GST is in place since last couple of days now. Being a part of Godrej group how do you assess the overall impact on furniture market? Also, what sort of advantages the company is passing on to its patrons due to GST?
Being the part of organised market we are having a benefit ranging from 1% to 10% coming in on exclusive price of the product which we are passing on to customers. Although, there is a slight confusion in un-organised segment may be due to non compliance of excise duty or other taxation.
I personally feel that over a period of time it will get regularized to way that consumer will be benefitted in terms of taxation. GST is a positive move and will promote consolidation from consumers’ per se as even the raw materials are going at 28%. There are more than 90% places where taxes are coming down for organized players. Moreover, if we look at supply chain there would be benefit in terms of custom duty.
Which category from Godrej Interio’s portfolio will be the most benefitted to consumer due to GST?
Like I mentioned earlier, it would depend on product and place where it is manufactured. Benefit at some places is as low as mere 1% to 2% ; whereas, in certain product categories it is as high as 10%. So, I cannot name any particular category.
Earlier, the company has announced the strong focus on Mattress category. Is there any change due to GST?
We would continue to focus on mattress as it is an important category for us. This category is related to wellness which is very critical platform. We have just introduced Sleep@10 where we are trying to explain our patrons how sleep is essential for the overall well being. We would be quite bullish on this category as it is the area which is related to health.
So, would Matters be the core category to focus for the company? What are the plans for other categories? Any plans to introduce new category?
It is an integral category for us because we are complete home furnishing segment. But, our objective has been to give complete solution to consumer and not just mattress. We do not intend to introduce any new category apart from our existing portfolio including homes, office, medical furniture etc.
Now, the focus is to expand the reach in this market. We are getting into psychographic segmentation of consumers instead of demographic. We are looking to expand our presence in different segments of home furnishing market.
Which is your best performing category so far?
‘Bedroom’ is the highest seller category for us then comes ‘living’ and ‘dining’. Kitchen is one area where we were lacking now we have extensive plans to take this category forward.
Kindly shed light on your current distribution?
Today, we have 700 plus touch points including dealers and retailers among about 230 are furniture touch points. Now we are working with IBM for complete Omni channel presence. In couple of months our e-commerce will also be up. The idea is to impart uniform experience to our patrons across the trade channels.
How bullish you are for online expansion? Also, how do you see the viability of online model for furniture category where touch and feel is important aspect of overall buying cycle?
As of now, we get maximum traction from offline channel due to our limited online presence. But, online is very important trade channel for us because consumer behavior is changing. They do not follow a set pattern of buying. And, furniture is an industry where customers do a lot online research before stepping in store. So, they might seeing it online first, and then visit the store to purchase or vice versa. Our endeavor to present on all channels seamlessly.
At last, mention the growth plans for this financial year?
We are looking to add another 175 touch points in this financial year; also we aim to grow at CAGR rate of 15% to 20% from existing 15%. Moreover, we would be very bullish on franchise expansion.