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HomeKITCHEN & CABINETRYGodrej Interio is Ramping up its Kitchen Business

Godrej Interio is Ramping up its Kitchen Business

India’s largest furniture maker Godrej Interio is ready to ride the tide in the kitchen business. It is expanding its franchise network and adding categories to realise the potential of this business, which is showing a change in the way it is perceived by customers. Senior vice president and business head Swapneel Nagarkar talks about why Godrej Interio is ramping up its kitchen business.

“Though 70 per cent of the kitchen market in India remains unorganised, the shift towards factory-made kitchens is perceptible. The organised sector is growing by 15-20 per cent annually,” says Nagarkar.

Nagarkar tells me that the behavioural shift became visible after the Covid pandemic. “Consumers are preferring factory-made products now, as they want to avoid having workers inside their homes. Besides, the interest in the kitchen has gone up significantly, after entire families were forced to stay at home and cook and eat together. There is a greater appreciation of the kitchen space.”

The narrative about the modular kitchen had been building up for the past several years. But cost usually became the deal breaker and customers eventually favoured the economical carpenter. As a result the designer kitchen remained an aspiration, with most of the demand coming from the premium and mid-premium segments.

Post Covid, however, the qualitative aspects of a kitchen have come out starkly. Kitchen sellers are now talking confidently about green materials, energy-efficient appliances, ergonomic design, and of kitchen being a bonding space. The customers are listening, because for the first time they’ve used the kitchen as a collective.

Godrej Interio, which is a Rs 3,000 crore furniture behemoth, is aiming to catch this shift in customer perception and has put several marketing initiatives in place, according to Nagarkar.

“Our kitchen revenues currently are at Rs 125 crore, and we feel that the potential of this category is yet to be realised. I believe that as a company we can achieve a yearly growth of 25 per cent going forward.”

Nagarkar reveals that the company has chalked out plans for market expansion and garnering more revenues. It is targeting the mid-market in tier 2 and 3 cities, where it will appoint 30-35 new franchises in the current fiscal. “We are already present in the major metros and tier 1 cities through our Godrej Interio galleries. However, we believe that the smaller cities are underserved. And the mid-market, where ticket sizes range from Rs 1.50 lakh to Rs 3.00 lakh, accounts for the largest share.”

  • Godrej Interio is Shoring up its Kitchen Business
    Godrej Interio Kitchen Gallery at Indore

Godrej’s present network consists of about 100 furniture galleries, of which around 70 also offer kitchens. Nagarkar says that the expansion will be in the exclusive Godrej Interio kitchen gallery network. These will be 1,500-sft outlets managed by franchisees and will display 2-3 steel and wood kitchens in live environment. Branding and lead gen support will be provided by the company.

“We have always focused on investing in building the Godrej Interio brand salience, especially in a growing category like kitchens. Towards that goal our spends are increasing year on year. This year too, a healthy growth of 20-25 per cent in budgeted spends has been planned.”

Training and capability enhancement is a key aspect of the company’s expansion, considering that the business requires last mile civil and plumbing work before a sale can be completed. “We have to ensure that our channel partners have this competency. In fact this will become an important differentiator for us, as service plays a major role in this business.”

Godrej’s strong standing in the institutional market, says Nagarkar, is also helping it grow the kitchen business. “Institutional sale is an important revenue stream for us. Key clients such as NTPC, BHEL, etc have ongoing expansion of their residential colonies. Besides, we are also present in the residential real estate segment where we come across projects for 200-300 kitchens. As a matter of policy, we route all such institutional business through our channel partners.” 

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Steel kitchens continue to be the mainstay of Godrej’s business, primarily because of its legacy dominance in the steel storage category. Nagarkar says that steel is a vibrant niche to be in, and customers respond well to the inherent qualities – water resistance, long life, anti-termite – that steel furniture conventionally possesses.

Last year had been bit of a challenge as steel prices had shot up sharply, leading Godrej to innovate and optimise the use of metal. “We redesigned our cabinets and did away with some components, like separators, which were of no great value to the user. We simplified the overall design and made the storage more accessible. Through design innovation we were able to reduce cost by about 15 per cent without compromising on the quality of the raw material.”

Nagarkar expects the steel kitchen market to grow rapidly, albeit on a small base. “It already has mature budget, mid and premium segments. But wood will continue to dominate as it allows for high degree of customisation. At Godrej Interio we are offering both categories in order to address the entire market.”

Wardrobes is the other category which Nagarkar is eyeing for growth. “Traditionally we have been strong in standalone wardrobes, so we understand the category. But built-in wardrobes are now in trend. Wardrobes and kitchens are synergistic categories and we do not want to miss this growth opportunity. Our channel partners and customers can look forward to the launch of our built-in wardrobes within 5-6 months.”

ALSO READ: The Big Picture: Build a Value Proposition, say Kitchen Industry Leaders

Godrej’s renewed focus on the kitchen segment will augur well for the entire industry. Its leadership in furniture and best practices could well raise the bar for other players and hasten the shift towards value-based kitchens.

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