Godrej Interio unfazed by IKEA entry

Godrej Interio, a major player in both the home and institutional segments in the furniture market in the country, remains unfazed by the entry of global furniture giant IKEA since it believes that it has a greater feel of the Indian market.

The company, which claims to have about 15-20 per cent of share of the organised furniture market, aims to grow 10 times over the next decade.

Speaking to Business Line here on Friday, Vipin Kumar, Regional Manager-South, GI, and Khushnuma R.Jamasji, Dy.GM (Advertising & Communication), GI, Mumbai, said size of the Indian home and office furniture market was estimated at Rs 10,000 crore. Of this, the share of the unorganised sector was about 70 per cent while the organised sector accounted for the rest. Godrej Interio aims to capture close to 20 per cent market share in the organised segment.

They said the organised sector was growing at 15-20 per cent annually. GI would like to grow ten times during the next ten years. The recent economic slowdown has had an impact on the furniture demand and with the elections round the corner the office furniture market was expected to remain subdued.

Godrej Interio was importing a portion of the products sold in the Indian markets. It was producing on its own about 60-80 per cent of the beds it marketed and in case of sofas, it was about 50 per cent.

It is acquiring a foam manufacturing unit in Haridwar and it would manufacture sofas also there so that sofa imports come down. Godrej also sold dining sets and living room furniture. It was present in 20 branch towns in each of which it has about 4-5 own stores, apart from a dealer-network of 800 dealers across the country.

On the likely impact of the entry of Swedish furniture maker IKEA that sells a range of ready-to-assemble furniture, appliances, and home accessories, Kumar said that it was a fact that IKEA was set to "play a major role" in the Indian furniture market and it was also a respectable name. But he said the company was "ready for competition".

Explaining the reasons for Godrej’s confidence in facing up to IKEA, he said it had a headstart in spreading its reach across the country. Moreover, while IKEA would play bigger formats, Godrej Interio has opted for smaller formats and smaller towns and the reach of Godrej in the markets in which it is present is "much, much higher". Its core strengths were logistics, product serviceability, which many could not match. However, he he wouldn’t say whether IKEA could not match them.

He said today consumers did not look at the longevity of furniture while buying it. What they looked for are the looks, feel and aesthetics and consumers wanted to be different from others in their selection to retain exclusivity.

Kumar said a major strength of Godrej Interio was that it had its own design team and has also tie-up with experts in Italy and France. Its fastest growing markets were eastern and southern India. It was also focusing on the kitchen segment to power its growth.

Khushnuma Jamasji, commenting on the presence of foreign brands in the kitchen segment (modular kitchen and accessories), said the Indian kitchen segment was different because the Indian cooking and habits were different from what was prevalent abroad. The company’s strength was awareness about the needs of Indian customers and it counted in the market.

It also announced the launch of its "Upload and Transform" campaign under which participants could upload photos of that part of their home that they wish to transform and upload them on the Godrej Interio Facebook page or Web site explaining why the brand should transform them. The chosen winners would get a chance to transform the selected home space free of cost.

She said once the winners were shortlisted, Godrej Interio teams would visit their homes to know their needs and lifestyles and would not try to "impose a very modern looking thing" on them if they come from a traditional background. But if the winners wanted something trendy, it would be incorporated in the colours or the looks. In the contest last year, five winners were chosen whose homes were aesthetically transformed.

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