Zolijns Design Competitive Analysis

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Proprietary&Confidential©ZolijnsDesignsPvt.Ltd.
ZOLIJNS DESIGNS
COMPETITIVE ANALYSIS
June-July-2013
BY:
SUPREET NAGI

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Indian Furniture Market: An Overview

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The Indian Furniture Market is estimated at ~Rs.70,000 Cr,
and expected to grow at CAGR of 11% for next 5 years
Comments
 The Indian furniture market is sized at Rs.
70,000 Cr., comprising 0.75% of the
Indian GDP
 The Indian furniture market is expected to
grow from Rs 66,500 Cr. in 2010 to Rs
1,12,000 Cr. in 2015 at a CAGR of 11% in
5 years
 The largest segment, wooden home
furniture, imports over Rs. 2000 Cr. in
2010, which is growing at a CAGR of 50%
Indian Furniture Market Size and Growth
(Value in Cr, INR)
Source: The Economic Times Report, 2011
66,500
112,000
0
20,000
40,000
60,000
80,000
100,000
120,000
2010 2015

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The Indian furniture industry is largely unorganized, with
the residential sector holding ~65% market share
Key Insights
 The Indian furniture market is highly
fragmented with ~85% of the national
production from regionally small size
firms
 The organized sector with ~15% market
share comprises of leading
manufacturers, importers and
dealer/distributors
 The residential sector with ~65% market
share leads the market followed by office
and hospitality sectors
 The Indian furniture industry employs a
total of 3,00,000+ workers
65%
20%
15%
Residential
Office
Hospitality
Indian Furniture Market: Segmentation
Source: IBEF Market Research Report, KPMG, 2007
85%
15%
Unorganized
Organized

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Godrej Interio, Usha Lexus and Evok are the top 3
players in the Indian furniture market
Source: www.blogsandyou.com

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38%
23%
3%
6%
6%
24%
China Others Germany
Italy Singapore Malasiya
Key Insights
 The Indian furniture imports are
dominated by the Chinese furniture
with ~38% market share, followed by
Malaysian with ~24%
 Italy, Germany and Singapore
comprise 15% of Indian furniture
imports
 Other countries for import include:
Philippines, Japan, Korea, Spain,
Indonesia
Indian Furniture Market: Demand
~60% of the furniture imports come from China and
Malaysia, followed by Italy and Singapore
Source: KPMG Research Report

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Huge investments are coming into the Indian furniture
market as large foreign players plan to enter and expand in
the Indian furniture space
S.No. Investor Date
Amount
(In INR) Comments
1. IKEA June, 2012 10,500 Cr  25 stores to be opened in India
 The company will initially invest
600 million Euros that will further
sum up to 900 million Euros
 In just 10 months the company got
an approval to set up stores in
India with a phased investment of
Rs 10,500 Cr
 The 1st store to open in mid 2015 in
Mumbai
2. Marina Home January, 2013 500 Cr  The investment will be spread over
a period of 5 years
 Target is to have 50 stores
comprising large and medium size
boutique stores across metro, tier I,
tier II and tier III cities in the country
 The company is likely to announce
its entry into Chandigarh and Noida
soon
Source: Times Of India Article, June’ 2012

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Indian Furniture Market- SWOT Analysis
The rising cost of the imports is the greatest threat the
Indian furniture industry may face in the near future
STRENGTHS
 Increasing demand in modern, clean, minimalist
designs
 Highly educated, skilled, young, capable & dynamic
human resources
 Established branding tradition
 India is becoming a world renowned outsourcing hub
 Emerging diversity in ideas and designs (Innovation,
Integration)
 Big democracy= big market & free media
WEAKNESSES
 Inefficient stock control and outdated systems
 Lack of trust in external organizations
 Fear of sharing knowledge & taking risks
 Lack of effective & execution frameworks
 Decreasing demand in traditional furniture
 Industry has slow absorption of innovation & change
 Lack of quality awareness
 Lack of quality in customer relations/ services
 Need modernization of infrastructure
THREATS
 Large fluctuations in stock control , affecting the
businesses
 Inter-company collaboration is unknown
 Rising cost of imported goods
 Pioneering uncertainties
 Too many players entering /exist in the market
 Fast change in IT Sector, new inventions (Technology,
Innovations)
OPPORTUNITIES
 Big potential market in Design sector & emerging new
market segment in Services
 Lower labor costs in outsourcing
 Research & Development capability
 More efficient production method
 Hybrid solutions– balancing & blending
 Lesser competition in modern furniture design

