When capacity goes much beyond demand, the quality of a product takes the first toll. In a desperate selling mode, few of the HPL manufacturers began offering texture laminates at dirt cheap price to gain some foot hold in the north market. After three years this product category has gained a significant volume in tier two and tier three cities. The emergence of 0.72 mm decorative laminates in folder form are have began giving fight to 0.8 mm market share in pockets. It is also evident that 0.72 folders are gaining access to new application where cheap 0.6 or liner laminate were being used instead of adding to new customers from paint category, 0.72 mm has began eating in to 0.8 mm sales as well.
A survey done by Ply reporter in UP, Haryana, NCR region and Bihar, it became established that if a laminate stockiest has a 0.72 mm folder that offers design and flashy textures packed with range of more than 100 designs then stockiest prefer promoting it to small furniture markets and rural markets because these are fast moving and offers better margins compared to the price of 0.8 laminate folders. With lesser inventory due to small range, a small dealer is also able to become distributor hence they are able to sell it in their 50-70 km retail market periphery by catering to cheap yet fancy favorites markets.
Survey proves that market has seen a decent growth in 0.8 mm laminates with more numbers of new factories in northern India and Morbi. With the success in 0.8 mm category, many of the new comers and volume players are choosing 0.72 mm which is an easy way to cater immediate demand. A dealer from Gorakhpur opines that he sells this product as equivalent to 0.8 mm range and his per sheet margin is same. Survey indicates that more dealers/stockiest are looking for such an economical grade laminates range because it is easy to sale and their margins intact.
With around 15% cheaper price than 0.8 mm, these laminates offer an extra margin to retailers thus provide temporary relief from competition to all the players involved in this chain. But they are failed to recognize that profitability in laminate business is touching to new lows that is not healthy for anyone be it manufacturer stockiest or a retailer.
Experts and leading players warn that growing offering of 0.72 mm laminates range will damage HPL industry and jeopardize the sustainability of many mid segment brands in future. Immediately, it will harm 0.8 mm laminates range but in the long term, it will affect the sustainability of producers and the product as well.