CP Furniture

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India, the worlds eighth largest consumer base, boasts an organised furniture industry

estimated at US$8b, growing fast. In this months instalment of the Global series exploring

the worlds key furniture markets, Sylvia Khan, from leading Indian magazine IFJ, reveals

the trends that are shaping Indias domestic and commercial interiors markets

Indias interior industry is heading towards high-end, low maintenance, quickly installable pro-ducts, with customisation options to cater for the specific needs of elite clients. With new pro-ducts and designs being introduced every other day, the client today has an enormous range ofoptions when designing a space, making the industry more consumer-centric.

Heavy, complex furniture has been relegated to the annals of historythe practical client todayis looking at straight-lined, simple, contemporary designs. Srikanth Srinivasan, CEOinteriorsdivision, Sobha Developers, Bengaluru, says: People used to engage carpenters to come andfurnish their houses, but that is changing now.

People no longer wish to hand over the jobs to carpenters and chase theminstead they are loo-

king at more professional options like Big Bazaar and Home Furniture to cater to these needs.However, what India now needs is a major furniture retailer like Ikea, where one can buy highquality furniture from.

Raghunath, managerprojects, Innerspace, from Hyderabad, adds: The way Indians used to as-sociate themselves with teak wood furniture is not much in demand compared to 10 years ago.People are interested more in look and functionality. Plywood and MDF sell right now, and im-ported furniture has come very much into vogue.

Furniture today is designed with a primary focus on functionality, and is preferably factory- orready-made for a better finish and quicker delivery.

The segment of consumers with unique tastes in design and material have access to design-basedofferings that are increasingly popular. Pooja Malhotra and Gopika Parekh, designers workingfor The Fuchsia Lane, Mumbai, believe that each Indian house has character and a story to tell,and find that people are open to ideaslike mixing different designs and patterns in their interi-ors, fusion in materials and design, and a blend of classical and contemporary.

Knowledge of the client in terms of preferences in new products and designs has urged the mar-ket to provide the latest and best-quality products, on par with international standards.

Harshal Shinde, owner, Wudcraft, Hyderabad, says: Client awareness puts a reverse pressure on

the seller to upgrade his products and meet the demands in the market in terms of quality, durabi-lity and finish. Initially it may result in a certain amount of monetary loss, but in the longer runwe cannot forget that we are here to make good things and not just money.

Complex furniture has been relegated to the annals of historythe practical client today is loo-king at straight-lined, simple, contemporary designs


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Due to the current revolution in the working environment, the furniture in this segment has chan-ged considerably. Most companies today are shifting to a modern organisation culture and loo-king at flexibility and comfort as two major factors when designing workstations.

Manohar Gopal, director, Featherlite Group, Bengaluru, says: If you look at the trend earlier, it

was more cubicle-based design. Today, people are looking for more openness in the office, andlowering wall heights. They want to go green, so partitions are made open from below for properair circulation, and steel is being replaced by particleboard and MDF, as steel absorbs energy andair conditioning.

Speaking of the current change in the working culture, Kartik Shethia, national sales manager,Herman Miller Furniture (India), Bengaluru, says: The trend is moving towards the mobile offi-ce. Unlike earlier times, when every individual had their specific workstations, anybody can co-me into the office and work on any available workstation because the trend is towards a sharedoffice scenario, where people are travelling or working from home. We have seen some largecorporates moving in that direction, and it is definitely the future of office furniture.

Anil Vakde, business development manager, Haworth India, Bengaluru, adds: We are designingto cut down the use of space. Designated spaces such as workstations and closed office and rec-reation areas was the earlier trendnow the idea is to try and use all the areas for your work, soyou have portability and flexibility. This is the typical future trendfrom big luxurious work-stations to more functional and smaller spaces.

Fabrics

The design of a space is an expression of personality and style. Drapery and upholstery play animportant role in uplifting the visual aesthetics of any given space. The use of fabrics changes

with season, trends and customer preferences.

Monica Kamal, owner, Megamode International, New Delhi says: Changes in the fabricindustry are constant. Buyers are conscious when it comes to selecting for their homestheywant their selection to be the latest in terms of trends, while meeting the look that they desire atthe same time.

She adds that there has been a complete change in the thought process of the userthey areexperimenting with new colour schemes and designs with a certain level of dynamism anduncertainty.