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Substitutes
No Significant Threat
New entrants
• Growing domestic market
• Too many new entrants
Competitive Rivalry
• Moderately competitive industry
• Transitioning from highly
unorganized to an organized sector
• Fragmented Industry
Suppliers
• Abundant supply of raw material and
labor
• Non -organized supplier base
• Imports getting easier as there are
number of international brands
Buyers
• Increasing demand from key user
segment for lifestyle products
• Majority of market still price
sensitive
• Increase in brand consciousness
Porter’s Five Forces Model for Indian Furniture Industry

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Competitive Analysis

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We identified 10 players across residential and office
sectors, in the organized, premium, contemporary furniture
space
Competitor Identification: Criteria
Competitor Selection Criteria
Organized
Premium
Contemporary
Residential and Office space
European/Indian

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We analyzed the competitive positioning of over 10 players
assessing their company situation and product capabilities
Approach for analysis of players’ competitive positioning
Competitor
Positioning
Product
assessment
Company
assessment
Company
structure
Store Look &
Feel
Geographical
footprint
Product
Portfolio
Customer
portfolio
• Ownership structure and employee strength
• Institutional historical situation of the company
Distribution
capabilities
• Outlets across India
• Geographical coverage of retail and
manufacturing operations
• Size and ambience
• Customer service
• In-store display
• Range of product categories and brands
• Services- Interior design, installation, sourcing,
after-sales
• Types of customers –
Residential, Office and Hospitality
• Extension of distribution network
• Geographical coverage

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BRANDS
PRICE
Low High
Multi-branded
Single
Branded
Affordable
Zolijns Designs falls in the premium category, along with
Poltrona Frau and Poliform

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An increasing number of international brands are setting up
retail outlets in India, leading to growth of the organized
sector
DELHI
Source: Company websites, news articles, industry reports
MUMBAI
KOLKATA
PUNE
BANGALORE
Key Insights
 Many European furniture companies
are present in India, due to the growing
demand for contemporary Italian
furniture
 Most palyers are located in New Delhi
and Mumbai followed by Bangalore and
Kolkata
 Companies like Casa Paradox and
Vadehra Furnitures have their
manufacturing units in India
 Brands like Poliform and Natuzzi are
present across major Indian cities
 Residential players sell mostly Indian
and Italian brands
HYDERABAD

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Competitive Analysis- Store Look and Feel
Marina Home excels in store look and feel and customer
service, followed by Casa Paradox
Companies Ambience
Product
Display No. of Setups Customer Services
Casa Paradox 5
Natuzzi Italia 7
Marina Home 8
Vadehra Furniture 3
August (renovation is
on)
1
Poltrona Frau 2
Poliform 5
Haworth India Pvt. Ltd None
Steelcase 2
Durian 5
Ratings: Very Poor. Poor Average Good Excellent
Source: Store visits

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Competitor Analysis- Customer experience when
starting a project
• Will revert within a week with options for various furniture
requirements of the project
• The clients are charged as per the project
August (Vasant
Vihar)
• Requires the client to select certain brands/product options
from the catalogue
• They will revert with options for the same
• Fee is charged for customization
Poliform
• Layouts required for providing design options
• Focused on proving interior design services
• Fee charged for design services
Casa Paradox
• Provides limited options for the same product; no
customization
• Design services available; sooner delivery due to retail model
Marina Home

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Critical success factors for Zolijns
• Meet varied customer demands across user segments and different
geographies
• Meet demand within the time committed to the customer
• Meet demand with efficient sourcing cost
Sourcing and Supply
Chain
• To maintain competitive pricing while offering value through
product customization, quality and deliveryCost Minimization
• Important to capture office furniture and contract segments
• Becoming increasingly significant for urban affluent households
• Represent high quality brands with great designs
Brand
Management
• To meet different customer needs across segments
• Affluent households look for customisation to meet their taste and
lifestyle requirements
Customization
• Efficient customer service at the outlet: Staff should be well
informed and pay attention to what the customer requires
• Great after-sales service for installation and maintenance
Customer Service

