The customers are coming back to the shops and showrooms, but footfall is low compared to the before Corona period. The industry feels that it may take some time and gradually will come to normal. At present the customers are frequently searching online. They research a lot before buying what they require and going to the physical store. It is very important even for smaller businesses to do something online to allow the customers to recognize them. Many in the Industry are putting lot of online content at the moment and going online for e-commerce as well to follow customers and working online intensively. Also making our dealers to go with online presence, and also working with franchise to work on setting social media accounts to be able to make presence in their area, so that people know that ever. As the market is not going to come back soon and it will take time to the end of this year, or even longer from two to three years. So, today cash is the king, and we should preserve it for future business.
“In India, companies have built their brand very successfully in furniture hardware - Mr Jurgen Wolf Managing Director, Hafele India Pvt Ltd
India is very inspirational in terms of using good quality product, for example the kitchen appliances acceptance is very good and with a high price tag. There are people who do not have capacity to buy engineered products that is in every market. In last 20 years, India has evolved tremendously for using aspirational products, in terms of designs which have been adopted all over the world and also created market within India.
If any company sends their sales people in the market, who don’t know how a brand can be built, they cannot sustain. Customers are so much informed today; they know what they want by having lot of research online. So, learning is perpetual.
NEED OF THE HOUR: INNOVATION THAT CAN AVOID TOUCH
There are many product varieties that have not taken note previously. Now, all of sudden they have come into focus. For example, some time ago, electronic locks, that need not require touching to open the doors, and automatic sliding doors came into the market. These are now becoming more popular. There are a few simple hardware products launched very recently that can open the doors without touching the handles. There are foot brackets, which also can open the door. It is most suitable for residences, and all of sudden people are asking for it. It has different execution and on that basis it is available on affordability of the customers. It would not be available for everybody, there is a different market and everyone can not afford everything. So if India can afford electronic lock similar to the other country in the world, this customers segment will definitely buy it.
PUTTING MANUFACTURING FACILITY IN INDIA
The scenario of Indian market at present holds a lot of mistrusts as many manufacturers are there who are unorganized and can’t be trusted as they don’t understand quality. Many experts think that India is not ready yet to efficiently cater the market and they choose to buy more products globally. However, in India lot of companies are also up there, who have built their brand very successfully in furniture hardware segment. The concern remains that these two or three companies are not an industry; we need many more of it.
Now as the anti-China movement is on rise, people of course are looking for manufacturing in India—if not directly then certainly with manufacturing partners. It makes sense to have Indian manufacturing, and there is no doubt about it. But, when you do this you need to have partners and that need to be professional and they are needed to be able to understand quality and work to scale up.
So, going forward in the post-Covid scenario, India is going to be a manufacturing place but India has to really grow and evolve and India has to mature itself in terms of quality and manufacturing. There is a need, option and opportunity manufacturing brands to pick it up.
IF ANYONE WANTS TO GROW, THEY NEED TO FOCUS ON PRODUCTS RATHER THAN RELYING ON OTHERS. IF ANYONE DOES BUSINESS PASSIONATELY AFTER STUDYING THE MARKET THEN BUSINESS WILL SURELY GROW. OEMS CAN’T TAKE WHOLE BUSINESS AND THERE IS NO WAY THAT CARPENTER’S BUSINESS WILL NOT SURVIVE AS THERE IS STILL 97% CARPENTRY MARKET. DOMINANCE WILL BE OF RETAIL AND TRADE. OEMS NEED TO EVOLVE BUT TRADES CAN GROW IF THEY HELP IN PRODUCT CUSTOMIZATION” - Bharat Kawedia Managing Director at Modulinea Modular Systems.
SELL SOLUTIONS, NOT JUST PRODUCTS
It’s very hard to predict how the customers are going to behave for few following months. But one thing that can be said for sure is that the customers are willing to pay for quality services. If you are selling a product in a competitive price but fail to provide post-selling services, the customer will choose to buy the same with even a higher price from someone with better services. Now the display centers are open and operational in Kolkata, Hyderabad, Delhi, Mumbai, etc. As everyone in the channel and system are equally affected, all have to overcome the problem together only.
“Manufacturing in India has lots of advantages and it will pay back to the Indian economy as well” - - Mr Rajesh Bansal Funder Chairman & Managing Director, Dorset Group
If any dealers are just sitting idle thinking that big player will be looking after them, this is not going to happen. India has to change the way to work, that has been going on for several years. Now you need to be active for not just selling products but to sell solutions as well to be successful. So, focus on producing complete solution, not just fitting or so—a holistic approach is the key.
HEALTH IS THE PREDOMINATE FACTOR
Health is predominately the main factor. As Dorset Group call it as, “hit-refresh and re-start”. It is not a natural calamity for which everything is going to toss, so we have to stay positive and calm. The entire industry needs to understand each other and treat it as a family. The day will come when there will be no-Corona. In last few months we have realized that it will stay for several years, so we will have to live with it and stay positive and fighting for life and survival.
