Chapter 1– Introduction

1.1 Introduction to Furniture Market In India

The furniture sector in India only makes a marginal contribution to the formation of GDP,

representing just a small percent (about 0.5%), which indicates a huge potential for growth. It is

estimated that the furniture industry comprises 25% of the construction industry and hardware

comprises 40% of total furniture industry, out of this 20% is replacement and 20% is new.

Wood and wooden products, furniture and fixtures carry a weight of 27.01% in the total

manufacturing sector.

The furniture industry employs a total of around 30,000 workers. The future on the furniture

sector in India seems positive. Talking about production, several agreements have been signed

between local producers looking for technology and European and Asian companies trying to

reach a potential opportunity in costs.

From the commercial point of view, India shows good perspective to sell furniture in the

following years. First of all, because its size and secondly due to the newly acquired taste as a

result of exposure to western furniture style.

India is one of the largest consumers of wood in South East Asia. Until a few years ago the

county had considerable quantities of available tropical woods. The most common species in

Indian forests are teak, rosewood, ebony, laurel, pine, cedar and rubber trees. Supply of these

“ready to uses” species became scarcer due to unconditional and inappropriate exploitation and

also due to growing concern about the environment.

In India, natural rubber plantations covers 520,000 hectares with another 6,000 hectares

replanted almost every year since 1994. Kerala state (South India) produces 95% of the total

supply of rubber wood in India.

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India imports wood (logs) especially from Malaysia, Indonesia, Myanmar, Ivory Cost,

Cameroon, Nigeria, Ghana, South Africa and New Zealand and to some extend from South

America.

Most soft and hard woods are imported from Russia, Scandinavia and other South East Asian

counties. MDF is imported from Europe, and there is also a small local production. Veneered

panel are becoming more popular in India and are imported from the European Union and the

USA.

The total size of Indian furniture industry is estimated at Rs. 350 thousand million but almost

85% of this is unorganized. The remaining 15% is organized and is believed to be growing at a

steady pace of 12% to 15% per annum.

The share of the wooden furniture market is estimated at Rs. 600 million. Woodworking industry

of India is one of the fastest growing in the county’s economy. Much of this growth has been

fuelled by the increasing access to modern machinery and technology through easier import

policies as a result of India’s entry into the WTO in the year 1990s. There is a noticeable shift in

the preference towards mechanized mass production and the up gradation of technology.

The upcoming Commonwealth Games in 2010 will also support growth of the housing and

construction sectors in India. Imports constitute 20 percent of total annual consumption of wood

in India, while plantations and forestry contribute 58 and 22 percent respectively.

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1.2 Furniture Industry Composition

As with the global market, home furniture is the largest segment in the Indian furniture market,

accounting for about 65 per cent of furniture sales. This is followed by, the office furniture

segment with a 20 per cent share and the contract segment, accounting for the remaining 15 per

cent.

1.2.1 Home furniture

Home furniture in India is available in a wide range, to cater to different customer needs. A

typical middle class urban Indian home has five rooms (including kitchen and bathroom). About

25 per cent of the urban population lives in homes with five rooms or more, while 45 per cent

live in houses with three rooms or less. About 16 per cent is estimated to live in single-room

homes. The type of furniture used depends on the customer’s affluence and taste. The rich and

upper middle class is typically very attentive to design and quality, so price is rarely a

determining factor. In general, European style furniture is only found in homes of the urban

upper class. Demand for furniture of international standards is limited to the larger cities. It is

also estimated that the wealthier classes do not change furniture very frequently; the average life

of a piece of furniture is about 20 years and some craftsmen’s pieces are used for as long as 50-

70 years. Colonial furniture is still very common in India, but the trend seems to be declining

slowly.

1.2.2 Office Furniture

The office furniture segment caters to the commercial and office space. This segment has

witnessed rapid growth in recent years, in line with the growth in the Indian economy and

subsequent demand for office space. The thrust on real estate and office construction is expected

to sustain in the near future, indicating continued growth for the furniture industry.

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1.2.3 Contract segment

The contract segment caters primarily to hotels and its growth is consequently linked to growth

in tourism and development of new hotels.There is around 1,200 hotels in India in the organized

sector. More than 10 per cent of these are in the 5-star and above categories

Comparative distribution of Branded Furniture in India

Fig 1.1 Comparative Distribution of Branded Furniture in India

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Chapter 2 – Market Overview

2.1 Current Scenario of Branded Furniture in India

The Indian furniture industry is estimated at around Rs 35,000 crore (Rs 350 billion). Eighty-five

per cent of this falls into the unorganized sector.

The share of the wooden furniture market is around Rs 60 crore (Rs 600 million).

The world home furniture market is worth Rs 20,000 crore (Rs 200 billion). During the past three

years, it grew by 20 per cent a year.

According to a World Bank study, the organized furniture industry is expected to grow by 20 per

cent a year and India, Russia and Brazil will witness a boom.

The range of indigenous furniture available in India includes both residential and contract system

furniture, with an increased concentration in office and kitchen furniture.

Manufacturers in India generally use a three-tier selling and distribution structure, comprising

the distributor, wholesaler and retailer.

India was the biggest furniture importer in 2004-05, with a 17 per cent share in furniture imports

worldwide. A total of 10,476 importers shipped furniture to India during this period.

The current imports are mainly from Italy, Germany, Spain, China, Korea, Malaysia, Indonesia,

the Philippines and Japan.