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Sources
1. Slide 3: Economic Times Article, December 24, 2011:
http://articles.economictimes.indiatimes.com/2011-12-04/news/30472125_1_ikea-
furniture-ikea-catalogue-mikael-ohlsson
2. Slide 4: IBEF Market Research Report, KPMG, 2007:
3. Slide 6: Slide Share: http://www.slideshare.net/Jigyasa/furniture-verticals-students-
submissions
4. Slide 7: Times Of India article, June, 2012:
http://articles.timesofindia.indiatimes.com/2012-06-22/delhi/32368420_1_ikea-ceo-
sourcing-medium-enterprises

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Residential Competitors

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NATUZZI ITALIA
Company Overview
 Year established: 1959
 Founders: Pasquale Natuzzi
 Locations: China, Belgium, Spain, UK, Japan, Brazil, India and Russia.
 Concept: Italian furniture, B2C
 Background/history:
• It designs, produces and markets sofas, armchairs and living room
accessories.
• In 1993, Natuzzi Group became the only foreign furniture company
to list on Wall Street.
Strategy/Growth plans
Major Customers
Other Information
 The Strategic Growth Plan of the company in India is to set up stores in
Ahmadabad, Pune and Goa
 The company also plans to develop a network of Natuzzi and Italsofa
branded stores across all key locations in Western Region including
Ahmadabad and Pune in the near term.
Source: Company Website, News articles
Product Profile
 Brands: home brands: Italsofa, Editions and Natuzzi
 Products: beds, armchairs, outdoor furniture,
 All Natuzzi sofas and armchairs have a ten year warranty on the
frame and two years on the upholstery, mechanical parts and
coverings.
 Services: delivery at retailer’s premises, anywhere in the world, products
invoiced in the retailer’s currency, and complete on-line pre- and post-sales
assistance
 Natuzzi Group controls 92% of raw materials and semi-finished products,
82% over services.
 Type of clientele: Residential: High-end individuals.
 Natuzzi is the largest former Italian furniture company with 2011 turnover
of euro 486.4 million.
 The Natuzzi Group currently employs about 6,740 staff.
 Unique warranty conditions defending value over time.
 ISO 9001 System of Quality certification
 ISO 14001 Certification for Environmental Control
 Certification of the Integrated Management System
Quality/environment ISO 9001/2000
 Natuzzi to invest 60 cr. For retail outlets here in India. 15 new showrooms
are to be set up by the end of this year.
Store Information
 No. of Stores: 123 world-wide and in India: Gurgaon, Kolkata, Hyderabad and
Mumbai
 Store size:
 Store Look & Feel: Great ambience.
 Footfalls:
 Customer service in the store: Average.
 Any marketing collaterals/promotions: no
 Anything which stood out in the store: The store ambiance was pleasing. A
customer can easily pick and choose a product as per the settings done in the
store.

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CASA PARADOX
Company Overview
 Founders: Raseel Gujral and Naveen Ansal
 Locations: New Delhi
 Concept: B2C concept with Italian furniture inspiration
Major Customers
Other Information
 xyz
Product Profile
 Brands: Casa Paradox, Paradox Pink, Paradox Black, Illustratti
 Products: Furniture: beds, sofas, tables, chairs, arm chairs, side boards
Accessories: lights, wall pieces, table lamps, signature pieces and Soft
Furnishings
 Services:
 Provide with services like: full interior designing, designer furniture
manufacturing, vaastu based planning and designing
 Sales and after sales services like: store to home transferring,
installation, and even future maintenance is charged after a particular
time period
 Commercial,
 Residential
 Hospitality
 A less into corporate
 First time exhibitor at Maiso et Objet in Paris, Sep 2013
 Listed in Black Book Top 100 and Forbes
Store Information
 No. of Stores: Paradox Pink: Mumbai, Paradox Black: Bangalore
 Store size:
 Store Look & Feel: Good ambiance. The ”Illustratti” display was amazing and
eye-catching
 Footfalls: Not much sales persons
 Customer service in the store: The customer service was good but the sales
person did not have an idea of the prices of products displayed
 Any marketing collaterals/promotions:
 Anything which stood out in the store: The Illustratti

