2. Furnishing
• Home furnishings refer to the different kinds
of linen, , fittings, flooring and the bundle of
other accessories used for decorating and
beautifying our homes. It includes a wide
range of furnishing fabrics, curtains, rugs,
carpets, placemats, cushion covers, table
covers, bed spreads, bath linen and much
more.
4. Current Outlook & Issues
Mainly
unorganized
Economic
slowdown
• Organized retail expected to
grow faster
• Home Furnishing Industry is
dominated by unorganized
sector
• Though the FDI in retail is
open, global players still
waiting for the policies to be
relaxed
Hesitant foreign
players
Increasing cost
• This industry has very high
inventory carrying costs
5. Five Force analysis
Supplier Power
•Abundant supply of raw
materials and labor.
•Supplier base is organized
• High Imports.
Competitive Rivalry
Moderately
•Rivalry from international players
• Transitioned into an organized sector
Threat of New Entrants
•Entry of Prominent Retailers into
the segment.
•Branded furniture retailers
• Threats from foreign entrants
Threat of Substitutes
•Higher quality international brands
Customer Power
• Indian Middle class less price
conscious for good living.
•Increasing demand from key
user segments.
•Demand for luxury furniture
and furnishings.
Low
Moderate
High
7. Pros and Cons
Pros
1.High Margin Products
2.Growing Segment
3.Credit is given by whole Sellers
4.Create your own niche market
Cons
1.Heavy Investment Required
2.Heavy stocking is Required.
3.SKU is too High
4.Trends keep changing
5.Inventory might become dead stock any time
6.No Exclusivity Possible
7.Competetion too high
8. Business Model
• Sign up amount is too high for prominent
brands,around 15-20 lac for Dealership and 25-50
lac for distributorship(Particular area and
particular range)
• Profit Margin of channel partner is around 10-12 %
for branded products.
• No Credit facility is given from MNC’s to
distributors however a distributor gives around 15-
20 days credit in market.
• Incentives to dealers are generally given in form of
foreign Trips,TOD’s.
9. Cont…
• Huge Inventory is Required for major brands.
• Huge store space is required, Most of the
companies have minimum norms of at least
1000 sq. feet.
• No Return Policy in case of Furnishing
Business.
• Books are chargeable.
• Inventory is decided as per company.