Demand for newer styles with colourful abstract and printed patterns has been observednationwide. While deciding on the product, users consider factors such as durability of the fabric,comfort level and maintenance cost. Devesh Sharma, partner, Studio Zynna, Gurgaon, says:Architects act as the main clients while deciding on fabrics, as the end-user is highly influencedby their recommendations. A major chunk of our business operates on the high net incomesegment of society, who regularly demand a change in their fabric needs over a period ofapproximately three years.


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Lighting

The importance of lighting in defining ambiance is uncontested. However, industry members saylighting is not usually a priority in the overall interiors budget. Ditul Mehta, director, LightSquare, Bengaluru says: Lighting comes last in any project, especially for residents, so it

depends on how much money people have left to spend.

Amith Mehta, CEO, Light Art, Chennai, adds: We provide a few high-end brands for some keyspaces, and balance it out by giving some budget brands for other spaces for people who have alimited budget. The more products you show them, the more they get exposed and open up tonew ideas. People are still learning about the industry.

The high cost of LEDs, when introduced, made them impossible to incorporate in budget-constrained projects. But today, as costs have subsided, people are showing significant interest inLEDs. Dilip Kumbhat, MD K-Lite Industries, Chennai, says: LEDs are quickly taking overCFLs as they are energy-efficient, compact, better designed, and have come out for various

applications. The architects also dont want to use the same products in different projects theywould like to use new designs wherever possible.

For the next five years, furniture sector output is expected to grow by 15% per year

According to a study by the World Bank, the organised international furniture industry is expec-ted to grow by 20% each year, and India, Brazil and Russia will witness a boom. The brandedfurniture market, comprising residential and commercial furniture, was valued at US$1.3b in2008, and was expected to reach US$3.7b in 2012, according to a report by KPMG.

The boom in the Indian furniture industry has got a lot to do with the growing housing and tou-

rism sector. So much so, that for the next five years, furniture sector output is expected to growby 15% per year. Currently there are only 10,500 furniture importers in the organised sector, andthey mainly import from Italy, Germany, Spain and Malaysia, according to Economy Watch.

India today

According to India Now! More Than Ever, a report by Index Media Consulting: India is rankedeighth in terms of consumption in the world. The organised furniture industry is estimated ataround US$8b and is expected to grow at a Compound Annual Growth Rate (CAGR) of about25-30% annually. The modular furniture market in India, estimated at about US$160m, isdominated by bigger players such as Godrej and BP Ergo.

The market size of the international range of premium furniture is estimated to be worth aboutUS$20m, and is serviced by foreign players. The current imports are mainly from Italy,Germany, Spain, China, Korea, Malaysia, Indonesia, Philippines and Japan.

The furniture market in India is mainly concentrated in A-, B- and C-class cities. It is estimatedthat the top 784 urban centres contribute 41% to the total consumer furniture market. A- and B-type cities together contribute 33% of the total market.


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There are about 5000 firms in the domestic organised sector, and nearly 10,500 importers offurniture. India imports around US$150m worth of furniture, growing rapidly and catering tourban, affluent households.

Indias major players include furniture retailing giants Pantaloon, Shoppers Stop, Trent, RPG,

Vishal Retail, Reliance and Tata Group. Industry names to watch include Godrej & BoyceManufacturing Co, BP Ergo, Featherlite, Haworth, Style Spa, Renaissance, Millenium Lifestyles,Durian, Kian, Tangent, Furniture Concepts, Furniturewalla, Zuari, N R Jasani & Company andPSL Modular Furniture.

In terms of furnishings, the Indian home furnishings market is estimated at $3.5b and isexpected to reach $5.6b by 2015, the report continues. The luxury furnishings marketcomprises 3% of the market and is growing at 25-30% per annum.

Whos buying? India has seen a shift in consumer profile for luxury furniture and furnishings.Earlier, the main clientele were the usual suspectsindustrialists, Bollywood celebrities or

luxury hotels. But now, CEOs of multinational corporations and banks, real estate barons andwell-heeled socialites are the new consumers of luxury.

Key Indian brands include Rosebys, Ddecor Home, Dicitex, Maishaa, Address Home, Onset,Ishatvam and Zaza Home. The key international players in India include Pottery Barn, Macys,Ethan Allen, Zara Home, Bloomingdales, Brun de Vian-Tiran, Versace, Corneliani and FendiCasa.

