Innovation and multi-channel distribution are the hot buttons for growth in the home textile market in India
The times are e-changing for the home textile industry in India, slowly and notably.
A bunch of Indian traders on a business visit to the US recently, stumped a blogger with, “Why doesn’t JC Penney have a Sephora spa collection of sheets and towels?”
Everyone knows that Sephora is a French cosmetics company and JC Penney, the US retailer is desperately looking for margin improvement with increased footfalls. One way of doing that would be by mixed display of home, apparel and jewelry categories at big format stores.
But this trend of mixing home furnishing with beauty products is not just limited to retail. At the manufacturing level too, brands like Indian Drape, RR Décor, F & F, Maspar, Goldtex, Birla Century and Swayam, are taking long strides into profitability with the introduction of exciting new, innovation-led value-adding features into their product line, such as moisture soaking, providing thermal control in bed linen, a finish that has calming properties for sensitive skin; a fiber that is naturally elastic and a 100% hypoallergenic bedding system with anti-wrinkle features, the Indian consumer is slowly getting there, and is hungry for more!.
Along with solar, magnetic and automated curtains, there are now self-disinfecting smart carpets to woo double-income Indian customers.
The evolving lifestyles of the Indian consumers and the stretch in their purchasing power have created a huge demand for upper-end soft, skin and environment-friendly home products, leading to a complete re-organization of the industry. Young working couples are now on the active look-out for the best features, functional as well as aesthetic to come across as trendy to their peers and folks. Many large format retail stores, multi-brand outlets and ecommerce stores are well-poised to cater the growth of this market. Their range covers categories such as bedspreads, bath linen, curtains, furnishing fabrics, carpets, table covers, and other furnishings.
The Indian trade
At present, India is the one of the largest suppliers of home textile products, second only to China that has cornered a whopping 39% share of the market. However, increasingly a few progressive Indian companies have started gaining an edge over their Chinese counterparts by leveraging the gaps between the easy availability of raw materials in India and the increasing costs of labor in China. In addition, world-class manufacturing facilities, stringent quality control procedures, and product innovations have made many Indian companies, such as Welspun, Trident, and Dicitex, to cite a few, cost-competitive, as well as quality-conscious in this space.
Yet, despite the rise in demand, home furnishing consumption is growing only of 15% per annum, against the actual potential of 20% to 25% growth. This potential can only be realized with matching growth in retail infrastructure and the establishment of a robust supply chain, feel market observers.
Bed Linen – growing from a small base
Bed linens, especially cotton ones, are currently among the hottest traded category in export market. The biggest consumer for Indian bed linen is the US. Next come Germany, Netherlands, Canada, Australia, and Spain, in that order.
While Bombay Dyeing still commands volumes in cotton bed linen, its dominance is gradually being challenged by others like Portico, Kurlon, Spaces, Trident, Swayam, Tangerine, and Maspar.
However, the home textile market In India is still far from organized and still cluttered by a number of non-branded bed linen makers, spread across the country.
About 70% to 80% of the domestic home textile market is still unorganized,” Rajinder Gupta, the Chairman of Trident Group told media persons recently. Large players don’t have a significant market share. We are globally competitive but in the domestic market we still face distribution channel issues.”
The onslaught of online retailers especially in the bed linen market has only made the competition worse for small players. On the flip side however it’s preparing them for the next level of intensive marketing.
“Branded products in India comprise just 2% of the market. But since the New Age Indian consumer is now aspiring high quality, branded products across categories, good brands will become very popular in the coming years,” Vijay Agarwal, Chairman, Creative Portico.
Creative Portico is currently growing at the rate of 30% to 40% per annum. Reports are rife that the brand is on its way to launch an e-commerce option to gain maximum traction. They are also working on expanding their portfolio in bed linen to stay relevant in the competitive market.
Spaces is another brand that is taking the innovation route to growth. Apart from bed linen, they are also into towels, comforters, rugs, throw mats and area rugs. They have declared plans of launching a new range of mattress protectors and pillow fillers.
“Marketing and branding activities in proper channels is important for the survival and success of the home textile companies in the domestic market,” said Dipali Goenka, Managing Director of Welspun Global Brands Ltd., in a recent magazine interview
Handmade carpets and rugs still to make a mark, domestically
Carpet weaving by hand is what India has always been known for, from ages now. But with the economic conditions weak in most Western countries the demand for Indian handmade carpets abroad has begun to plummet. This has led exporters to push up their sales in the domestic market to stay viable.
However the biggest impediment in their path is price. As an average Indian shies away from premium branded products, unless he/she perceives a decided value-add in these products, e.g. features like wash-friendly, odour-free, long-lasting, colour fast etc.
“The demand for handmade carpets from India are battling it out with the machine-produced carpets from other developed countries,” said Aditya Wattal of Chinar International.
As against machine-made carpets hand-knotted carpets woven from natural fibers, such as wood and silk are skin and environment-friendly. Suitable for day to day usage, they are also easier to wash and score high in terms of comfort and performance.
Variety sells furnishing fabrics
Innovation is the name of the game for Indian brands facing the heat from their Western counterparts.
“The perception and outlook of the home textile industry needs to dramatically change,” said Navin Kanodia, the MD & Interior Stylist of SPACIO, a New Age Indian brand that markets its bed linen, towels, comforters, rugs, throw mats and area rugs to the UK, the US, Germany and Australia. “It’s still not open to innovation and experiment. Indian designers have a lot of potential to market themselves globally. But a lot of effort needs to be made towards marketing and promotion.”
However it’s not just the brands that people look for, while buying furnishing fabrics for their homes. They also want products that go well with their interiors. For that perfect look, price is not necessarily a deterrent. Over flooding the market with Me-too, knock-offs is not an option as that too dents retail margins.
Way to go forward
There will always be a market for home textiles as long as there are people living in homes. Despite competition, there is plenty of opportunity for Indian brands to fill in the demand-supply gaps, both in India and abroad. Understanding consumer expectations, analysing competition, and adapting to the changing needs of the market, as quickly as possible, are a few things the players will have to focus on, if they want to stay salient in the home textile market for long.