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POLTRONA FRAU
Company Overview
 Founders: Sardinian-born Renzo Frau
 Locations: America, Asia, Europe, Africa, Oceania.
 Concept: Contemporary Furniture.
Major Customers
Other Information
 xyz
Product Profile
 Brands: Poltrona Frau, Cassina, Cappelini, Nemo
 Products: beds, arm chairs, sofas, chairs, tables, shelves.
 Services:
 Type of clientele:
 Residential
 Office
 Hotels
 Poltrona Frau came in India through Casa Décor ,a joint venture
with local Indian conglomerate Tata Group
 With the new opening Casa Decor estimates a 50% increase in
Poltrona Frau’s turnover in India within the next year, projecting a
turnover of 4 million Euros
 Casa Decor has been operating two other Poltrona Frau
showrooms in the metropolis of Mumbai and one in Bangalore
Store Information
 No. of Stores: 3: Mumbai, Bangalore and New Delhi..
 Store size:
 Store Look & Feel: Rough. No particular sectional displays. The store
floor is too noisy.
 Footfalls:
 Customer service in the store: Good customer service. Well greeted by
an Italian Lady who had been working with the company since many
years. Good knowledge of every product known.
 Any marketing collaterals/promotions: A complete product booklet.
 Anything which stood out in the store: The Le Corbusier furniture.

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MARINA HOME
Company Overview
 Founders:
 Locations: Dubai, Bahrain, Kuwait, Qatar, India and Egypt.
 Concept: Sensible fusion of Modern and the Rustic, Avante Garde and
the Exotic, Cosmopolitan and the Flamant.
Major Customers
Other Information
 Plan to invest Rs 500 cr in the next five years in India
 Target is to have 50 stores comprising large and medium size
boutique stores across metro, tier I, tier II and tier III cities in the
country.
 The company is looking to open stores in countries like the UK, the
US and Canada by the end of this year.
Product Profile
 Brands: Own home brand
 Products: beds, sofas, tables, side boards, accessories, soft furnishings
 Services:
 provide with design services and modifications as per
customer requirements.
 Sales and after sales services like: store to home transferring,
installation, and even future maintenance that is for 3 years
without cost and after that appropriate charges are applied
 Residential
 Office
 Hotels
 On Contract
 The company is likely to announce its entry into Chandigarh and
Noida soon
Store Information
 No. of Stores: 1 in New Delhi
 Store size: 21,000 sq.ft.
 Store Look & Feel: An elegant store, and the displays were according to
Indian customers, that is, a more classic furniture range. The entrance
was very appealing with a glass wall.
 Footfalls:
 Customer service in the store:
 Anything which stood out in the store:

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POLIFORM
Company Overview
 Founders: Alberto Spinelli, Aldo Spinelli and Giovanni Anzani
 Locations:
 Concept:
Major Customers
Other Information
 Ahmadabad store coming up soon by the end of 2013
Product Profile
 Brands: Verenna, Poliform
 Products : bookcases, wall units, wardrobe, kitchen solutions, beds,
side boards, walk-in-closets, tables, coffee tables, chairs and armchairs
 Services:
 Design and planning
 Furniture transport
 Product customization
 Commercial
 Residential
Store Information
 No. of Stores: New Delhi, Pune, Bangalore
 Store size:
 Store Look & Feel: the store was under construction but still well
organized with a setup of an apartment
 Footfalls: the wardrobes were full of mess and cardboard packing
boxes that was not appealing
 Customer service in the store: good. The sales person had a good and
relevant information about the products and the company
 Any marketing collaterals/promotions: catalogues with complete
product range
 Anything which stood out in the store: the wall unit on the entrance was
amazing and the lights that they had displayed were beautiful

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VADEHRA FURNITURES (Defense Colony)
Company Overview
 Founders: Tarun Vadehra
 Locations: Studio in Defense Colony, Delhi.
Manufacturing Unit in Sector 58, Noida, Phase III
 Concept: Unique interiors and finely handcrafted furniture
Major Customers
Other Information
Product Profile
 Brands: Own home brand: Poliform and Varenna
 Products: Beds, sofas, lounge chairs, arm chairs, soft furnishings,
tables.
 Services: sales and after sales services including:
 Installation.
 Full modification of the product according to customer need.
 Residential.
 Normal customers and high end customers.
 The company designs for the customers according to their needs and
wants.
 Have 3 stores at a single place showing different modules of design
like: art, furniture, etc.
Store Information
 No. of Stores: 3
 Store size:
 Store Look & Feel: Classic, home like feel. With no setups too a person
can see how the product will look at their place.
 Footfalls: No marketing / promotion criteria adapted.
 Customer service in the store: Was not so pleasing. The receptionist
was the only sales person.
 Any marketing collaterals/promotions: nothing.
 Anything which stood out in the store: The beds were outstanding. Both
elegant and modern designs made a big difference that may appeal a
customer’s eye. The lighting of the store made you feel like in home.

