Interview with Debashish Poddar

Debashish Poddar
CEO
Bombay Dyeing (Textiles)

Home furnishing is more suitable for e-commerce than apparel

Debashish Poddar, CEO of Bombay Dyeing (Textiles) is a well-known name in the Indian home furnishing industry. In an interview with Mary Christine Joy, he shares some industry insights, its current size and future growth, strengths and challenges faced.

What is the size of the global home furnishing market?

Approximately close to US$ 700 billion of which about 65 per cent is furniture.

How is the home furnishing market in India shaping up?

In India, it has been growing at an average CAGR of 8-9 per cent. Growth in the branded category and premium segment is higher due to one-side lower baseline, and at the same time, people`s desire to spend more money in this area. The higher desire is because of higher disposable income per family. Women's empowerment (actually for this category and segment, women are the target group and key decisionmakers), urbanisation, exposure of international markets, better sense of hygiene lead to more number of washing and frequent re-purchase, etc.

What are the emerging trends in terms of technology and innovation in the home furnishing collections?

In my view, nanotechnology is one of the new focus areas here. Functional finishes are also very much in, like stain-repellent and release, quick-dry, anti-fungal and anti-microbial, reactive col base print, vitamin-enriched, scented-finish, etc.

What is the size of the Indian home furnishing market?

Indian home textile market is estimated to be Rs 26,000 crore (without furniture). Major categories are bed linen (about Rs 13,000 crore) and bath (about Rs 4750 crore) CAGR of about 9 per cent. The organised part will be just about 5 to 6 per cent.

What do you think of the Indian scenario?

India has several distinct advantages. First and foremost is the availability of good quality cotton, suitable for this segment. India being one of the largest producers of cotton, manufacturers and exporters have the great advantage of sourcing, storing and using the same subsequently. Although salary and wages have increased in the last ten years or so, it is still competitive; especially India`s capability to produce fine count yarn and thereby offering high thread count (TC) bed linen. While some of our neighbouring countries are very strong in lower TCs, India offers a variety of products in TC 300 and up. But at the same time, India is less completive in P/c blended fabrics and made ups against these countries. Also, India offers several functional finishes which are gaining in popularity day-by-day in the value-added segment. Some of the mills in India have installed larger capacity in recent past with complete backward integration, which gives customers more confidence to deal with Indian suppliers. Finally, quality, commitment in terms of lead time and peaceful and stable socio-economic conditions are also some of the favourable factors towards India.

What are the challenges faced by the Indian home furnishing industry?

The most important challenge is its domestic market size (which is even less than 25 per cent of menswear segment), and that too organised market size and its share. 1. Less priority in shopping list: Today's generation gives more emphasis on products which they can flaunt as a status symbol, and definitely home textile and furnishing comes as one of the last priority as these are more personalised items (for example, bed linen in bed room, towel in bathroom, etc). 2. As per buying habits, this is more occasion-specific like festival or house warming, in comparison to many other products which are bought almost throughout the year. 3. While for apparel, people keep many sets and SKU, but for home textiles, the number of sets /SKUs is much less. 4. When economy is not good, people go into the saving mode and do not want to spend money in such 'non-compulsion' categories, thereby impacting sales and growth. 5. Threat of import: Sometimes cheap qualities from neighbouring countries flood our market, and thereby hamper growth of indigenous industry. Of course, in the long term, customers do understand the difference in quality. But in the short term, it destroys our market. 6. Lack of design and product innovation: Although all industry members do talk about product development, but finally end up with either copying something of competitors' products or making another variant with some little changes. As a result, 'real' innovations go into back-gear, and finally struggle by selling commodity products impacting the margin.

What according to you is the five-fold path to overcome these challenges?

According to me, 1. Every company must allocate and spend judiciously an innovation fund, keeping in mind long-term horizon to reap complete dividends; 2. Every company should also launch seasonal collections (minimum four collections per year), and create customer awareness about seasonal or latest collections or style, thereby compelling to buy more frequently; 3. To enhance both width and depth of the product basket to create higher market size and potential; also to promote this category in the 'gifting' space; 4. Packing and packaging must be improved to international standards, as this is the first nudge for buying decision and also looks nice while gifting; 5. To create awareness about personal hygiene leading to more frequent washes and re-purchases.

How does e-commerce impact the home furnishing market?

With more women getting into jobs or business, this TG who are actually the buyer for this segment, are finding it extreme difficult in taking out time for physical shopping of this category. At the same time, due to growing rental or real estate costs, shopkeepers are unable to keep a wide variety of SKUs in their limited store space. E-commerce is estimated to grow at about 75 per cent CAGR over the next decade, and likely to reach US$ 60-75 billion by 2020. Home textiles and home furnishings are very suitable products for this channel due to lesser challenge on size or fit, fewer issues (against apparel) with 'touch and feel' and easy to pack and ship. E-channels can provide a much better medium for stocking of a much wider range, much more effective product display, lesser incremental cost in reaching out to customers in small cities and upcoming hot-spots.

Published on: 06/04/2015

DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.