Variety is spice of life and this factor the home décor industry understands better than anybody else. For them, it adds not just spice but keeps their adrenaline active and fighting fit. Of late, it has become mantra for their survival and success too. This is being followed by almost everyone in the industry from Asian Paints to Welspun India to Kajaria Ceramics to HIL and this list goes on.
Concept of one-product company gone
Days when a brand sticking to one line of product have gone as the competition is growing and growth concerns are mounting. Paint makers getting into construction chemicals has become common now. That was a trend started by the market leader which was later on mimicked by others in the industry. Welspun India, a home textile maker, has recently set up a plant to move into flooring business. Kajaria Ceramics, a market leader in tiles business, last year decided to move into plywood selling. Plywood makers like Greenply and Century Ply started manufacturing Medium Density Fibre (MDF) panel and this list seems to be unending.
Home décor not affected by e-commerce
A common thing among the home décor products manufacturers in India, even in this era of e-commerce, is their dependency on distributors and retailers to push their products in the market. Their approach is wider the network better the sales. For example, market leader in paints industry, Asian Paints, has dealer network of more 50,000. The same concept is followed by other paint manufacturers too. Even in case of other products like tiles, sanitaryware products and wood panel products strategy of the manufacturers is the same and that has not changed even after the invention of e-commerce. And now most of these manufacturers are trying to capitalise on this infrastructure of wide dealer network by adding more products to their portfolio. Thus, Kajaria Ceramics, for example, thinks that a person buying tiles means that he is getting his repaired/renovated and may also need other home décor products like wood panelling. Thus, Kajaria which has already built a reputation in tiles business wants to cash in on its brand name and dealer network by adding another line of product, that is, wood panel. This logic is being followed by almost all the companies who are diversifying.
On the lookout for sunrise industries
With real estate sector still in deep slumber for most of the home décor product manufacturers survival has become the only objective and keeping UpToDate is one of the ways to do so. A trend may also lead to excess capacity in the market as it has happened in the case of decorative laminates. In recent times, decorative laminates market is a category that has seen maximum capacity expansion over the past three–four years. This coincides with the real-estate slowdown in the domestic market, which has led to oversupply. The supply glut in the market has led to huge channel inventory and elongated credit cycles for new brands, now extending to four–five months. As a result, leaders in the industry like Greenlam and Merino have become more cautious and are tightening in terms of payments with strict norms for distributors.
Branding comes to limelight
Another way to keep ahead of others is through high degree of brand creation and brand loyalty. Most of the manufacturers have now realised the importance of branding and are focusing on brand creation and brand awareness.
Also, the manufacturers have realised the risk associated with the strategy of focusing on Metro and other major cities for growth. Now most of them have started diversifying into tier 3 & 4 cities/towns where they are seeing more growth. Also, in times of slowdown it’s the lower end products that provide lifeline and many of them have changed their strategies to move from class to mass.