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AUGUST (Vasant Vihar)
Company Overview
 Year established:
 Founders:
 Locations/Concept: B2C approach
Major Customers
Other Information
Product Profile
 Brands: Fendi Casa, Poliform,
 Products: beds, sofas, chairs, arm chairs, tables, side boards, light
fixtures accessories, soft furnishings, kitchen sollutions
 Services:
 interior design services,
 installation,
 maintenance (chargeable after a certain period of time)
 Residential.
 Normal customers and high end customers.
Store Information
 No. of Stores:
 Store size:
 Store Look & Feel: under renovation
 Footfalls:

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OFFICE FURNITURES

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HAWORTH
Company Overview
 Founders: Gerrard Wendell (G.W.) Haworth
 Locations: America, China, India
 Concept: modern office furniture
Major Customers
Other Information
Product Profile
 Brands: own home brand.
 Products: movable walls, office desks, seating etc.
 Services: installation, sales and after sales, great extent of modification
ideas available.
 Type of clientele: Office
 A B2C category and also deals with private home offices
Store Information
 No. of Stores: 3: Mumbai, Bangalore and New Delhi
 Store size: 1160 sq. ft.
 Store Look & Feel: Simple store, with no much decorations.
 Footfalls: Quite expensive foe India Office Furniture Industry.
 Customer service in the store: Good.
 Any marketing collaterals/promotions: yes, catalogues of every product
is provided.
 Anything which stood out in the store: nothing was so appealing.

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STEELCASE
Company Overview
 Founders:
 Locations: Australia, China, Japan, Hong Kong, India, Malaysia,
Singapore.
 Concept: Contemporary Office furniture.
 began in 1912 in Michigan, and received its first patent in
1914 for a steel wastebasket.
 That led to metal desks, and have led the way with product
and service innovations ever since.
 Sustainability is embedded in everything.
Major Customers
Other Information
Product Profile
 Brands:
 Products: More than 500 product lines in Chairs, Tables,
 Services: Sales and after sales services including: delivery, installations
etc.
 Residential Office,
 Office
 N°1 in the office furniture industry
 $ 2.9 billion annual revenue in fiscal year 2013
 Approximately 10,400 employees worldwide
 Management systems for Quality (ISO 9000) and for Environment
(ISO 14000)
 Approximately 630 independent authorized dealers in over 850
locations worldwide
 $103.8 million invested in research, design and development
activities over the past 3 years
 More than 1,500 active patents and design registrations worldwide
 80,000 clients served over the past 5 years
 Since 1998, Class A Common shares traded on the NYSE under the
symbol SCS
Store Information
 No. of Stores: 21 plants: 12 in North America, 5 in EMEA and 4 Other
 Store size:
 Store Look & Feel:
 Footfalls:

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DURIAN
Company Overview
 Founders: Sajjan Dokania (M.D.)
 Locations: Mumbai, Ludhiana, Chandigarh, Gurgaon etc.
 Concept: contemporary furniture , B2C approach
Major Customers
Other Information
Product Profile
 Brands: home brand.
 Products: doors, laminates, plywood, contemporary furniture
 Services: sales and after sales: installation and repair in case of any
damage.
 Residential
 Office
 Hotels
 School in Rajasthan for girls.
 Sponsorship to students for education.
 Donation of life saving equipment to various Hospitals.
 Upliftment of socially backward masses in association with the
Rotary Club.
 Providing Medical Aid/ free drug during calamities for the victims.
 Recognizing the young talent from the interior designing field,
through "Durian Society Interior Design Awards" for last decade.
 Durian plywood has been the most preferred choice in the
industry for years
Store Information
 No. of Stores: 33 stores all over India mainly: Mumbai, Bangalore,
Delhi, Ahmadabad, Chandigarh
 Store size:
 Store Look & Feel:
 Footfalls:

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Zolijns Designs Private Limited
C 19 Nizamuddin West
New Delhi 110 013 , India
+ 91 11 4145 8383

Zolijns Design Competitive Analysis

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