The furniture market in India is mainly concentrated in A, B and C cities (the top 589 cities).

It has been estimated that the top 784 urban centres contribute 41 per cent to the total consumer

furniture market. A and B type cities together contribute 33 per cent of the total market.

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2.2 Trends in Branded Furniture Market

Though technology has made inroads in the industry with increasing stress on the use of

machines, overall scenario reveals that almost 80% of the products supplied in local markets by

indigenous manufacturers are labor intensive and handmade.

Residential or household furniture accounts for over 60% of the overall domestic and leading

manufacturers have begun to realize the necessity of proper distribution system in this area.

Among other sectors where the demand is spiraling upwards is office furniture. Growth of IT an

IT- enabled sector such as BPO’s has created a huge demand in metros and Class II cities all

over India. The old economy businesses are also undergoing a makeover and this is reflected

through changing looks of the offices.

Metal and plastic furniture production is gaining wider prominence but wood still remains to be

the most favored medium.

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2.3 Major Players of Branded Furniture in India

2.3.1 Godrej Interio

Interio is a brand the Godrej group uses for its home furniture business and hence the group has

decided to extend this to the retail chain as well because it will be sharply re-focussed on the

furniture retail business of the group.

The focused on the furniture business of the group, which has been identified as a key thrust area

and a ‘hero’ business. The decision will allow the company to display a wider selection of its

furniture particularly its new range of designer home furniture at the Godrej Interio stores

because the entire space in the store will be available exclusively for displaying the growing

furniture collection.

Unlike other home solutions focused retail formats run by the Future Group and Shoppers Stop,

which have recently seen a double-digit decline in same-store sales Godrej’s furniture retail

business, has in fact seen a 25-30 per cent rise in same-store sales. Building on the success, the

group expects to expand its retail chain network to 200 stores over the next three years using a

mix of company-owned and operated outlets to franchisees. At present, all of the chains’ stores

are company owned and operated. Godrej says “that in difficult times, customers tend to

patronize brands, which are known for their reliability and durability”.

The group’s wide sales network in B and C class towns too it said, has helped it side step the

effect of the slowdown because furniture sales in these towns were impacted less than those in

the metros. In addition to its own retail chain, Godrej also sells its furniture range through its

wide network of dealers and franchisees. Along with expanding its own retail chain, Godrej &

Boyce continues to appoint new franchisees to further grow its sales network pan-India.

In keeping with its focus on ‘Brighter Living’, the group is now trying to connect more closely

with its consumers and is engaging in more one-to-one research and customer emotion studies to

help uncover what its target consumers want. The input is fed this back into its marketing and

new product development initiatives.

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2.3.2 Durian

From plywood to furniture Durian integral part of the lives of millions of Indians, Durian has set

new trends in lifestyle with quality benchmark products, redefining the word “piece of furniture”

to a lifestyle product which dictates pride of possessing it. Enriching lives across boundaries they

are today one of the largest interior infrastructural household names in India with a network

extending to every nook and corner of the nation.

It has most prominent ISO 9001 and 14001 certifications for our quality standards and

contribution in the industry.

Durian is a yarn of how two generation of a close knit business family built a conglomerate that

is a household name in the country today. The journey has been eventful marked by numerous

pioneering achievements in the building material industry.

Durian is the pioneer of natural veneer in the building material industry in India. Their products

have met the most stringent of international quality standards, resulting in our constant supply

not only in the domestic market but the international market also.

Durian has also introduced readymade doors in this industry to make life trouble-free for all the

users with a range of designs and colors to suit every eye.

Durian has imported home and office furniture range which is sourced from all over the world

which is the talk of the nation in terms of world class designs be it classic or contemporary. The

furniture pieces which are sourced from across the world to meet the new changing taste of the

Indian market.

For the first time in India, with the help of overseas research and technical team Durian

introduces Laminates which are guarded to resist borer, fungus and termite. It’s the proprietary

know-how which Durian has developed in collaboration with highly techno-savvy foreign

research laboratory.

The ideas and products have resulted in intensive transformation of technology for chairs and

workstations to give corporate look to offices meeting international standards. To fulfill the

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demand of the ever changing market in office furniture they have built state-of-the-art factories

with the most advanced technology, with BIFMA standard guidelines.

They have also started offering services for turnkey projects to provide a complete package to

our clients. In concise Durian offers lifestyle products related to interior design of office, home

under one roof.

2008

Established Veneer Edge banding plant at Palghar in joint venture with Canadian

Company

Launched Accessories, Furnishings, Paintings and Decorative Lightings division in all

Durian Showrooms

2007

Launched 10 of Durian’s retail Factory Outlets Showrooms all over India

Started Veneer Splicing plant at Palghar with Canadian collaboration

2006

Set up a plant for manufacturing Decorative Laminates (HPL) with latest machineries at

Ahmedabad, Gujrat

Started manufacturing modular office furniture plant at Palghar

Started manufacturing Office Chairs at Palghar

Started providing services for Turnkey Projects

2005

Completed successfully a network of 40 imported furniture showrooms all over the

country

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Added facility for manufacturing HDF doors at Wada, near Mumbai

