How would you explain the impact of GST on the kitchen business?
With a single tax GST across the country, shipment and sales of goods across the country has become easier, thus opening up the Indian economy further. While the local players are facing a lot more stiff competition, the bigger players are gaining in the process by offering better quality products at better prices. The transport cost of course has decreased due to fewer hassles and paper work and shorter transit time, thus saving on the stock holding cost. More stock would now flow into the market. Further, GST is leading to regional depot concepts, as the cost of logistics has come down. Smaller the local transport delivery circle, lower is the cost of damages and transit time as well as the rotation of money. This benefits the kitchen industry by encouraging deep interior coverage.
What would it take for kitchen companies to build a national presence?
I see that happening very soon, as in my opinion kitchens is the fastest growing segment within the building products sector. This is evident in the way the kitchen industry is mushrooming across the country. But a national player will need to act locally. For that, he would need regional production facility for customisation and reduced delivery times. He would also need to have local presence of service teams. Only then would it be possible to successfully attain and maintain a national presence.
What are the bottlenecks that small kitchen suppliers face while operating in vast geographies?
Logistics is a major factor when it comes to kitchens, especially when consumers have made partial payment for order confirmation. They want it fast. The making of panels, accessories, etc and sending them to the site, and then getting everything installed takes up to 20 days or more. The regional players would obviously take less time, given their geographical vicinity. Also, there is no concept of full load transport in kitchens; it is individual. So not only does this make logistics costly by adding to product cost, it also delays execution. Non-availability of installation teams at multiple sites is a problem and that too increases the turnaround time.