Branded furniture players looking to take over the disorganized market


The branded players in the 50,000 crores organized furniture market are not competing with each other but trying to increase the market for themselves against the unorganized sector. Brand players like Ikea, Godrej Interio, Pepperfry, and Wakefit are expanding their online and offline presence to more cities, just like other durable products, consumers have started to replace their furniture too at shorter intervals than in the past.

Still, market share growth for them can be slow, considering that 91% of the market is in the unorganized sector, made up of woodworking and neighborhood furniture stores.

Ashish Shah, co-founder, and COO of Pepperfry told FE that with the arrival of Ikea and other international players, there is “excitement” around branded furniture. “With a large part of the furniture business still disorganized, my competition isn’t Ikea or HomeTown or Urban Ladder… We all need to get more of the 90% balance. Furniture used to be a boring category, but now it’s becoming exciting. When Ikea opened in Hyderabad four years ago, steps at two of my studios in Hyderabad increased by 140% in one year. And so is my business,” he said.

Executives at branded furniture companies said consumer behavior is changing; people no longer 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 carpenter next door.

Citing a report by Redseer, Swapneel Nagarkar, head of business at Godrej Interior, told FE that the size of the furniture and homeware market in India in 2021-22 was $16 billion in terms of gross commodity value. , estimated at US$ 41 billion. until 2026.

“There are very few branded players in this category and that gives us an advantage. We (Godrej Interior) are growing at a CAGR of 15% over the last two years, compared to the market growth rate of 7-8%,” he said. Currently, with 450 exclusive showrooms and 520 points of sale, the company plans to add 100 stores by March in metropolitan areas and smaller cities.

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

Wakefit, a direct-to-consumer home brand that started as a mattress and home furniture company, quickly diversified into furniture. The company invested 100 million euros to build India’s largest furniture factory in Hosur, Tamil Nadu, spread over 600,000 square feet. The new plant has the capacity to fully furnish nearly 100,000 homes per month.

The company, which has opened 10 stores in Bangalore, New Delhi, Lucknow, Pune, Chennai, Ahmedabad, and Hyderabad, plans to open 25 more. “These stores are planned as retail megastores, with an average size of 3,000 square feet, and are strategically located in areas with a high density of furniture retailers to drive organic traffic,” said Ankit Garg, CEO, and co-founder of Wakefit.

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

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