2003

Added office furniture range in the category of imported furniture

2001

Launched one of the largest Imported furniture Showroom at Mumbai

1999

Launched first retail showroom of Durian imported furniture for home range in

Ahmedabad, Gujrat

1998

Started manufacturing P.V.C door skin & P.V.C. molded doors in Wada

1995

Set up , for the first time in India a decorative veneer manufacturing unit at Palghar with

latest technical know how and the equipments

1991

Established 4th plywood manufacturing unit at Palghar

1990

Established 3rd plywood manufacturing unit at Palghar

1988

Installed Timber peeling plant at Wada

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1987

Established 2nd plywood manufacturing unit at Palghar

1985

Established first Plywood manufacturing unit at Palghar

1981

Started activities in Mumbai with retail & wholesale trading of Plywood

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2.3.3 Zuari

Indian Furniture Products Limited (IFPL) is a part of the KK Birla Group, one of the most

respected business houses in India. The KK Birla Group has under its mantle, a diverse range of

industries ranging from agrochemicals to fertilizers, financial services to media. And in

anticipation of increasing global demands, furniture is the latest addition to the corporate

portfolio. Deploying sophisticated technology from europe that gives it unique manufacturing

capabilities, IFPL also has the distinction of having created the largest furniture retail chain in

india.

Zuari, the flagship brand Indian Furniture Products Limited (IFPL), a part of the K K Birla

Group and an ISO 9001:2000 certified company, have changed the perception of people about

furniture. Zuari’s wide and affordable range of offerings like bedroom furniture, TV trolleys,

computer tables, utility furniture etc have not only added to the convenience, but have become

style statements owing to their sleek designs and trendy looks. And the beauty of the furniture is

not just skin deep. They are manufactured with the most sophisticated European RTA (Ready To

Assemble) technology, in a state-of-the-art plant near Chennai, Tamilnadu. The product range

offered is made from raw materials imported from France, Belgium, Germany and UK. The

furniture is grafted on CNC controlled automated machinery imported from Germany, Italy and

Spain. The technology set up is the largest of its kind in the entire Asia and a substantial portion

of the company's production is being exported to developed countries of Europe, viz France,

Germany, UK and Belgium.

The success of Zuari lies in their understanding of the Indian Consumers, who have been long

craving for stylish and easy to assemble furniture at affordable costs. A strong distribution

network of 21 distributors, 14 Wholesalers and more than 450 dealers has helped Zuari to reach

its customers through the length and breadth of the country with readily available goods and

excellent after sales service.

With the mantra of offering more style and utility at reasonable prices, it seems Zuari is clearly

emerging as the most popular choice of the discerning consumers.

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Expertise

IFPL has a design team trained in Europe. This accounts for the team's expertise in various

functional aspects of furniture design and a keen sense of aesthetics, honed by constant exposure

to international furniture fairs. In addition, interaction with designers/manufacturers in Europe

and developing exclusive designs for several international clients. In fact this expertise has

helped IFPL bag prestigious projects from corporates and institutions such as Reliance

Industries, Ernst & Young, Schwings Stetter, Chambal Fertilizers, and IIM-Calicut etc. This has

given IFPL an organizational learning that allows manufacturing furniture on a turnkey basis.

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2.3.4 Tangent

Tangent is a chain of sprawling showrooms that put together everything an office or a home

needs. The furniture is gathered from all over the world. Spain, Italy, Malaysia, France, Hong

Kong with a firm grip on the international furniture pulse, when we feel that you might like some

furnishing, we bring it down for you. Furniture designs at Tangent are renowned for their

elegance, international appeal, durability and affordability.

Bedrooms and living rooms, cozy nooks and comfortable dens- our furniture will fit right into

your lifestyle. Sets for bedrooms and living rooms. Recliners, couches, sofas and settees,

loveseats, beds, dressers, dining tables… the list is endless.

For your office needs, Tangent offers ergonomically designed contemporary seating, spacious

desks, open plan office systems, and much more. All of these are designed to utilize space in an

optimum manner and promote productivity. Comfort and durability are the trademarks of our

business furniture line.

At Tangent your every space requirement will be met. We invite you to help us make your

dreams come true.

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2.3.5 Ikea

IKEA furniture’s, privately held; international, low-cost home products are an inevitable part of

interior furnishings at many houses in the world. IKEA furniture’s are marked for its modern

utilitarian design. The company has 250 retail outlets in 34 European countries while 24 new

stores are on the line to be opened in 2007 including India. At this moment of this house

product's successful expenditure, its history will enable you to understand how this furniture will

add charm to your house interiors.

IKEA was founded in 1943 by a 17-year-old Ingvar Kamprad in Småland, south of Sweden.

IKEA formed its name from the founder's initials (I.K.) plus the first letters of Elmtaryd and

Agunnaryd, the farm and village where he grew up from a farmer to a businessman. Ingvar sold

whatever he found could fill with a product at a reduced price under the brand name of IKEA.

When Ingvar Kamprad outgrew his ability to make individual sales calls in 1947, furniture was

introduced into the IKEA product range. Local manufacturers in the forests close to Ingvar

Kamprad's home produced the furniture. The founder of IKEA soon saw the opportunity of

becoming a furniture provider on a larger scale and discontinued all the other products to focus

directly on low-priced furniture. The result is the IKEA that we know today.

In 1953 the first IKEA furniture showroom was opened in Älmhult. In1955 IKEA began

designing its own furniture. Much of IKEA's furniture was designed to be assembled by the

consumer rather than being sold pre-assembled. IKEA made a revolutionary change in the

interior furnishings by reducing the price of quality furniture’s to a minimum amount. The

successful saga took a new turn as the first IKEA store in Norway opened outside Oslo in

1963.IKEA store opened at Stockholm in 1965, in 1969 at Denmark, in 1973 at Zurich,

Switzerland, in 1974 at Munich, Germany and the store opening continued as a new store opened

in each succeeding years at a new country.

