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Decline of Wooden Furniture Industry: Strategies for Cane, Molded & Steel Furniture

Presented by: Aishwarya Parthasarthy (03) Amardeep Bhogal (04) Click to edit Master subtitle style Ankit Kapoor (08) Jatin Ahuja (24)

The World Furniture Industry

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The world home furniture market is worth Rs 200 billion. the last three years ie. from 2007 to 2010, it grew by 20% a year.

During

Traditional

furniture-making countries continue to take up over 70 per cent of the global market because of their long established production capacity, advancement in science and technology, solid funds and rich management experience. developing countries and regions like China, Southeast Asia, Poland and Mexico, with China taking the lead. countries have built upon their respective competitive advantages and gradually covered

Meanwhile,

These

INDIAN FURNITURE INDUSTRY

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Indian Furniture market is estimated to be more than Rs. 60,000 cr (Rs. 600 bn)

The

industry is dominated by the unorganized sector, which constitutes 90% of the market. organized furniture market is at 10% and growing at about 35% CAGR. in India only makes a marginal contribution to the formation of GDP, representing just a small percentage (about 0.5%). furniture industry employs a total of

The

Thefurnituresector

The

FACTS & FIGURES

Furniture

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segment comprises 65% of the home market & 35% of Institutions. entire Home decor category spends, furniture accounts about 68% of the share while remaining 32% comprises of furnishings and home improvement. furniture constitutes to 85% of the total organized furniture industry in the country. imports furniture from Italy, Germany, Spain, China, Korea, Malaysia, Indonesia and Philippines. furniture market in India is growing at a rate of 13-15% per annum.

The

Imported

India

The

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SWOT ANALYSIS FURNITURE INDUSTRY

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Strengths Weaknesses

Increasing demand in modern, clean, minimalist designs Highly educated, skilled, young, capable & dynamic human resources Established branding, tradition Worldly-reknowned outsourcing hub Diversity vs. Ideas (Innovation, Integration) Big democracy= big market & free media

Inefficient stock control; outdated system Lack of trust in external organizations Fear of sharing knowledge & taking risks Lack of effective & execution framework Decreasing demand in traditional furniture Industry has slow absorption of innovation & change

SWOT ANALYSIS FURNITURE INDUSTRY

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Opportunities Threats

Big potential market in Design sector & emerging new market segment in Services Lower labor costs in outsourcing Research & Development capability More efficient production method Hybrid solutions balancing & blending Need modernization of infrastructure Very little competition in modern furniture design

Large fluctuations in stock control (new production method) Inter-company collaboration is unknown Rising cost of imported goods Pioneering uncertainties Clashes in Diversity vs. Imbalance Fast change Internet (IT), new inventions (Technology, Innovations)

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By SALES: MAJOR FURNITURE SEGMENTS

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STEEL & MOLDED FURNITU RE CANE FURNITU RE

WOODEN FURNITUR E

 Upgrading

REASONS FOR DECLINE IN THE WOODEN FURNITURE INDUSTRY

challenge facing producers in

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medium- and low-income economies

Chinese

Cheap and eco-friendly furniture

posing threat to Indian Furniture Industry.

Housing

market is slowing down & credit

crunch is hurting furniture consumers.

Furniture

Imports are more expensive than

exports.

With the decline and saturation in the wooden furniture segment, what do you think could be the best alternative to replace wood on the basis of the following criteria?
Criteria STEEL FURNITURE MOULDED FURNITURE 12% 40% 20% 40% CANE FURNITURE

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Reliability Availability Durability Pricing

80% 20% 65% 30%

8% 40% 15% 30%

Wooden Promotional Mix Media Distribution Good Good Excellent

Cane Poor Poor Poor

Steel Poor Poor Poor

Molded

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Good Good Average

ALTERNATIVES

BUYERS COMMERCIAL-UPTO 70%

INDUSTRIAL USES ALMIRAHS, RACKS

HOME USE DINING TABLES, CHAIRS, BEDS

STEEL FURNITURE MOULDED FURNITURE

HOTELS AND RESTAURANTS: UPTO 80%

TABLES & CHAIRS

SIDE TABLES, SITTING CHAIRS, STOOLS

CANE FURNITURE

DOMESTIC: UPTO 60%

LOBBY ARRANGEMENTS

GARDENS AND LOBBY TABLES AND SOFAS (OUTDOOR)

Molded furniture
Made

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from the finest polypropylene, using computer designed moulds. quality and Modern designed. and virtually maintenance free. and space-saving when not in use. wide range of attractive colours. upholstered

lightweight. Good

Weatherproof

Stackable

Barring

Cane furniture
It

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is less prone to breakage, thus lasts longer and is good value for money. weight priced & designer made. be easily sourced. is known for its flexibility, thus can be molded and shaped into various unique, intricate designs.

Light

Reasonably

Can

Cane

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Steel Furniture
Durability

is the main advantage. corrosion resistance non-porous, surface appearance and heat resistance cleaning ability

High Fire

Hygienic, Easy

Aesthetic Bright

and easily maintained surface advantage.

Strength-to-weight

Strategies for Molded Furniture

Differentiation

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Firms

like Supreme & Nilkamal are market leaders.

Products

are equally competitive & hence they must concentrate on product differentiation. can go ahead with plans of bringing in Molded Sofas & Molded Beds. is still considered highly breakable, so an image makeover on the strength of plastic used by companies is a must.

Companies

Plastic

Contd.
In

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case of pricing, Penetration Pricing is recommended because due to high pricing by Organized Indian Players we observe level of local, unorganized purchases. can be improved through tie ups with furniture vendors who usually sell local or imported products. Mix:
home-makeover offers.

Distribution

Promotion

Advertisement on AIR & through Television.

Complete

Strategies for Cane Furniture

Growth Strategy
Though

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its one of the oldest industry in India, still its in the Growth stage. huge level of limited domestic use, makes this industry a slow progressing one. dominated by the local handicraft industry. variation in the product can be suggested.

Highly Color

These

are usually low priced, hence PENETRATION PRICING is suggested. Tie up with nearby stores in localities. Trade and other fairs. local vendor & more of members in

Promotion:

Distribution:

Strategies for Steel Furniture

Product Differentiation

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Steel

still considered as tough and uncomfortable due to the toughness expects a Product differentiation: where a combination with other softer elements like wood, could help. doesnt fit in as a cheaper commodity, hence Lower Prices are to be put forward. : through company owned stores because of high level of local vendor market.
Print media. Money back plans

Steel

Distribution

Promotion:

BRAND RECOGNITION:
WOODEN

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FURNITURE BRANDS But this Brand recognition is missing in case of all 3, except in molded, where a few brands like Supreme & Nilkamal are known

Furniturewala, Zuari, Yantra, Renaissance, N R Jasani & Company, Furniture Concepts, Durian, Kian,