Revolutionizing Indian Furniture Retail: A Veteran’s Perspective

FDT Bureau

30-year industry stalwart, Dr. Mahesh M, who is also the CEO of Creaticity, speaks to Pragat Dvivedi, Co-Founder, FURNITURE DESIGN & TECHNOLOGY (FDT) on the evolution and future of organized furniture markets in India.
 

WHERE DID YOU START YOUR STUDIES, AND HOW DID YOU END UP SPENDING 30 YEARS IN THE FURNITURE INDUSTRY?
I am from Chennai, so my mother tongue is Tamil. I did my engineering at the University of Madras, my master’s in management from BITS Pilani, and 3-4 years ago, I completed my PhD on Omnichannel Retail with a focus on home and furniture retail. 

WAS THIS DOCTORATE A HOBBY OR A NECESSITY?
Neither. Having a degree in omni-channel retail brings satisfaction on two fronts: the work we are doing and the achievements | we are making. For me, it was about giving form and structure to my experience and knowledge for the next generation. A Guru told me that structuring your thoughts is essential. An MBA provides width, and a doctorate provides depth. The doctorate wasn’t a hobby or a necessity but a way to give back to my community and industry in a structured manner.

WHEN IT COMES TO THE NUMBER GAME IN THE FURNITURE INDUSTRY, WHAT ARE YOUR THOUGHTS?
In any category, we have two markets: one is organized, the other is unorganized. Organized means billing is consistent and transparent. From that perspective, I would pick the furniture industry. In this, I include home furniture, upholstered furniture, beds, dining, kitchen—everything. Office furniture may be a different category altogether. According to me, the value of the organized market is somewhere around 15,000 crores INR, including upholstery. Though, today’s actual output or size is roughly about 5,000 to 6,000 crores INR, there is an organized market potential of 15,000 crores INR. And why do I believe so, well it’s because of the semi-organized players. There are many semi-organized players. Also referred to as ‘one-store wonders’, they have beautiful stores, good manufacturing, or good support, and they manage it professionally. But because of market needs, they end up not being fully organized. Fully organized means billing is consistent, regardless of sun, rain, bad months, or good months. Semi-organized players adjust as per comfort and market suitability. When these semi-organized players move into the organized sector, according to me, the market could be around 15,000 to 20,000 crores INR, which is huge.



AS FAR AS I KNOW, YOU HAVE WORKED WITH VARIOUS FURNITURE BRANDS OVER THE PAST 30 YEARS, HOW HAVE THOSE BRANDS PERFORMED TILL NOW?
There are two types of answers to this question. One answer is, today in India, even though as I mentioned a market of 15,000 crores to 20,000 crores INR exists, there are few companies worth over 1,000 crores INR on one hand. Secondly it’s still difficult for many to reach the 1,000 crore INR mark. So, to answer your question, has there been remarkable growth for companies? I wish it could have been more. No, not as much as I’d hoped. But has there been growth? Yes, there has been. The second way of answering is that all these companies have only helped to take the organized market to 15%. Consolidation happened very quickly in other industries, but it is not happening in the furniture industry. Even today, it remains a fragmented industry.

HOW LONG WILL THE INDUSTRY REMAIN FRAGMENTED? HOW LONG DO WE HAVE TO WAIT TO WITNESS A BIG TURNOVER?
According to me, at least another 30 years, ten to fifteen years ago, we were thinking about a company worth 100 crores INR. Now we are talking about companies worth 1000 crores INR. These companies may become 2500 or 5000 crore INR companies. There are many companies today with valuations of a billion dollars, but these valuations need to become actual, real turnovers. It can happen, but it will take around 30 years for this industry to become more organized. For me, 30-40% organization is enough because India is still 70% semi-urban and rural, where full organization isn’t feasible.

"THE BIGGEST CHALLENGE FOR MSMES (MICRO, SMALL, MEDIUM ENTERPRISES) IS ACCESS TO CAPITAL. FORMAL MEANS OF ACCESS TO CAPITAL ARE LIMITED, THOUGH IT’S SLOWLY IMPROVING."

WHAT DO YOU THINK ABOUT ORGANIZED FURNITURE? WHAT ARE THEY MISSING?
I think the fault lies more with the consuming community rather than the producing or retailing community. Indian customers have not been brand-conscious or concerned about organized versus unorganized in this category.