IKEA products vary from upholstered furniture, coffee tables, beds, carpets, lightings, and

garden furniture’s to a variety of household furniture’s. Most of the names are Swedish, Danish,

Finnish or Norwegian in origin. Although there are some notable exceptions, most product

names are based on a special naming system developed by IKEA. For example, DUKTIG (good,

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well-behaved) is a line of children's toys, OSLO is a name of a bed, JERKER (a Swedish

masculine name) is a popular desk, DINERA for tableware, KASSETT for media storage. A

range of office furniture is named EFFEKTIV; ÄRPT (sharpened in Swedish) is a line of kitchen

knives.

IKEA has initiated its activities in India in 2000.Together with UNICEF; IKEA initiated a broad

community program in the north of India in August 2000. The aim is to prevent child labor by

creating awareness and addressing the root causes. The project focuses on 200 rural

communities, involving the villagers in strategies for preventing child labor.

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2.3.6 Style Spa

Headquartered in Chennai, India - Style Spa Furniture Limited (SSFL), a company owned by

Mr. S. K. Poddar Group and Zuari Industries Limited of the K. K. Birla Conglomerate was

established in 1997 to manufacture and retail furniture.

The manufacturing facility located near Chennai is a fully automated sophisticated plant

equipped to manufacture exquisite pieces of furniture of impeccable quality. The plant is also

one of Asia’s most modern and largest manufacturing facility.

The products - elegant and contemporary furniture for homes and offices, mattresses and pillows

– are retailed in exclusive Style Spa showrooms spread across the country.

Style Spa is the largest retailer of furniture in India with over 90 exclusive showrooms spanning

the length and breadth of the country.

Style Spa’s competitive edge lies in its elegant range of products which are difficult to replicate,

its State of the Art manufacturing facility that ensures consistent quality, a large retail network,

experienced, and qualified personnel that make up the Style Spa team and not to mention the tens

and thousands of homes that revel in the Style Spa brand of Good Living.

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2.6 Furniture Industry – Value Chain

The Indian furniture industry covers the entire gamut of activities, from sourcing, manufacturing

and distribution, to sales and after sales. In the Indian context, players are actively engaged in

each of these activities. Various types of raw materials are used for furniture making in India.

The key raw materials include wood, metal and plastic, with bamboo and cane also being used in

some cases. Wood accounts for nearly 65 per cent of all furniture made in India. This includes

several types of indigenous wood, as well as imported wood. India imports wood from various

South East Asian countries such as Indonesia, Malaysia and Myanmar. It also imports MDF

(Medium Density Fiberboard) boards from Europe.

Wood

India abounds in several tree species whose wood is used for furniture making. Apart from

indigenous material available in India, some types of wood are also imported, in case the

domestic supply is inadequate. Popular wood types used in India include Walnut, Sandalwood,

Teak, Sheesham,Deodar, Ebony, Redwood, Rosewood, Red Cedar and Sal. Teak accounts for

almost 50 per cent of the total wooden furniture produced, Sal and Deodar account for about 20

per cent and the balance includes Mahogany, Cedar and other tree types. Bamboo Material

Boards (BMB) are increasingly being used in place of plywood. India also has abundant rubber

wood supply. Natural rubber plantations cover 520,000 hectares with an additional 6,000

hectares being replanted almost every year since 1994. The southern state of Kerala produces 95

per cent of the total supply of rubber wood in India. Although furniture making as an activity is

spread across the length and breadth of India, a few centers have become famous for their

exquisite carving, inlaying, turning and lacquering. Indian states well known for woodwork

include Gujarat, Jammu & Kashmir, Punjab, Uttar Pradesh and Kerala. India is one of the largest

consumers of wood in South East Asia. The country has sufficient availability of tropical wood,

however, in recent years, growing concerns about the environment and the need for conservation

of forests have led to reduction in the supply of wood. India imports wood from various

countries like Malaysia, Indonesia, Myanmar, and Ivory Coast, etc. MDF boards are

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imported from Europe, soft and hard wood are imported from Russia and other South East Asian

countries. Veneered panels are becoming increasingly popular in India and are imported from the

European Union and USA.

Domestic Manufacturing

Furniture manufacturing is driven by the designs chosen, the inputs which come from in-house

designers and market feedback. Manufacturers consider several aspects related to the customer

(demography, lifestyle, motivation and aspiration, needs and preferences), raw material(type,

quantity and availability) and internal capability (expertise, quantity and availability of labor,

production process complexity and delivery time) for developing different designs, which in

turn, determine the furniture’s functionality, look and feel and value. Furniture produced in India

falls into two broad categories, depending on the end user; domestic furniture meant for home

use and commercial furniture meant for the office and hospitality sectors. Domestic furniture

represents almost two-thirds of the total output. The key success factors for each category vary.

Manufacturers in the domestic sector typically try to differentiate on the basis of design variety

and price, while in the commercial space, having a strong and reliable brand is important.

