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Indiawood 2020
INDIAWOOD 2020
Bangalore International Exhibition Centre, Tumkur Road Bangalore, India 13th International Trade Fair for Furniture Production Technologies, Woodworking Machinery, Tools, Fittings, Accessories, Raw Materials and Products

Branded furniture players look to take on unorganised market

Branded players in the 50,000-crore organised furniture market are not competing with one another, but trying to grow the market for themselves vis-a-vis the unorganised sector. Branded players like Ikea, Godrej Interio, Pepperfry and Wakefit are expanding their online as well as offline presence to more towns and cities, as like other durable products, consumers have begun to replace their furniture also at shorter intervals than in the past.

Still, market share growth for them may be slow, considering that 91% of the market is with the unorganised sector, comprising carpenters and neigbourhood furniture stores.

Ashish Shah, co-founder and COO, Pepperfry, told FE that with Ikea and other international players coming in, there is “excitement” around branded furniture. “With a large portion of the furniture business still unorganised, my competition is not with Ikea or HomeTown or Urban Ladder… All of us need to get more from the balance 90%. Furniture was a boring category, but now it is becoming exciting. When Ikea opened in Hyderabad four years back, footfalls in two of my studios in Hyderabad went up by 140% in one year. And so did my business,” he said.

Executives of branded furniture firms said consumer behaviour is ch-anging; people no more want to keep a sofa for 10 years. There is a growing preference for vibrant furniture, and people want to buy something they can see, which is not possible with the neigbourgood carpenter.

Quoting a Redseer report, Swapneel Nagarkar, business head, Godrej Interio, told FE that the size of the furniture and home goods market in India in 2021-22 was $16 billion in terms of gross merchandise value, which is estimated to grow to $41 billion by 2026.

“There are very few branded players in this category and that gives us an edge. We (Godrej Interio) are growing at a CAGR of 15% over the last couple of years, compared to the market growth rate of 7-8%,” he said. Currently, with 450 exclusive showrooms and 520 dealer outlets, the company is looking to add 100 stores by March across metros and smaller cities.

Godrej Interio’s business grew 38% between FY21 and FY22, and it aims to clock `3,000 crore in revenue in FY23. According to Nagarkar, the company plans to grow over 25% in all product categories, and is also growing its e-commerce reach, from 23 cities to over 100 cities, by the end of the current financial year. This means deliveries can be made to more than 5,000 PIN codes. Also, by increasing the delivery points to over 300 cities, Godrej Interio is targeting a growth of 40% in its e-commerce sales, he said.

Wakefit, a homegrown direct-to-consumer brand that started off as a mattress and home furnishings company, has rapidly diversified into the furniture segment. The company has invested `100 crore to build India’s largest furniture factory in Hosur, Tamil Nadu, spread across 600,000 square feet. The new manufacturing unit has the ability to fully furnish almost 100,000 homes every month.

The company, which has opened 10 stores across Bengaluru, New Delhi, Lucknow, Pune, Chennai, Ahmedabad and Hyderabad, is looking to open 25 more. “These stores are planned as mega retail stores, with an average size of 3,000 sq ft, and are strategically located in areas with a high density of furniture retailers to drive organic footfall,” said Ankit Garg, CEO & co-founder, Wakefit.

Meanwhile, with five stores in India in Mumbai, Hyderabad and Bengaluru, and online presence in these markets as well as Pune, Ahmedabad, Vadodara and Surat, Ikea is looking at a steady growth, having committed to invest `10,500 crore in India. “Ikea is committed to India and has long-term plans to reach many more people in the different markets through omnichannel expansion — to be more accessible, affordable and sustainable. We welcome other players in the market and together we will contribute to the overall growth of the Indian home furnishings market,” said a company spokesperson.

Source: Financial Express


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