IS THERE ANY BRAND THAT IS REALLY BUILDING A BRAND OR SPREADING AWARENESS?
Many brands, both international and Indian, are trying. IKEA, Ashley from the US, and Natuzzi from Italy are making efforts. In office furniture, Herman Miller and Haworth have done a lot. Indian companies like LiveSpace, Homelane, Design Cafe, Home Center, At Home, and Hometown are also contributing. From where I come, Creaticity in Pune, we aggregate ideas and collections and take them to the customer. Many companies are working hard to promote organized buying and educate customers about what goes below the surface, not just the looks. Many companies are focusing on this. Even though our audience here isn’t the end consumer, increased awareness will lead them to ask for products like Hettich - a prime example. Hettich, Blum, Hafele - these brands have made such an impact that small kitchen manufacturers now demand Hettich hardware. Achieving this required immense effort, tailored in an Indian context. It’s not merely about hardware or smooth slides; they’ve added functionality, ease, and emotion. Their success is due to well-planned campaigns by large companies. That’s why these brands are renowned today. The same attention is needed for components, surfaces, laminates, and plywood.

WHAT ABOUT THE COMPANIES? HOW MANY COMPANIES IN INDIA ARE ABOVE 100 CRORES INR IN THE FURNITURE CATEGORY?
Frankly, you can count them on your fingertips. I think we have no more than 40-50 companies above 100 crores INR.

DON’T YOU THINK THAT THE LINES BETWEEN MANUFACTURERS AND RETAILERS ARE BLURRING?
Yes, it’s a fantastic development. Retailers are doing backward integration to start manufacturing, and manufacturers are doing forward integration to start retailing. This convergence is beautiful. As this situation improves gradually, you will no longer differentiate between manufacturers and retailers. It is needed in this category because when the same entity handles production and sales, the quality improves. Salespeople need to understand what goes into the product - fabric, foam, frame, hardware - so they can convey the value to customers. This understanding will increase customer appreciation and trust.

WHAT ABOUT THE COMPANIES THOSE ARE SMALL? THEY STRUGGLE TO GROW, MANY WIND UP AND LEAVE. WHAT HAVE YOU SEEN IN THE LAST 10-15 YEARS?
The biggest challenge for MSMEs (micro, small, medium enterprises) is access to capital. Formal means of access to capital are limited, though it’s slowly improving. Recently, I heard that more companies are coming into financing MSMEs, which is encouraging. Apart from capital small companies often struggle because of generational shifts in mindset and risk-taking. It’s easy to say “take risks” from a comfortable position, but it’s not that simple for them. Mindsets will change with better access to capital and markets. Many small companies are currently digitally reluctant but need to become digitally enthusiastic. Governments are working to ease the process for MSMEs and ensure timely payments. It’s not just about finance but also about marketing. A small YouTube video showcasing their skills and commitment can attract larger companies looking for local suppliers.

"DESIGNERS PRIORITIZE DELIVERING QUALITY AND MEETING CLIENT EXPECTATIONS. THEY SEEK RELIABILITY IN TERMS OF DESIGN EXECUTION AND PRODUCT SOURCING, OFTEN PREFERRING TO WORK WITH TRUSTED PARTNERS"

WHAT ABOUT MID-SIZED PLAYERS WHO INVEST 2-3 CRORES INR IN MACHINERY AND BUILDING A BRAND? SOME OF THEM FEEL STUCK.
It’s often about risk-taking. They don’t want to take risks because they’re unsure of the outcome. I can give examples, like FurnitureKraft in Mumbai, which evolved into Urban Living. They took calculated risks, scaled their operations, and are now participating in global exhibitions. Another example is Spacewood, which grew by taking measured risks.

Many mid-sized companies don’t take risks because they are uncertain about the outcome. If they believe in their scale and opportunities, whether through direct retailing or franchising, they can grow. It’s no longer just about the product but about the process. The process includes pre-sales, in-sales, and post-sales operations. For a furniture company, it’s about defining how to attract, engage,
convert, and retain customers. Operations processes cover the entire chain from order placement to completion. These processes must be tailored to the market, company size, and business scale. Many companies falter because they don’t have the right processes in place.