Imports

Furniture imports in India have been growing at nearly 64 per cent CAGR; over the 5-year

period from 2001 to 2006.A key driver is the increasing demand for furniture, fuelled by the

boom in housing and commercial construction. Increasing income levels and influence of global

lifestyle trends have also led to many urban, affluent Indians, moving towards imported

furniture. European furniture manufacturing companies have been the first entrants, with their

premium products (mainly veneered) in India. They were led by the K K Birla joint venture,

Gautier, with Groupe Seribo of France. Furniture imports from other Asian countries have come

in much later. Barring a few, such as, Renaissance Home, Interior Espania, Pinnacle Saporiti and

Gautier, most of the imported furniture dealers sell their products either under their own brand

name or without any branding. In recent times, import of cheaper furniture from South East

Asian countries has been increasing.

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Distribution

Indian furniture companies operate both, through direct selling in the market and distributors.

Companies with a large local customer base normally sell directly, without involving

distributors. The larger companies typically have their own commercial offices and showrooms

in all the larger cities in India. Many organisations prefer, however, to operate via organized

outlets. For projects of large volume, companies typically sell directly to the customer - the

primary customer is often the ‘specifier’ (architects, builders or project managers) or building

owners/lessees who are responsible for fitting out buildings and offices. Armed with the choice

of local and imported products, these purchasers exert significant influence on the sector.

Retailers

There are a large number of furniture retailers and franchises spread across the country. While

the majority of retailers are small in size and scale, large retailers usually operate in urban

markets. One-stop shopping chains for home building solutions have come up in large cities,

such as Arcus in Gurgaon and KSS Home Pro in Bangalore. Another development has been the

emergence of specialty furniture chains, such as, Usha Shriram Furniture Industries, OCL, Pace

Furniture, Indoors and Renaissance Home. With the rapidly growing and transforming retail

sector, it is expected that the large retailers will continue to expand their presence, leading to

consolidation in furniture retailing in urban markets.

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2.4 Locations known for excellence in woodwork

Although, furniture is manufactured in many different parts of the country, a few centers have

become well known for their exquisite carving, inlaying, turning and lacquering.

These are:

2.4.1 Gujarat

Besides carved chests and almirahs, Gujarat is synonymous with the wooden swing. The

different varieties of swings are made using a range of wood from unvarnished hewn wood to

rich lacquer. Sankheda village, in Gujarat, has a unique tradition of engraving indigenously

developed silver, gold and bronze colors on wood. Surat, has a tradition of parquetry-work,

which is locally called Sadeli.

2.4.2 Kashmir

In Kashmir, extensive wood-work has been used for structures since ancient times. Houses are

lined with wood ceilings worked in geometrical patterns and windows in lattice work. The

Kashmiri houseboat made entirely of a specially seasoned wood that does not warp in water, is a

visual delight.

2.4.3 Hoshiarpur (Punjab)

Wood workers here specialize in inlaying ivory, now more or less replaced by plastic due to its

low cost. Intricate designs have received royal patronage some generation’s ago. Wooden

furniture, trays and mirror frames repeat certain basic motifs and ornamentation derived from

nature.

2.4.4 Saharanpur (Uttar Pradesh)

This is the most flourishing commercial centre for woodcarving. Sheesham and Teak are used

for the small-scale manufacturing of traditional, as well as modern products, such as, screens,

cigarette boxes, tables, trivets, bookends, etc. Saharanpur now also concentrates on wood

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Seasoning or the preparation of wood before it is crafted, by mellowing it and making it proof

resistant against cracking and splitting.

2.4.5 Kerala

Woodcrafts in the state of Kerala, ‘God’s Own Country,’ vary from household furniture to

animal figures, which is a major economic and cultural activity. Carvings from Kerala represent

its tradition and borrow strongly from spiritual values and thoughts.

2.4.6 Other areas

West Bengal has its own tradition of strong folk carving. Carved figures, furniture, cabinets,

jewellery boxes, chests and lamp stands produced in Bihar, are noted for their elegant designs.

Orissa excels in making beautiful dowry chests of painted wood, in addition to carved figures of

Lord Jagannath and the temple at Puri. Andhra Pradesh is known for its colorful Kondapalli toys.

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2.5 Porters Five Forces on Branded Furniture Industry

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Chapter 3 - Drivers & Challenges faced by Branded Furniture in India

India is the fourth largest economy in the world and it’s the largest democracy with second

largest GDP among emerging economies. World Bank’s President James D. Wolfensohn

confirmed that India is not the world’s 4th largest economy after USA, China and Japan in PPP

(Purchasing Power Parity). It is also one of the ten fastest growing economies in the world.

With 1 billion populations, India remains on the fastest growing economies and even in the

present worldwide economic slowdown, has maintained GDP Growth rate of nearly 6%.

India today is 7th most attractive destination for foreign direct investments, after US, China,

Brazil, Mexico and Germany. Besides, India offers higher rate of returns and profitability than

anywhere else in the world.

Out of 1 billion population the upper and middle class constitutes 20% or 200 million people (or

30 to 40 million houses). By rent per capita:

2 percent of Indian has a per capita income in excess of 14,500 Euros, which means 20

million people.

8 percent of Indians have a per capita income of more than 3,900 Euros, which means 80

million people.

10 percent of Indians have a per capita income in excess of 3,200 Euros, this is about 100

million people

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Drivers & Challenges faced by Branded Furniture in India

1. The Indian market has been enormous with a large base.

2. Levels of affluence are high- with the number of individuals in the “high: income

demographic group doubling each year, according to NCAER statistics.

3. The actual “disposable” income at the disposal of the affluent Indian is as high as three to

five times higher as the official statistics, on account of the very large proportion of

unaccounted (“black”) money income.