The dealers, Partners, and Manufacturers will have to divide their objective into two phases, short term and the medium term, and learn cash management to run the business. Today the cash is the king, so we all need to adopt short of practices which the need of the hours. There are following that can be considered.
- Do not over leverage your business and work on the credit cycles. v
- Buy on cash from suppliers and ensure the customers to pay before delivery
- Customers will come; we should keep patience and ensure how to serve them.
FUNCTIONALITY AND FUNCTIONAL HARDWARE
Furniture functionality need to be displayed but at present only virtual showrooms will work. The Dorset Group has created a full-fledged virtual showroom where the customers will have complete experience as they were experiencing in physical showrooms. So, this will bring new energy, new style of business, and ways and means for everyone. We all need alignment, positivity and find ways that how we have to work. The customers will come, as after few days they will learn to live with new normal. Initially they will try to be away for which Dorset is ready with virtual showroom.
CASH MANAGEMENT
The cash is important, so you have to manage the cash balances as well as organize it in such a way that there is no panic from the competition, manufacturing and the industry side. Reach the customers and put them to your dealers and channel partners. As manufacturers or importers, it is your responsibility to create demand and make the customers convinced about the product. Creating the demand is a collaborative advertisement affect. The dealers and partners have to supply them to customers as a partner to the company.
DEPENDENCY ON OVERSEAS SOLUTION
There are various products coming in the market like touch free doors. There are products which can be opened by foot. I would like to convince people that it can be hazardous as shoes can be virus careers; so be very careful. India is graded up with base manufacturing company and manufacturing is a clear cut way forward. It is a perception that import plays an important role in hardware. The companies’ responsibility is to sell. There are suppliers from China who are offering at competitive price. Companies in India have those products also. If you have created your own brand, then people easily copy them and bring it by making them in China at cheaper price. But you need to supply good quality product at competitive prices as quality will be the key to sell post-Covid.
There is lot of advantages for manufacturing in India and it will pay back to the Indian Economy as well. But, the price advantages will be there only when the customers, dealers, stake holders and demand creators will promote the made in India products and boost it demand.
The government is also promoting in terms of boosting Made in India products by increasing duties on imports of non essential goods. So, definitely there will be cost advantage to the customers. For that we have to change our working in times to come. Definitely the hardware for smart furniture will be manufactured in India. People are investing lot in bringing their technology into India.
CUSTOMERS FEAR TO VISIT SHOPS/SHOWROOMS?
Today everyone is having much of information flowing about health, business, etc. Moreover health is very important these days and even in all time. Everybody needs to take care of their business and career so sometime they put health backburner, while making money. But one thing has been noticed these days that health has become a business tool as with even a mild fever one will not be able to go to office, shops, or board a flight, or attend even business meetings. Even with dealers and sales personnel and many more it is not possible. To this end, companies have taken health initiatives.
“A number of factories are being built in India with lot of technologies and products innovations” - Mr Alok Aggarwal Managing Director, Ozone Overseas
India is not a country of nano-technology. The consumer sooner or later realizes that the cheapest product is not the right product and come back to quality or the brand in the market. So, operating efficiently is very much important in the entire sales process. So, things now are going to cost conscious. Lot of dealers, architects is willing to learn and it is the duty of the sales people and company to bridge that gap.
SOLUTIONS AFTER POST COVID SCENARIO
Although lot of companies are making efforts for training people but it needs repetitions. The dealers’ network is very important and OEMs are equally important but the requirement for both are different and that are to be dealt differently. The margin at the dealers’ network is very important and for that the company has to invest in trainings.
India is a wide country with lot huge population, so lots of competitors are going to buy at the dealers’ network. An OEM install furniture at miles away and with time that need a trouble shooting, so there is a huge replacement market in India that people want product in retail in small quantity for replacement and serviced by carpenter. So, the large scale factory needs to give last mile service and for those sales are happening to the service network. So importance of the hardware network will be there and continue to be.
The company as well as the channel partners will have to build confidence in their walk-in customers” - Mr Raman Koul Managing Director South Asia, ASSA ABLOY Group
SPACE SAVING FURNITURE
For space saving furniture, we offer solution for space saving at home is a bed that can be shifted into wall. In this situation of Covid, lot of company is going to give option to their employee to work from home. So, these hardware will be space saving. Lots of factories are being built in India with lot of technologies and product innovations. But, it is a matter of time. The Indian Hardware Industry is manufacturing lot of products.
WILL PRICES INCREASE?
