Godrej Interio (GI) is a premium furniture brand in both home and institutional segments with a strong commitment to sustainability and centres of excellence in design, manufacturing and retail. The company has just announced the aggressive plans to grow their retail presence in Delhi and NCR region. In an exclusive conversation with Anil Mathur, Chief Operating Officer, Godrej Interio further sheds light on the growth strategy of the company.
Shed light on your experience while working in Delhi/ NCR market?
Delhi contributes 135 crores to the brand’s overall annual business revenue which is 60% of overall Delhi/NCR region revenue of 225 crore. The company (office furniture segment) closed at 1400 Cr in 18-19 and is expected to grow at 22 % in 19-20 where the industry growth is 8-10%.
Delhi and NCR are expected to register an impressive growth of 20% respectively in the home furniture segment in FY19-20. Currently, Delhi has a market share of 10% with expected annual revenue from the northern region being 75 crores.
Last year, Godrej has introduced ‘Script’ primarily to cater urban population. How do you differentiate the product offerings of ‘Script’ and ‘Interio’ when your core philosophy seems to be same?
There are two different target segments that we are catering with these two brands. These two brands are quite differently positioned in terms of product offerings, in-store experience, TG and pricing. Script caters to consumers who have evolved lifestyle and scouting for aspirational products on premium pricing. Script is mass premium brand, whereas Interio offers mainline product category.
As I had mentioned, though people are experiencing changed lifestyle, still there is large share of consumers who focus more on functionality with personalization as per their current housing arrangements. With Interio, we particularly want to focus on those customers.
Rental model seems to creating a lot of disruption in furniture category. With Interio, do you have any plans to leverage out of this emerging model?
We had piloted the rental business but we withdraw the model very shortly. What we realize that subscription model is best suited to fulfill transient needs of urban consumer who falls under 35 age bracket. Our TG is above 35 individuals who are settlers and want to own the furniture instead of renting. However, we are working few Chandigarh based resellers to sell cobranded furniture. Godrej Group has no intention to scale up subscription business.
IKEA has just announced expansion via small format stores and also online. The strategy seems to be resonating with your current business model. How do you see this development?
Yes, I do agree that our store size is also between 5000sq.ft to 6000 sq.ft. However, I don’t see any larger impact of IKEA in the markets where they are operating currently in India. Anybody who is in the space of organized furniture, is our competitor, IKEA is no different to us. Having said that I would also highlight that Indian furniture market is huge; hence there is space for everybody.
These days, many retailers are focusing more on experience centers instead of plain retail store and adding features such as Cafes as the part of customer experience strategy. What are your plans in this regard?
We aspire to use new age technologies such as Artificial Intelligence and Virtual Reality amongst others as far Interio is concerned. We might think of Café sort of format with Script in the time to come.
How much investment is planned to ramp up the expansion plans?
We are growing at CAGR of 19%-20%. We plan to invest 300 cr by the end of this fiscal. While the brand currently has a strong network of 15 exclusive stores in Delhi NCR region, it plans to launch 12 stores to be opened during the year.