We are looking at crossing Rs 100 crore in the next three years: Deepak Bharadia
In conversation with Deepak Bharadia, Founder & CEO, Meine Kuche, who talks about the brand's future expansion plans.
Tags: Meine Kuche, modular kitchen brand, modular kitchen industry, modular kitchen furniture industry, Indian retail industry, Modular kitchen, customized solutions, GST, Goods and Service Tax, kitchen furniture marketBY Sunil Pol | March 24, 2018 | comments ( 0 ) |
While focusing on bottom line growth, Pune based premium modular kitchen brand, Meine Kuche, is planning to increase its stores count by five to six times in the next three years along with focusing to have wider digital presence. The brand in specific and the modular kitchen industry as a whole are currently grappling with challenges such as scarcity of talented manpower and growing overhead costs. The brand is equally focusing on the B2B and B2C segments. In the next three year, it is aiming to achieve Rs. 100 crore of revenue. Thus, talking more about brands future strategies, current industry challenges and the size of the modular kitchen furniture industry, Deepak Bharadia, Founder & CEO, Meine Kuche, spoke to Indianretailer.com.
In the current times what are the challenges that the modular kitchen furniture industry is facing?
There are still infinite challenges that we have in our country. It’s not very easy to scale up with multiple businesses because overhead costs are very high. There is a scarcity of trained and talented manpower specifically in segments such as modular kitchens. There is no direct feed of modular kitchen designers. So we have to bring in people, train them in-house to get them competent to our standards. It’s not just about designers, but about technicians who understand what the modular furniture is and hence, we see the government focusing on skill development.
Furniture industry is still largely unorganized because it’s carpentry driven. Brands in this have tried scaling up but had to wind up because of lack of labour, which shoots up the cost. Additionally, the consumer awareness is still very poor and hence, they fail to sustain.
Scalability has to be with sustainability. We, as a brand, are not focused on the top line of the business, like number of stores or number of touch points, but more of bottom line.
What is your current retail presence and what is the future expansion plan?
We are today a three stores company. Our presence is in Pune. We are catering more to Maharashtra, Southern Gujarat and Northern Karnataka and Goa. We are planning to grow our number of stores five to six times in the next three years. We will focus on our digital presence as today it is one of the most important medium for consumer.
Do you have any plan of portfolio diversification?
Not really. Wardrobe is something we have added pretty recently. Kitchen is our forte. We are looking at our presence in customized solutions. However, the category has scalability-related challenges. So, we have to look at mix of both scalability as well as sustainability.
Largely you are focused on B2B or B2C segment? And why is B2B more sustainable?
Largely our strategy is focused more on B2B as well as B2C. Close to 40 odd percent of our revenue comes from B2B and the rest 60 percent is from B2C, but that is kind of shrinking. In the developed markets like Singapore and Korea, about 90 percent business is B2B and 10 percent is B2C. We operate with a lot of industries such as builders. and developers. So, B2B is more sustainable as we don’t have to invest high retail and touch points.
How has the demand been after GST implementation?
Post GST, things have improved by 40 odd percent, and structural changes have happened with which the taxes have come down. Therefore, the unorganized share of the market is now moving into the organized space. Previously, we had to compete with unorganized players who used to avoid taxes, but today even they are forced to pay taxes. Thus, it can be said that the GST implementation is a boon not only for the organized sector but also for the unorganized sector.
What is your revenue projection?
Presently, we have Rs.70 crore of revenue. We are looking at crossing Rs.100 crore in the next three years. Lately, we have started exporting to Africa. The kitchen and wardrobe business that we do has come in largely from Europe. Also, India by itself is a huge market with growing lifestyle, aspirations going higher.
According to you how big is the modular kitchen furniture industry in India?
All put together, the modular kitchen furniture market may be a $4 bn market. Overall organized retail is going to expand, over the next two to three years. and it is expected to be a $1.1 trillion market of $620-680 billion market that we are today. In the next two years, the market opportunity will touch $300 billion.