Price are definitely not going down and likely to go up as the supply chain is disturbed and the increasing exchange rate. Despite that there will be consolidation as this disruption will be temporary. I think lot of small companies will not be able to survive with the financial impact post covid. It is going to be very interesting to see how the world comes out of it
The situation begins to come to normal across the globe and the recovery rate from infection is increasing. This brings positivity in us. It is not the government bringing opening the public places but it is the confidence among the people that they are safe while going for shopping, or bringing the carpenter at their homes. The staff at the retail counter thinks that they are safe. There are lot of variables, data, medicines and also the government regulations. But the country like Japan and Korea are near normal because the people have confidence that they are safe. The company as well as the channel partner will have to build confidence in their walk-in customers. That will help the business to come out fast. The trade channel should be prepared for that. There should be lot of emphasis for the training of the people, who are at retail shops and interacting with customers. The customers should feel that the trade is adding lot of value. As far as OEMs are concerned, I think there is a lot of OEMs who do not show loyalty to different suppliers and create innovations.
suppliers and create innovations. If Indian has to move up line in value chain or suppliers have to bring in products and produce locally, which are good in quality and lower in competitive cost or produce very competitively, similarly the OEMs should also bring innovations on the table which only lack with the suppliers interests. That will bring the profitability and remove the issues of price.
INDIA ALWAYS CONSIDERED PRICE AS A BARRIER
In India people do not give much importance to functionality and they never ask for it. For example a telescopic slide is priced at, say X, and the other at 2X, but no one will ask why it so? In our business we focus on longevity and its uses. 90% of dealers are just selling without knowing the functionality of the product. Functional hardware is not A-B-C-D, it contains lot of intricate parts together. A good product is not defined by just weight but by technology.
The consumer demand pattern will not change. But the manufacturers have to upgrade themselves to offer customize wardrobes and kitchens to them and let them demand to specific requirement. If carpenter do not upgrade their skills, they will be at backward position. They will have to develop skills. Secondly, there are lots of differences working of dealers and OEMs so there is difference in their price offerings. The dealers see the profit on product and sell everything even in single quantity, while OEMs uses in bulk and add value to it, that’s why there is profit difference between them and it is important for them as well.
FUNCTIONALITY OF HARDWARE
For the use of functionality, Indian homes do not offer much more potential as these are clean as it was before, also we are washing our hands frequently these days as before it was culturally developed. Although, we are also offering electronic locks and door solutions which are touch free and managed by app. It is also available for furniture. But, these are going to stay as luxury, as at the residential place these are not much required.
The functionality which is touch free at present is much in talk, but it is the usability and affordability play a vital role. If it’s required anyway, we will need to spend additional cost. In terms of imported products there is doubt that the price will drop, because there are lot of hiccups in CFS (Container Fright Station) Navsari. So, keeping price at the level point is more like to be there.
Two years ago all these activities of smart furniture started in India and now the hardware for it is at good demand. As it is not more costly today, for example functional hardware for a bed cost nearly Rs 50,000 (the cost vary with OEMs as they do bulk buying) and people are using it where ever they have space saving required at homes and offices.
So, a suggestion for dealers is to think that who will be supporting for you, this is the time to think and analyze for the suitability for them. The companies are also thinking for the same. This will show who has capability to walk further and run for marathon. There are lot of companies who are lean and technology driven and catering the niche market as well as mass market. So, at this point of time everyone will have to analyze where they want to go.
CONCLUSION
MARKET IS GOING TO SLOG FOR NEXT FIVE TO SIX MONTHS AND WE CAN HOPE RECOVERY IN EVEN LONGER TIME. THERE IS A NEED OF CHANGE IN A WAY WE SELL, SO WE HAVE TO AWARE AND PROMOTE QUALITY, FUNCTIONALITY. A DEALER WILL HAVE TO BOOST THEIR KNOWLEDGE, ONLY WEIGHING OR PRICE POINT WILL NOT BE MUCH BENEFICIAL, IN FACT IT WILL HARM TO THE BUSINESS AS WELL AS DOING JUSTICE TO CUSTOMERS. THE PRICE WILL NOT INCREASE, BUT ALSO NOT DECREASE, BECAUSE THERE ARE LOTS OF HICCUPS IN LOGISTICS, MATERIAL AVAILABILITY FROM ACROSS THE GLOBE. THERE IS AN INTENSE NEED OF FUNCTIONAL HARDWARE FOR HOUSES AND PEOPLE ARE GOING TO CHANGE OR CONVERT THEIR FURNITURE IN DIFFERENT FORMS. IT CAN BE DINING TABLE CONVERTED INTO STUDY TABLE OR A BED TO A TABLE AND MANY MORE, BECAUSE INDIA IS LOOKING FORWARD TO BE VERY MUCH FUNCTIONAL POST COVID. INDIA IS GOING TO BE A MANUFACTURING HUB, BUT IT HAS TO EVOLVE A LOT MORE ADOPTING THE CHANGE.