“With the boom in housing sector, and the ever increasing millennial customer base with higher disposable incomes, the category is seeing a growth of CAGR 25% (YoY) for the past four consecutive years, says Sitaram Kumar, Senior Vice President, Home Centre
A veteran in the home furnishing market, who has deep experience of top retail brands such as Bombay Dyeing and Shopper’s Stop, Vikram Chitnis, is glad to notice that the Indian customer is becoming more discerning by the day. Talking on phone with HTA Indoor magazine correspondent from Mumbai airport before take-off, Vikram Chitnis wants to make sure he’s quoted in his personal capacity and not as a spokesperson for his past or present employer.
Talking about the biggest change in the domestic industry for home furnishing retail, Chitnis is pleased to see the number of product innovations that have hit the market in recent years, such as anti-bacterial bed sheets; fire-resistant and black-out curtains; mattresses in all sizes; AC duvets.
“There is a product to satisfy every customer need, and Indian consumers are now seeking more value from their purchase,” he says. So while earlier the Indian customer was more price-seeker. Today she is more value-seeker also.
Asked which format is likely to grow faster, large or small, Sitaram Kumar, Senior Vice President of Home Centre, says, “Everyone will have the opportunity to grow in the market be it online-offline or large or small format stores, provided one understands consumer behaviour and creates a niche for themselves.”
The market, according to Chitnis is largely disorganised and fragmented – nearly 80% of it is crowded by Mom and Pop-kind of outfits. And it’s difficult for brands to match them on price, so brands are more focussed on quality and packing more value into that price package. Customisation is part of that trend.
“Since, the unorganised sector still dominates the home textile market, it’s important for the government to identify vendors and provide support enabling them to establish themselves as organised players,” says Kumar of Home Centre. Traditionally, the fast moving home furnishings categories were bed and bath linen. These still continue to take the lead. “But lately, curtains as a category is seeing huge traction compared to bed and bath,” says Kumar.
The popularity of digital prints, according to Chitnis is a passing fad, even though presently it’s a very hot trend. “Down the line, customers are going to expect more functional features from their brands, rather than just aesthetics,” he explains. As for the ideal store size for home furnishing outlet that are typically large-format, he says “While the smallest can be as small as 2000 sq. ft. in India, the larger ones are 10,000 sq. feet, which is ideal for displaying the full range, and leaves plenty of room for customers to roam around.”
The lease model is popular, along with the revenue-share model with the builders. “With the realty prices shooting through the roof owning a store, unnecessarily raises the cost and risk of the investment”, he says. An average customer for the brands is 32 to 40 year old from Tier A and B markets. Tier C is not yet developed. “In the coming years,” according to Kumar, “Retail space would become more competitive due to the entry of global players like IKEA. Additionally, it is important for retailers to start exploring Tier 2 and Tier 3 cities to increase their foot print,” says Kumar.