At Godrej Interio, we are looking for promising entrepreneurs who can take the Godrej Interio brand and experience to more and more customers and in that process create a profitable business for themselves. We have been in franchising for over four years now with many successful partnerships. Many of our channel partners have grown with us via multiple outlets across different cities,” says Subodh Mehta, Senior VP B2C business, Godrej Interio.
If studies are to be believed, the Indian home and lifestyle industry has grown remarkably with the change in lifestyle of people. In the last five years, there has been a noteworthy growth in the high-end home furnishings market. With so many international brands making their way to India via the franchise route, the indigenous customer or end user wants the best of the world and they are ready to pay the price too.
Marshall Wallpaper, a home grown brand is operational in India since 1975. It has 40 showrooms across India and targets to reach 100 counts by 2016 via the franchise route.
“Franchising is a mutually beneficial association between the franchisor and the franchisee. We truly believed in this concept of tying up with dynamic individual entrepreneurs under the umbrella of Marshall. The beauty of our franchise model is that the company completely takes over the administration and back office headaches of the franchisee giving him or her complete independence and freedom to concentrate on marketing activities to grow themselves,” says Karan Sharma, Director, Marshall Wallpaper.
Talking about home décor and modern furnishings, designer mirrors have taken a toll ahead in metros and tier-I locations. Blackberry Overseas, an integrated brand for designer mirrors and bathroom accessories has evolved as a new entrant in this category. “We are offering renowed products in mirror brands like Riflessi SRL from Italy and Deknudt Decora from Belgium. We offer the most elite and monopolistic range of mirrors that are in trend and demand in current home decor market. We are targeting metro cities only in which there is huge scope of distinct art mirrors with high end prices. Our franchise model is feasible and a low-cost model ranging from Rs. 10- 30 lakh while the gross margins earned are upto 60 to 100 per cent on the mirrors,” says Subbanshu Jaiin, Director, Blackberry Overseas.
Going forward, the organised sector's growth potential will increase due to globalisation, high economic growth, and changing lifestyle. Even small towns and cities are witnessing a major shift in consumer lifestyle and preferences, and have thus emerged as attractive markets for retailers to expand their presence.
Godrej considers delivering the best products and experience to each and every customer while ensuring the viability of the channel partners as their main focus areas to work on. Although the biggest challenge for Marshall, is changing the people mindset from paint to wall coverings as India is a traditional paint market and changing that is a challenge. For Blackberry, guiding the people about the importance of mirrors in the home interiors and decoration and how the use of decorative mirrors is the prime challenge. While second challenge for them was to convince the retailers and re-sellers about the scope of such an exclusive range of mirrors as it was the first time that some company introduced such an exclusive and vast range of designer mirrors in India.
Godrej Interio has entered into several tie ups with corporates to offer value to their stakeholders. Extensive training is given to franchisees in the areas of store management, product expertise, customer handling, selling skills, interpersonal skills and others. “From this year onwards we are organising a programme for our partners on business excellence to help corporatise their business operations and help them in making and implementing strategic business plans. We want them to grow their business 10 times in 10 years,” adds Mehta.
Meanwhile, Marshall Wallpaper boasts of having tie ups with corporates like Lifestyle, Reliance Retail etc to do their different stores across India. “All our franchisees have to undergo a one week training programme and a subsequent test which they need to clear with distinction to start their operations. The training includes technical, marketing and software training. Annual get togethers are also kept for annual updates of all the latest technologies,” asserts Sharma.
Blackberry Overseas are also supplying to interior designers and architects and design houses as well. “We are providing the support to our prospective franchisee from scratch to end. Even we help the franchisee after the store set up. We also help them in hiring the man power and their training for effective business,” says Jain.
Godrej Interio has two models of franchising depending on the city location and infrastructure setups in the city. The brand is looking for a well located, attractive and convenient property as well as an entrepreneur who is interested in running a home furniture business. Entrepreneurs who own properties in high potential areas has good business acumen, and who identify with the values and vision of Godrej Interio brand would be prefered. Their targeted cities for expansion are Mumbai, Pune, Ahmebdabad, Kolkata, Hyderabad, Chennai, Nashik, Nagpur, Patna, Ratlam, Indore, Bhopal, Rajkot, Vijayawada, Vizag, Kochi, Coimbatore, Puducherry, Mangalore, Jaipur, Dehradhun, Allahbad, Agra and Aizwal.
Marshall Wallpaper is today doing a turnover of Rs 40 crore with an expected turnover to reach Rs 100 crore by 2016. At the same time, the brand is increasing its retail footprint pan- India, preferring franchisees who can personally run the business as a sole focus. However, Blackberry Overseas are operational via 20 dealers currently, one flagship store in Delhi and Vadodra, respectively. The company is looking for investors having background in interior decor industry with their owned space available and targets to expand in Kanpur, Mumbai, Indore, Pune, Bangalore, Ahmdabad, Surat, Chandigarh, Ludhiana, Hyderabad, Chennai and Jaipur.
Major growth drivers for home and lifestyle sector in India:
— Changing consumer demographics is the major growth driver for home and lifestyle sector in India. Increased annual household income, coupled with the increased propensity to spend on lifestyle and consumer products has given an impetus to the growth in this industry.
— Another factor that has been a major contributor to this growth is the real estate/housing boom which has had a direct impact on increasing demand for home furniture products
— Changing attitude of people towards decorating their home and offices, architects and interior designers play a major specifying role.
— Unique concept, high returns, not having so much competition in terms of designs and concepts in mirrors and other decorative.