Setting up is the easiest part - finding a good place, designing the store, and hiring staff. The challenge is running the store consistently. Managing retail, whether dealer stores or EBOs everyday is boring and requires a solid process, it’s about pre-sales to attract customers, in-sales to engage and convert them and post-sales to retain them. Operations processes need to be specific to the business size and market. Companies often falter by not having these processes well-defined.

DO YOU BELIEVE THAT INDIAN MANUFACTURERS, ESPECIALLY IN THE MICRO AND MIDDLE SECTORS, ARE PRODUCING THE RIGHT QUALITY THAT CONSUMERS NEED, OR ARE THEY PORTRAYING SOMETHING ELSE?
It boils down to the price-value equation. I would rate most Indian manufacturers in the micro, small, and medium enterprises around 6 out of 10 in terms of meeting the price-value expectations of consumers. They have potential to reach 8 or 9 with improvements. There’s scope to do better and faster, but increasing consumer awareness is key to achieving this.
 

HOW WOULD YOU RATE ITALIAN FURNITURE IN COMPARISON, CONSIDERING THEIR INDUSTRY’S EVOLUTION AND ORGANIZATION?
Countries like Italy, France, and Germany have highly evolved furniture industries, they are proud of their processes and heritage. Many of the family owned businesses are 80 to 90 years old, this is not an easy feat to achieve which signifies that they have sustained over a longer time period. The furniture industry is largely organized in these countries. They consistently deliver around 8 or 9 on the price-quality scale. The gap between them and Indian manufacturers is narrow - around two or three points. In India, most operations are in the middle tier, not at the bottom. In the Indian context, most of the players operate predominantly in the top three to four percent. The majority of the market lies in the middle segment - not at the bottom, which tends to be dominated by unorganized sectors. Therefore, focusing our discussion on organized or semi-organized sectors, there is considerable potential in the middle segment of the market.largely organized in these countries.
They consistently deliver around 8 or 9 on the price-quality scale. The gap between them and Indian manufacturers is narrow - around two or three points. In India, most operations are in the middle tier, not at the bottom. In the Indian context, most of the players operate predominantly in the top three to four percent. The majority of the market lies in the middle segment - not at the bottom, which tends to be dominated by unorganized sectors. Therefore, focusing our discussion on organized or semi-organized sectors, there is considerable potential in the middle segment of the market.



YOU MENTIONED CUSTOMIZATION AND HIGH-VALUE FURNITURE BECOMING TRENDS. IS THERE SPACE FOR EVERYONE IN THIS MARKET SHIFT?
Absolutely, it’s becoming a necessity driven by market forces. Customers now demand customization and personalized solutions. Every home should reflect uniqueness, which is a growing trend globally and particularly in India. It’s about moving towards a segment-of-one approach where each customer’s needs are individually addressed.

WHEN WE TALK ABOUT PERSONALIZATION, WHY AREN’T THE NUMBERS VISIBLE IN THE BOOKS? IS THIS GOOD FOR THE INDUSTRY?
First of all, there is no syndication of data in this category. Many other categories, like automobiles, have syndicated data because they have been given industry status. However, we have not yet been accorded industry status, so the data isn’t maintained in the same way.

SHOULD EVERY MANUFACTURER GET INTO CUSTOMIZATION AND DIVERSIFICATION? LIKEWISE WHAT ARE THE BENEFITS OF STANDARDIZATION?
No, not every manufacturer should diversify into all areas. Specialization is key. For example, someone specializing in water purifiers shouldn’t necessarily also make hobs and chimneys just because they’re in the same kitchen. Standardization can greatly benefit the industry. Knowing the average living room dimensions in cities like Delhi or Bangalore allows for creating standards for panels, heights, widths, etc. This can form a separate category, and companies focusing on a complete design-to-build solution are leading this effort, providing full solutions to customers.



CREATICITY MALL STANDS AS PUNE’S LARGEST AND PREMIER FURNITURE MALL, NUMEROUS BRANDS HAVE OPENED THEIR DISPLAY STORES IN THE MALL, IS THE SPACE MEETING EXPECTATIONS?
India is still relatively new to the concept of dedicated furniture display and exhibition centers compared to Asian markets like China or Thailand, where such markets have been established for some time. At Creative City Mall, where we’ve been for 17 years now, we’re seeing steady growth, currently operating at over 90% occupancy with a diverse range of international, national, and regional furniture and home decor brands.

