With changing lifestyles and rising aspirations, the furniture home and lifestyle market has finally caught up in India. Today the market is rife with the best of brands, both domestic and international. Anil Mathur, COO, Godrej Interio, chalks out how the women of this country have been and still are paramount to the growth of this industry.
More than 85 percent of Indian retail market is dominated and catered to by the unorganised sector. However with time, there has been a change in tastes and preferences of the consumers. As a result, the industry has moved towards becoming more organized. The organised retail sector currently accounts to around 10 percent signifying a huge potential market opportunity that is lying untapped.
Home décor is emerging as one of the fastest growing segment. The market is currently `9,000 crores plus and is growing at 20-30 percent every year. The demand has further increased as more and more developers are coming up with retrofitted luxury apartments where they are offering myriad choices of home décor of international brands further boosting this market. The Indian furniture market is worth about USD 18 billion today. Only about 15 percent of this is contributed by the organised sector. In India, a growth of 13-15 percent in the last two years has been witnessed and an upward trend in growth in coming years with economic recovery is expected. 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.
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 and they are ready to pay the price too.
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.
A decade ago, Indian consumer had a mentality of first saving for the future and buying only the bare necessities. However post liberalisation, the focus has shifted towards spending and living for the moment. With the growing younger population who are working, the trend has shifted towards improving the current standard of living and also to experiment more with luxury goods. The market size of the wallpapers segment itself in India is estimated to be around `1,000 crores plus. Who would have expected this two decades back?
The young shoppers are now equipped with higher disposable incomes, with credit cards, debit cards and loans at their command, and they are increasingly exposed to the shopping culture of the west. The emphasis has shifted from being just price conscious to demanding for more – design, quality and trendiness. Consumers have moved beyond the basic survival needs and non- basic needs have captured the momentum, especially in the urban and emerging cities. According to Indian Retail Report (IRR) 2011, the average Indian consumer has shifted from just 8 categories of products in 1991 to 19 categories in 2007.
In 2015, the furniture Market of India stood at $ 18 Billion, and it is expected to Register strong growth rate during 2016- 2025 due to surging middle Class urban population and increasing disposable income.
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 homes and offices where architects and interior designers play a major specifying role.Unique concepts, high returns, not having so much competition in terms of designs and concepts in mirrors and other decorative items.
ENTRY OF IKEA IN INDIA
Home furniture market of India has observed a steady evolution over the past decade with a shift in customer perception to choose organized brands instead of getting their furnitures made by the carpenters. The increase in knowledge about designs, wood materials and pricing schemes has propelled the Indian customer to choose more branded products. Destination stores however, will likely act as an attraction for a significant number of people as they would act as ‘one-stop-shop’ for furniture products with an added advantage of ‘touch and feel’ availability.
Even though the home furniture segment is highly unorganized, a number of companies such as Godrej Interio, Home Centre, Neelkamal, Durian and others have been eyeing to cater to the mounting demand of branded home furniture in the country. Thus, the growth of organized retail culture, rising real estate activities, increasing demand and rising e-retailing of furniture in the country are expected to contribute substantially to the market growth in the coming few years.
The furniture market of India is expected to register strong growth rate during 2016-2025 due to surging middle class urban population and increasing disposable income.
IKEA is coming at an exciting time in India, especially when its furniture space is buzzing with activities. The home furniture industry in India is estimated at 65 percent of total furniture market, of which online takes up around 250 million.
The world’s largest furniture retailer IKEA is one of the first companies in India to get approval for setting up 100 percent FDI in single brand retail. We surely see IKEA entering the Indian market as an important event. It will have a big impact for every Indian player. But on the flip side, the market is 85 percent unorganized; hence there is enough space for everyone to stretch by organizing the unorganized part. Also with the IKEA in the picture, the overall competitiveness of the market will increase which will lead to better offerings by every organized player to stay relevant. With this, the users will truly benefit.
Given the size of the market and the format in which different players are working, IKEA entering India will have different effects on different players.
ROLE OF WOMEN FROM AN APPRECIATOR TO A PARTNER TO A CREATIVE LEADER IN THE HOME FASHION DECISION MAKING PROCESS
Today, a woman’s role in society has far transcended that of a homemaker; she is now a primary decision maker. Her opinion is absolutely pivotal to decisions centered on everything from healthcare and banking to electronics, automobiles and the environment. What’s more, a signiﬁcant amount of erstwhile male- targeted companies have realigned themselves to target women, owing to the sheer purchasing power that they yield. Women drive 70-80 percent of all consumers purchasing, through a combination of their buying power and influence. Influence means that even when a woman isn’t paying for something herself, she is often the influence or veto vote behind someone else’s purchase.
Retail is undeniably the industry with the largest female customer base. Be it department stores, supermarkets or apparel stores, every piece of communication they disseminate mostly refers to the customer as ‘she’ irrespective of the product category. Women have begun to realize that as the primary drivers of the consumer side of retail, it makes logical sense for them to drive the business side of it too and create a conducive environment that will inspire more women to join the industry. Retail is witnessing the rise of a new breed of women who are surmounting every challenge, assuming C-suite positions and leading by examples. By doing so, they are serving as beacons of hope for women across the nation who aspire to build successful and fulﬁlling careers in retail. Also, women entrepreneurs are benefitting immensely from favourable government policies, training programmes and access to ﬁnancial support and working capital.
Women generally look out for lively, energetic and contemporary patterns and designs and hence, brands have recently introduced possibilities of having personalization in our furniture, right from fabric prints on sofas, to engravings on wooden furnitures, to pattern prints on steel cupboards, a plethora of options are available keeping in mind the changing tastes of women.
Working women generally look out for multi- functional furniture which can ease their day to day life. Features like hot plate inbuilt on dining tables, easily re-configurable sofas as per the requirement, remote controlled lift up mechanism of beds, modular wardrobes with add-on units, storage options on the side of the bed, mobile units as the side table, etc. forms the core of our designs keeping in mind the multi-functional requirement.
SOLO MALE PURCHASES VERSUS COMBINED COUPLE PURCHASES VERSUS SOLO FEMALE PURCHASES
Home décor and furniture buying is a family purchase wherein male drives decisions regarding functionality and features while female of the house drives the decisions on overall look and feel and other softer aspects. We have seen key decision makers split between male and female as 60:40 percent whereas it was different twenty years ago. Women’s involvement in the decision making process was far lesser than to what we see today. Also, we see 85 percent of our customer base walking into the stores being couples and families, while only a handful being bachelors/ only male or female walk-ins.