The focus on affordable housing, growth of the residential realty, increasing disposable income, etc are reasons enough why industry veterans are vouching for investing in the modular kitchen industry
The time is ripe to invest in the modular furniture industry in India. According to the World Bank, India’s organised furniture industry is expected to grow 20% per annum over the next few years and is projected to cross US$ 32 billion by 2019. Further, Redseer Consulting report states that by 2020, India’s furniture industry is expected to grow to $35 billion. Kitchen is estimated to account for 10% of the furniture industry; a reason why investing in kitchen business is gaining traction.
Over the last few years, there has been an uptick in the affordable housing sector – both from supply and demand side – implying that it would be a key driver for the residential sector in coming times. With the government nod of infrastructure status to affordable housing in Union Budget 2017-18, this sector is expected to grow at a high pace. It’s anybody’s guess, that a house would invariably need a kitchen irrespective of the size, and that presents a business opportunity for the kitchen players to suitably offer solutions to new customers.
Research from realty firms states that affordable and mid-income housing will continue to drive residential housing, both in metro and tier-II cities. In fact, there has been an uptick of almost 15-20% with a preference for ready-to-move-in units owing to RERA and GST benefits; this augurs well for the kitchen industry.
New mall supply is set to touch 10 million sft in the top 7 Indian cities in 2019, and customer experience is set to completely transform the retail business. The demand for high-quality shopping experiences is also spreading to tier-II and III cities. These markets provide lucrative business opportunities for kitchen players, and they are accordingly reaching out to new customers in these markets.
Over the past two years, India has managed to jump a significant 52 positions in ‘Ease of Doing Business’ rankings released by World Bank. This was primarily on account of improvement in 6 of the 10 categories assessed. Of these, dealing with construction permits showed a massive jump on the back of government’s policy reforms. These ongoing reforms to improve the ease of doing business has come at an opportune time, many players both domestic, as well as international, are looking for newer markets for business expansion.
India’s furniture and furnishings industry will need 11.3 million skilled workers by the year 2022, states an NSDC report. To this end, the Furniture & Fittings Skill Council (FFSC) has unfurled a raft of training programmes for meeting the demand for carpenters. This in itself is a big business opportunity for players who want to be specialized service providers to kitchen manufacturers.