The urge for decorating homes is increasing each day in comparison to what people thought a decade ago. A well designed and functional home is one that makes the most of the providing a well coordinated décor theme – be it contemporary, or retro. According to financial experts our homes are often our greatest assets and for that reason people are willing to spend money maintaining and even improving them, no matter the economic climate.
The furniture modular kitchen and door is approximately a Rs 45,000 crore industry growing at 25% pa. Within this, the wooden furniture accounts for Rs 5,000 crores. Of this, the imported furniture market is currently worth Rs 500 crores and is growing at 50% each year. The furniture sector in India only makes a marginal contribution of 0.5% to the GDP.
India’s consumer market is in a transformational state with dynamic changes in the demand pattern and it is innovation that will lead to sustainable growth as far as the retail sector is concerned. The key driver motivating the growth in the furniture, modular kitchen and door industry is the good industry growth of about 25% per annum, and increased disposable income in the urban areas which has grown at a 5% compounded annual rate over the last decade. According to one research, by 2010 the higher income earnings group (> USD2000) is expected to constitute 48% of the total earning population. The young population of India less than 19 years of age constitutes 44% of the total population; youth are generally early adapters of most modern products and concepts. Given the higher aspirations and “willingness to change” of the younger age group India’s age profile offers high market potential for home décor goods. India, historically a land of savers is getting transformed into a land of spenders with growing number of double income households, a decrease in the average size of the family and higher media exposure.
Unlike other retail purchases that are impulsive, home furniture purchases are planned and considered an investment and specialty stores are preferred by customers over since home furniture and modular kitchen is customized in size and design, one-to-one interaction, personalized service and attention are favored by customers. No matter how a customer wants to work by item or by room – specialty stores will listen to the needs, help identify a customer’s style and give adequate advice to smoothen the process. Exposure coupled with easy availability of funds have made more and more urban middle class couples to look for specialty stores over malls and mart while doing up their houses. The specialty retail store segment has indeed carved a niche for itself.
Franchising is the most dynamic method of business expansion ever devised. By franchising, many businesses have grown from a handful of units (or even just one unit) to hundreds or sometimes thousands of units within a few years. No other approach even comes close to the market scope and growth offered by franchising. In business, it is generally recognized that an owner will be more attentive than a manager. This is the central point which makes franchising so attractive. A franchisor can be rest assured that the person operating his store will be attending to business much as he would. Franchising is sometimes utilized by a business which has expanded to its limits as a corporate owned network, to exploit markets which would otherwise be neglected.
For consumers buying products from franchisees will assure consistent products or services making life easier. The customers are well aware of the fact that they are buying from a store wherein there is direct dealing with the company and they reap the benefits of experience and fair price, combined with the latest technology tools, quality, flexibility, affordability and assurance of genuine products.
Statistics vary widely on the success/failure ratio of franchised versus non-franchised startup businesses, but franchises invariably come out on top. Economic forecasts reveal the evolution of the retail industry which has brought about a paradigm shift in the method of its selling. Franchising is a safer business opportunity than merely hopping on to the retail bandwagon today. Since retail is the fastest growing sector in the Indian economy, driven by changing lifestyles, strong income growth and favorable demographic patterns, the modular Kitchen, furniture and door industry which were earlier a mere display are today a thriving standalone business model. Selling through franchising, works by combining the drive and energy of the entrepreneur with the experience and expertise of the franchisor. This means that basic framework is already in place so the franchisee instead of ‘reinventing the wheel can concentrate on providing customers with optimal guidance and peerless purchasing process. Ultimately it is the dream of franchising that is critical to success because without it there is no drive, no gutsy start-up.