4. The market has, due to exposure to overseas products and lifestyles, displayed the

willingness and ability to purchase overseas brands and products at high prices.

5. Customs duties and tariffs have been drastically reduced, in keeping with government policy

to open up the economy – a policy which has stayed constant despite changes in

government. All the products in the INDEX product range are now permitted for import into

India under OGL or the Open General License, which implies that no special import license

is required for import.

6. Despite the cut in duties, the rate of customs duties is fairly substantial which makes the

prices of products higher in India. There is a huge demand for furniture, hardware and

fittings, DIY equipment, lighting and consumer non-durable and appliances.

7. While the Indian middle class still does not have as high a rate of obsolescence as the US,

and tend to use their furniture for several years before changing or upgrading, the actual size

of this segment makes investment in this market more than worthwhile. The affluent classes

however, do have high rate of obsolescence of interior decoration products and redecorate

constantly.

8. All the above factors put together make manufacturers and retailers of a wide range of

consumer durables. Several overseas companies have already entered the market and have

been extremely well received by the market.

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Chapter - 4 Sales Promotion Tools

Many tools can be used to accomplish sales promotion objectives. Descriptions of the main

promotional tools are as follows;

4.1 Consumer Promotion Tools

The main consumer promotion tools are as follows;

Samples:

They are offers of a trial amount of a product. It consists of inviting prospective

purchasers to try the product without cost or at a lower cost in the hope that they will buy

the product. Samples may be free or discounted.

Coupons:

Coupons are certificates that give buyers a saving when they purchase a specified

product. Coupons can be mailed, placed in advertisements or included with other

products.

Rebates:

Rebate is also known as cash refund offers. Rebates are offers to refund part of the

purchase price of a product to its customers who send a proof of purchase to the

manufacturer. These are like coupons except that the price reduction occurs after

the purchase and not at the point of sale.

Price Packs:

Cents-off deals or price packs offer consumers savings by way of reducing prices

that are marked by the producer directly on the package.

Premiums:

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These are the goods offered either free or at a low cost as an incentive to buy a

product. Premiums may be in-pack or on-pack (outside the pack).

Prizes:

They are offers of chance to win something such as cash, trips or goods – by luck or through

extra efforts. Contests of talent and sweepstakes or draws the most popular prize offering

promotions.

Tie-in Promotions:

Tie-in promotions involve two or more brands or companies that team up on coupons,

refunds or contests to increase their pulling powers.

Cross Promotions:

Cross promotions involve using one brand to advertise non-competing brand.

Advertising Specialties:

These are useful articles imprinted with an advertiser’s name, given as gifts to consumers.

Patronage Rewards:

They are cash or other awards for the regular use of company’s products or services. They

are values (in cash otherwise) that are proportional to one’s patronage of a certain vendor or a

group of vendors. They aim at building brand loyalty.

POP Promotions:

Point of purchase (POP) includes displays and demonstrations that take place at the point of

purchase or sale.

4.2 Trade Promotion Tools

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More money is spent by companies on trade promotion (58%) than on consumer promotions

(42%). The major trade promotion tools are as follows;

Discounts:

It is also known as price-off or off-invoice or off-list. Discounts price cut off the list price on

a particular quantity purchased during a stated time.

Allowances:

They are the amount offered in return for an agreement by the retailer to feature the

manufacturer’s products in some way; displays, advertising or otherwise.

Free Goods:

Free goods are the extra merchandise offered to middlemen who buy a specific amount of a

product.

Companies also offer push money and specialty advertising items to the middlemen.

4.3 Business Promotion Tools

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Companies spend huge amount on promotions focused on industrial consumers. The major

business promotion tools are as follows;

Trade Shows and Conventions.

Sales Contests.

Clearly, sales promotions play an important role in the total promotion mix. To use it well, the

marketer must define the sales promotion objectives, select the best tools, design the sales

promotion program, pretest and implement the program and evaluate its results.

Chapter – 4 Research Methodology

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4.1 NEED AND SIGNIFICANCE OF THE STUDY

There has been an increase in sales of Branded furniture in India. The branded furniture industry

is growing at 30% per annum. Growth in this sector is being propelled by increase in disposable

income, reduction in import duties, growth in real estate sector, growth in organized retail, rising

quality consciousness amongst Indian consumers, growth in IT & ITES Sector and growth in

tourism.

4.2 SCOPE OF STUDY:

This study is to analyze what are the most important attributes while purchasing a Branded

Furniture. This study will be majorly done on the basis of questionnaire. The study then goes on

to evaluate and analyze the findings.

4.3 METHODOLOGY

The methodology used was “Descriptive Research”. The research has a structured questionnaire

where respondents would be interviewed. The sample size was 100. It comprises of men &

women in the age group of 18 to 58 years and belong to SEC A & SEC B category and having

purchasing power to buy Branded Furniture. The area for the survey is restricted to the City of

Mumbai.

4.4 RESEARCH OBJECTIVE:

To identify the factors which leads to sales of Branded Furniture In India.

To study the preferences and needs of the customer when they purchase a Branded

Furniture.

To find out the Consumers Perception towards Branded Furniture in India.

To analyze the reasons for the popularity of a Particular brand.

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4.5 LIMITATION OF THE STUDY

4.5.1 Accuracy of the project

In this research, a small sample size was surveyed. Hence the conclusion may not hold good for

a large number of people.