Critical success factors

CRITICAL SUCCESS FACTORSQuality of raw materialThe furniture industry in Pakistan is dependent on the quality of theraw material available.Although high quali ty wood is abundant inPakistan but many times customer complaintsarise due to the useof cheaper and low quality wood by the manufacturers. It has to bee n s u r e dt h a t f u r n i t u r e d i s p l a y e d i n S h o w r o o m i s m a d e o f h i g h quality wood.Attractive Design and Quality FinishingThe life style of the people is improving and they are getting morequality conscious. New tastesand designs are being adopted by thepeople. Special attention should be given to present latestdesignsaccording to local market demands & requirements. New designsand styles canbuild brand equity for the business. As there is highco mp et i t i on i n mar k et , c re a t io n o fnew designs and styles, andsetting new trends is vital. As this proposedshowroom business isexpected to target high class, it is likely to attract peopleliving inp o s h a r e a s o f G u l b e r g , D e f e n c e a n d M o d e l T o w n e t c . a n dt h e furniture should be able to fulfill their special needs. It is thereforemoreimportant that furniture should be of latest design, accordingto n ew f as h i on an d b ea ut ys t anda r ds t han mer e du r ab i l i t y and hardness. We dont undermine the importance ofdurable furniturebut it is of utmos t importance that furniture shoul d ref lect lates t styleand fashion so as to attract the relevant class of the society.Sales promotionAnother critical success factor of this proposed pre-feasibility is theMarketing and promotion ofthe Furniture in the market. Salespromotion activity is necessary for market penetration. Th i s


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i nvol ves the d edica t ion and hard wo rk f rom th e market i ng personal anddeta iled advertisin g through elect ronic Media alongwith the use of other automatedmarketing techniques.Other Success Factors

PROPOSED LOCATIONThe socio-economic conditions of the country and population have adirect influence on the localfurniture demand. The Income level of communit y and improved lif e s tyle o f peop le alsoeffect the goodquality furniture requirements. Considering this fact the said projectcan bes t a r t ed i n a n y p o s h ar e a of d e ve l o p e d c i t i es l ik e La h o r e , K a r a c h i ,I s l a m a b a d , S i a l k o t o r F a i s a l a b a d e t c . I t i sh o w e v e r recommended to establish the Project atLahore - Gulberg. T h e g e n e r a l l i v i n g t r e n d o f t h e p e o p l e i n t h e r e g i o nc o n s i d e r a b l y increases the scope for establishment of the proposed project.

MARKET INFORMATION ABOUT FURNITUREAccording to Pakistan Economic Census 2005, out of the total 583thousandmanufacturingindustries covered in the census, 10.8% were inWood & Wood Products including furniture.According to the census,in the urban areas the share of house hold establishments in wood

products including furniture manufacturing was about 8% of thetotal household manufacturingindustries. Area wise analysis alsodepicts the similar trends. Details may be seen in thefollowingtable.Province wise details are given below;Table 3: No. of Manufacturing Establishments by Status&AreaManufacturingIndustryDivisionStatus of EstablishmentsA l lA r e a s R u r a lA r e a s U r b a nA r e a s T o t a l H o u s eholdEstab.OtherthanhouseholdEstab. T o t a l H o u s eholdEstab.OtherthanhouseholdEstab. T o t a lH o u s eholdEstab.OtherthanhouseholdEstab.Manufacturingof WoodandWoodProductsincludingfurniture63,0879,549 5 3 , 5 3 8 30,7998,963 21 , 8 3 6 32,28 8 5 8 6 3 1, 7 0 2REQUIREMENT OF WOODEN FURNITUREIn local market, the requirement for wooden furniture can becategorized into four types namely:For newly built house;For dowry;For renovation;


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For Institutional buyer. The majorit y of customers in the domestic market belong tofirstand second category. These customers require furniture fo r their newly builthouses and usually buy range of products like bed sets,d in in g se t s an d so fa s e t s w i t ho t he r r equ i r ed f u r n i t u r e f o r t he i r en t i r e hous e . I n P ak i s t an i s oc i e t y ,Furniture is given as dowry. Therefore, its demand increases in the spring and

winter seasondue to weddings. Basic requirement of these customers is bed set of new designsand styles. These types of customers also buy sofa setor dining set along with bed set. Initiallyentrepreneur should targett h e s e c u s t o m e r s t o e s t a b l i s h t h e b u s i n e ss a n d t oi n c r e a s e t h e customer base. These potential customers can play a dominatingr o l ei n t h e s u c c e s s f u l b r e a k t h r o u g h o f t h e b u s i n e s s . W i t h t h e

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CP Furniture