Challenges and Opportunities for a new Entrant in Home Furnishings

Siyaram Poddar Group • • Inception in 1954 A family promoted group with diversified interests in auto & pneumatic tires and textiles – Govind Rubber Ltd.

– Balkrishna Industries Ltd.

– Siyaram Silk Mills Ltd.

• Total turnover of over USD 500 million

Siyaram Silk Mills • Largest manufacturer of blended apparel fabric in India • Over 30 years of textile manufacturing experience • Vertically integrated manufacturing setup • Own and operate multiple apparel and apparel fabric brands • Recent diversification into Home Textiles

Textile Scenario in India • Poised for growth in domestic sales and exports

Home Textile Market in India

Home Furnishing Industry • Urban home furnishings retail market in India is estimated to be Rs.9,300 crore and is expected to reach Rs.20,000 crore by the year 2012 • Bed and bath furnishing products make up two thirds of the market • Indian Furnishings market comprises 94% of the unorganized sector • Shift in the industry toward branded products has become more pronounced in the recent past • Opportunity seen by international brands as Indian economy booms

Drivers for Growth • • • • Urbanization and Corporatization Increasing incomes and purchasing power of the Indian consumer Change in consumer attitudes Organization of retail

Urbanization • • • Over 300 million urban population in India Urbanisation in India is faster than any other country in the world Resulting in changing consumer behaviour across segments

Increasing Spending Power

Consumer Spending Pattern

Consumer Attitides • Greater spending power as an economy • Increased exposure to various international lifestyles resulted in the Indian consumer evolving into a design and trend conscious citizen • Today ’ s Indian consumer is beginning to prize aesthetics and elegance • Indian home owners see their homes as an extention of their personality and thus take special pride in doing up their homes • Home is a status symbols

• Observations on Consumer Behaviour in Home furnishing Relatively price insensitive as compared to apparel textile prices • Main focus on design and colour • Diverse preferences geographically and culturally • Majority planned and seasonal purchase • Consumer largely unaware of fabric performance and quality at the time of purchase

Cut Service • For the retailer • • • Reduced investment in fabric stock Greater variety in the showroom Newer colors and designs available • For the suppliers • • • • Ease of production planning Lengthening of product shelf life Increased warehousing and logistics cost of fabric Ability to communicate with the consumer

Cut Service • For the consumer – Improved presentation and better shopping experience – Possible to make price comparisons for the same article in multiple stores – Association of a fabric with a source apart from the retailer

Challenges and Opportunities • • • • Educate the consumer – Modern tastes and styles – – Performance of the product ‘ Real ’ value for money Inconsistency of price points across retail outlets Maintain a robust supply chain to handle seasonal demand shocks Move from unorganized wholesale to organized wholesale

Branding • • • • • Change approach to that of a packaged product similar to bed sheets and bed linen Develop ability to create a demand for one ’ s product by advertising a ‘ Branded catalogue collection ’ Ability to educate consumers through advertising Establishment of MRP ’ s – will instill consumer confidence and brand trustworthiness Emergence of brands across all price levels and consumer segments as a strategy for product differentiation

Industry Vision • • • • • • • Educated and discerning consumer Demand for Indian brands internationally Evolution of large format MBO ’ s for home furnishings Tightening of norms for Fire Retardant and other specialty fabrics in hospitality and healthcare industry Entry of more branded players at all price points Competition leading to demand for innovation in product and presentation Ultimately lead to more investment in the industry, leading to even higher growth

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