The kitchen industry in India could be at an inflection point, going by the developments taking place at policy and industry levels.
Home improvement has emerged as the most significant trend across market segments, the key drivers being heightened concerns of safety & hygiene and the work-from-home imperative. The kitchen industry is going to be a major beneficiary of this trend.
The Indian home improvement (also referred to as home and living) market is estimated at $25 – $28 billion, with furniture accounting for about 50 per cent. Nodal foreign investment agency Invest India valued the Indian furniture market at $17.4 billion in FY21. It predicts it will reach $37.7 billion by 2026, growing at double-digit CAGR of 13.37% during 2020-2026.
The kitchen business forms a part of this vibrant furniture sector, but with unique characteristics. One, the kitchen is a permutation and combination of modules and services. It requires integration of furniture, hardware, appliances, and countertops. Besides, lighting, flooring, plumbing, electricals and ventilation are also to be incorporated.
Another, unlike most home improvement projects, the kitchen is dynamic. It keeps transforming with passage of time as family size, needs, tastes, technology and product performances change. The kitchen calls for continuous investment, and therein lies the opportunity and challenge.
The kitchen business offers opportunities for developing lifetime customers through redesign, additional sale, upselling, service and maintenance. The need for brands to build customer communities can never be underestimated. Marketers who consider the kitchen as a product and not service, do so at their own peril.
The challenges however are multi-fold. For one, the industry continues to be largely unorganised. There’s no umbrella body in place to bring manufacturers on a common platform where standards, best practices and policies are developed.
There is also a stark absence of a distinct kitchen profession, which is critical to the success of the industry. The industry needs to foster its own design and sales professionals backed by curriculum, knowledge and certification, who can develop India centric designs, write specifications, sell as per specific needs, and monitor execution of projects.
A small beginning has been made by seasoned industry professional Gopal Dwivedi, who has published two technical books – Modular Kitchen Planning & Designing Guide; and Modular Wardrobe Planning & Designing Guide. Both are carefully crafted texts that explain various aspects of materials, design, sales, manufacturing and installation, all relevant subjects for students, professionals, and entrepreneurs.
Lastly the industry needs to digitalise. Digitalisation will enable sellers of kitchens to be integrated with the manufacturers and installers in real time, and create deviation free BOMs and quotations, commit accurate delivery dates, and ensure first-time-right installation. More importantly, digitalisation will provide transparency to the customer and allow apple-to-apple comparison. It will also compel sellers to compete on knowledge and service rather than just price.
Make for the World
The Indian government has identified furniture as one of the key categories for taking made-in-India goods to global corners. Its approach for boosting the furniture sector involves building competencies for making the entire value chain cost efficient. And, doubling or tripling exports by increasing the size of the industry within the next 5-6 years. The upcoming International Furniture Park in Tamil Nadu, which was announced in March 2022 and is expected to draw investments of nearly Rs 4,500 crore, is a step in the right direction.
The coming years will see a shift towards large scale manufacturing of furniture, hardware and electronics, all of which will add scale and value to the kitchen industry. Furniture fittings major Hettich India has said that it will invest Rs 1,000 crore over the next 4-5 years for setting up a new plant and adding capacity at existing facilities. Its Indore plant, which is the largest Hettich facility worldwide, is already supplying hardware to China markets.
Confirming that the Indian kitchen market is underserved, furniture components maker REHAU announced its foray into the customer-facing kitchens business in March this year. The company, which is a leader in the edge band segment, will offer components including cabinetry, surfaces and hardware, besides setting up a network of kitchen dealers. It has also said that it will bring Titus furniture fittings to India under an exclusive distributorship agreement.
The built-in appliances segment, another aspect of the kitchen business, and estimated to be a Rs 2,200 crore market, is witnessing a lot of churn. In 2021 refrigeration and laundry major Whirlpool of India completed its acquisition of market leader Elica PB, to strengthen its play in the kitchen segment. This year Crompton Greaves acquired kitchen equipment and small appliance maker Butterfly Gandhimati for Rs 2,076.
Crompton, which considers kitchen as a strategic space, has also launched 38 models of built-in appliances ranging from chimneys to gas hobs, ovens, microwaves and dishwashers. By incorporating unique features such as self-cleaning filters, gesture control, BLDC motor, and auto switch-off, the homegrown brand is raising the stakes in this white space. In a move that is likely to disrupt the market, the company is doing away with the need for after sales service, offering 10-year warranties, and building a network of lounge-like experience centres across India. Kitchen sellers are going to play an important role in Crompton’s marketing.
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The kitchen industry has another template for growth and innovation. Wify, a start-up that had launched itself at the India Kitchen Congress in 2019, is offering installation and after sales services to kitchen and home improvement brands in over 60 cities, thus enabling them to grow nationally. The company offers its clients a dashboard through which they can monitor their service requests, completions, customer feedback, etc in real time. Wify is servicing more that 100 brands including IKEA, Livspace and Homelane through a team of over 3,000 workers it has trained and certified in-house. The company has received nearly Rs 25 crore in seed and pre-series A funding from marquee VC funds including Unitus Ventures and Blume Founders Fund.
With so much happening, it is time for the kitchen industry to take the cue and design its unique growth strategies.