4.5.2 Place of Research

The research was conducted only in certain selected places like Mumbai & Mumbai Suburbs,

thus the geographical limitations can be assumed to be a hurdle in the authenticity of the

research.

4.6 SOURCES OF DATA COLLECTION

Primary data : Structured Questionnaire (Refer Annexure)

Secondary Data : Internet, Books, Magazine, Previous related study or research

conducted.

4.7 SAMPLING PROCEDURE

4.7.1 Technique - Simple Random Sampling

4.7.2 Sample Size - 100

1. Male & Female groups between 18 to 58 yrs of age.

2. SEC A & SEC B, males & females having purchasing power of buying Branded

Furniture or have purchased Branded Furniture or willing to purchase in 6 months time.

3. Residing in Mumbai.

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Chapter 5: Data Interpretation & Analysis

Q1) Which Brand of Furniture do you own?

Figure 5.1- Ownership of Branded Furniture

Out of the 100 respondents 38% has a Godrej Interio Branded Furniture and the second closest is

durian with 24% respondents possessing Durian Furniture.

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Q2) When did you last buy a Branded Furniture?

Figure 5.2 Frequency of Refurbishing

Out of the 100 respondents, 42% of the people of people change their furniture or have bought

the furniture within 1-2 years and 32% within 2-5 years so the major chunk of respondents have

bought furniture within 5 years

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Q3) How much are you willing to pay for a Branded Furniture?

Fig 5.3 Buying power of Customers

Out of the 100 respondents, 57% of the respondents are willing to shell out Between 50000 –

100000 and 33% are willing to pay less than 50000 so the majority of the respondents

undergoing survey are willing to pay less than 100000.

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Q4) Are you planning to Refurbish your Furniture?

Fig 5.4 Repeat purchase of furniture in future

Majority of the respondents undergoing survey are willing to refurbish the furniture though the

difference between those willing to refurbish and those not are not substantial.

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Q5) Will you buy Branded Furniture again?

Fig 5.5 Repeat purchase of Branded Furniture in future

Out of 100 respondents 65% are willing to purchase Branded Furniture again. The response for

Branded Furniture is better than just Furniture as can been seen from earlier figure.

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Q6) For the below mentioned factors, please specify the degree of importance in your purchase

of Branded Furniture?

(Highly satisfied-5, Satisfied-4, Normal-3, Poor-2, Very poor-1)

Descriptive Statistics

N Mean

Brand Name 100 3.8600

Design 100 3.8100

Quality 100 3.9400

Durability 100 3.8600

Price 100 3.6100

Ergonomics 100 3.4200

Availability 100 3.6000

Compact 100 3.5300

Delivery 100 3.5600

Reliability 100 3.7400

Valid N (listwise) 100

Fig 5.6 Important parameters while purchasing Branded Furniture

Brand Name, Design & Durability are the most important parameters while purchasing Branded

Furniture.

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Q7) Rate your Branded Furniture on the following parameters?

(Highly satisfied-5, Satisfied-4, Normal-3, Poor-2, Very poor-1)

Descriptive Statistics

N Mean

Brand Name 100 3.9200

Design 100 3.7700

Quality 100 3.5400

Durability 100 3.4200

Price 100 3.4600

Ergonomics 100 3.4300

Availability 100 3.4800

Compact 100 3.3600

Delivery 100 3.4000

Reliability 100 3.4700

Valid N (listwise) 100

Fig 5.7 Post purchase Branded Furniture consumers rating of their Furniture’s

Brand Name, Design, and Quality where the most important parameters post purchase of

Branded Furniture.

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Q8) Please rate the following parameters in the scale of 1 to 5

(Highly satisfied-5, Satisfied-4, Normal-3, Poor-2, Very poor-1)

Descriptive Statistics

Branded N Mean

Ergonomically Designed 100 3.8400

Availability 100 3.4400

Delivery 100 3.6100

Quality 100 3.7800

Reliability 100 3.6900

Pricing 100 3.3100

Durability 100 3.4900

Variety 100 3.4900

Customization 100 3.6200

Experience 100 3.3100

Valid N (listwise) 100

Fig 5.8.1 Branded Furniture

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Descriptive Statistics

Unbranded N Mean

Ergonomically Designed 100 3.3200

Availability 100 3.4500

Delivery 100 3.2700

Quality 100 3.1900

Reliability 100 3.3100

Pricing 100 3.6600

Durability 100 3.3600

Variety 100 3.3000

Customization 100 3.6800

Experience 100 3.2800

Valid N (listwise) 100

Fig 5.8.2 Unbranded Furniture

The most important attribute while purchasing a Branded Furniture is Ergonomically Designed,

Quality & Customization and while purchasing Unbranded Furniture is Pricing, Customization &

Availability.

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Q9) Please rate the following sentences on a Scale of 1to 5 (where 5 is Strongly Agree and 1 is

Strongly Disagree)?

Descriptive Statistics

Sentences N Mean

Sentence 1 100 4.0500

Sentence 2 100 3.5500

Sentence 3 100 3.4200

Sentence 4 100 3.2800

Sentence 5 100 3.2900

Sentence 6 100 3.2700

Sentence 7 100 3.3000

Sentence 8 100 3.2000

Sentence 9 100 3.4600

Sentence 10 100 3.3300

Valid N (listwise) 100

Fig 5.9 Rating of Parameters

Quality and Availability were the most important parameters while purchasing Branded

Furniture and the most important tool for advertisement was Word of Mouth appraisals for a

particular Brand.

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Chapter 6: Suggestions & Recommendations

Target middle- to high-end consumers, as people who prefer branded furniture are

middle- to high-end consumers who have a rather strong spending power, and prices have

to be set within a certain range. Since there is a certain correlation between the launch

price of a new product introduced into the market and the consumers’ awareness of it,

high price normally means high quality to the general consumer.

Branded furniture manufacturers are in a better position to play the role of a trendy and

high quality product producer. Hence, “trendiness” and “high quality” can be used as

selling points.

“High quality” can be substantiated by the materials used, product quality and service

offered. Branded furniture companies should strike a balance between trendiness and

durability. How to win the confidence of consumers in the quality of the products is an

important market strategy.

Target the new home market, as its purchasing power is stronger. Position at the middle-

to high-end of the market. Second-time home buyers are less sensitive to price and place

more emphasis on the quality, material and grade of the product. This market offers great

opportunity to Branded furniture companies which excel in high quality.

Distribution channels play an important role in the sale of home furnishing product,

especially furniture. Branded furniture companies should choose to establish a presence

in stores which are positioned at the middle- to high-end of the market, have a good

image, and match the middle- to high-end image of Indian home furnishing products.

Middle-class consumers are attaching increasing importance to home furnishing. 53% of

the respondents indicate that they agree or strongly agree that they are more willing than

before to spend money on buying or replacing home furnishing products.

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Based on the consumption of household furniture, respondents moving into new homes

tend to “buy all furniture anew”. The mention rates of sofa and bed among all furniture

items purchased by respondents in the past year are the highest. Sofa and bed are the

most popular furniture items purchased by people in the preceding year and are also items

which respondents are most willing to pay more for higher grade or better quality.

Price is not an important consideration factor, as long as the “style” and “quality” of the

furniture meet their requirements. As consumers are most concerned about quality and

style, in cases where price is an indicator of quality and style, they do not mind paying

more.

Most of the respondents have purchased their Branded furniture within two years it

means that the disposable income of people are increasing and people are now more of

Branded Furniture.

Offering value-added services can also attract consumers and make the products stand out

from the crowd.　For instance, over 90% of the respondents are interested in “after-sale

repair and maintenance service” and “using green, eco materials”. Consumers would

choose the product which uses green materials and are willing to pay a premium of 14%

on average.

Respondents who prefer furniture brands have higher income. They are more influenced by

trends in their purchase of home furnishing products. They believe that “you get what you pay

for” and are more demanding where quality is concerned. Their interest in the various kinds of

value-added products and services is also higher.

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Appendix

Questionnaire

Name:

Age:

Mobile No:

Q1) Which Brand of Furniture do you own?

Q2) When did you last buy a Branded Furniture?

Less than a Year

1 - 2 years

2- 5 years

More than 5 years

Q3) How much are you willing to pay for a Branded Furniture?

Less than 50000

50000 – 100000

100000 – 200000

More than 200000

Q4) Are you planning to Refurbish your Furniture?

Yes No

Q5) Will you buy Branded Furniture again?

Yes No

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Q6) For the below mentioned factors, please specify the degree of importance in your purchase

of Branded Furniture?

(Highly satisfied-5, Satisfied-4, Normal-3, Poor-2, Very poor-1)

Brand Name

Design

Quality

Durability

Price

Ergonomics

Availability

Compact

Delivery

Reliability

Q7) Rate your Branded Furniture on the following parameters?

(Highly satisfied-5, Satisfied-4, Normal-3, Poor-2, Very poor-1)

Brand Name

Design

Quality

Durability

Price

Ergonomics

Availability

Compact

Delivery

Reliability

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Q8) Please rate the following parameters in the scale of 1 to 5

(Highly satisfied-5, Satisfied-4, Normal-3, Poor-2, Very poor-1)

46

 

Branded Furniture

1 - 5

Unbranded Furniture

1 - 5

Ergonomically Designed    

Availability    

Delivery    

Quality

Reliability

Pricing

Durability

Variety

Customization

Experience

Q9) Please rate the following sentences on a Scale of 1to 5 (where 5 is Strongly Agree and 1 is Strongly

Disagree)?

Sr  No Sentences Rate

1 Quality of the product is the most important factor while purchasing a furniture  

2 Availability of the product hampers my buying decision  

3 Branded Furniture gives an aesthetic appeal to my home

4  Pricing is not a concern as far as the furniture is worth buying  

5 Brand name doesn’t matters as far as the furniture is good looking

6 Advertisements influences my buying decisions

7 Unbranded made to order furniture’s are more durable than branded furniture

8 Purchasing a Branded Furniture is an esteem factor for me

8 Unbranded Furniture’s are highly customizable as compared to Branded Furniture

9 Word of Mouth referrals from relatives & friends influences my purchasing decision

10 Unbranded furniture’s lacks variety as compared to Branded furniture’s

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BLIOGRAPHYBLIOGRAPHY

BOOKS and READINGS

Kotler, Philip (2005) "Marketing Management", Pearson Education (Eleventh Edition).

Malhotra, N.K. (2005). " Marketing Research: An Applied Orientation", Pearson

Education(Fourth Edition)

WEBSITES

www.indianfoline.com

www.furniture.co.in

www.tangent.co.in

www.ikea.com

www.godrejinterio.com

www.durian.in

www.zuari-furniture.com

www.stylespafurniture.com

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