However, it’s been a journey. Initially, there was resistance from brands to be part of such specialized centers, often confused with conventional malls. Over time, customer awareness has grown, understanding these centers offer variety depth, and a focused buying experience compared to scattered clusters.



ARE INDIAN DESIGNERS RECEPTIVE TO THESE SPECIALIZED DISPLAY CENTERS?
Designers prioritize delivering quality and meeting client expectations. They seek reliability in terms of design execution and product sourcing, often preferring to work with trusted partners where they have more control over quality. There’s potential for greater collaboration between designers/ architects and brands/manufacturers to bridge this gap, fostering confidence and enhancing the industry’s growth, similar to sectors like tiles or sanitary ware where top brands have thrived through strategic retail presence.

HOW MUCH PHYSICAL SPACE DO YOU THINK MANUFACTURERS SHOULD ALLOCATE TO ATTRACT ARCHITECTS AND DESIGNERS FROM VARIOUS LOCATIONS TO SHOWCASE THEIR VARIETY?
Many new factories are already earmarking space for display centers, recognizing the need to showcase their range to architects and designers. While factory visits offer insights into manufacturing processes, dedicated display centers accessible in urban areas remain crucial. Depending on the city size and market potential, manufacturers should consider creating studio spaces where architects can experience the product variety and design options firsthand.

"WHILE THERE’S A GROWING TREND TOWARDS DESIGNER LED FURNITURE IN INDIA, THE CONCEPT OF ESTABLISHED DESIGNER BRANDS, AKIN TO FASHION LABELS, IS STILL DEVELOPING.​​​​​​​"

WHAT ARE YOUR THOUGHTS ON THE CURRENT STATE OF SALES PITCH IN FURNITURE RETAIL? IS THERE A GAP?
The term “sales pitch” itself needs refinement. It should be seen as a technical sales pitch, focusing not just on selling beauty but also on form and function together. Training in this aspect is crucial. Many companies, especially larger ones, have learning and development teams to enhance knowledge and competence among sales teams. Research emphasizes that customers seek both product knowledge and sales competence for higher conversion rates.

HOW IMPORTANT IS IT FOR SALESPERSONS TO UNDERSTAND THE SPECIFIC NEEDS OF THE FURNITURE SECTOR AND TO EFFECTIVELY COMMUNICATE FORM AND FUNCTIONALITY TO CUSTOMERS?
It’s paramount. Successful sales hinge on a salesperson’s ability to grasp customer needs and translate product knowledge into tailored solutions. This understanding bridges the gap between what the customer wants and what the manufacturer offers. Approximately 10-20% of companies, primarily in the organized sector, effectively train their sales teams to achieve this alignment.

HOW DO YOU VIEW THE EMERGENCE OF DESIGNER LED FURNITURE IN INDIA? ARE WE PROGRESSING TOWARDS ESTABLISHING RECOGNIZED DESIGNER BRANDS IN FURNITURE?
While there’s a growing trend towards designer-led furniture in India, the concept of established designer brands, akin to fashion labels, is still developing. We are beginning to see designers labeling products, but significant momentum requires broader awareness and market acceptance. This segment has potential, provided awareness within the organized market accelerates to align with global standards.

HOW SHOULD MANUFACTURERS AND BRANDS APPROACH THE DIVERSITY OF CONSUMER PREFERENCES ACROSS DIFFERENT REGIONS IN INDIA?
India’s consumer base is diverse, with varying preferences across regions. Manufacturers should aim for standardized products with localized adaptations, such as colors or designs that resonate with specific regional tastes. This approach allows for customization while maintaining product integrity and appeal across different markets.

WHAT ARE YOUR PLANS FOR EXPANDING YOUR PRESENCE BEYOND PUNE? WHICH CITIES DO YOU SEE AS POTENTIAL GROWTH MARKETS FOR YOUR CREATIVE CENTERS?
Initially, our focus is on rest of Maharashtra, we are keen on targeting areas like Nasik and Kolhapur due to their cultural affinity with Pune. Moving forward, Navi Mumbai and Thane are logical next steps, given their proximity and accessibility via expressways. Future expansions will likely integrate technological advancements like AR, VR, and 3D visualization to enhance customer engagement and optimize space utilization. Furniture centre size may come down to 30,000 sq.ft but with the advancements in tech we will be in a position to exhibit much more.

WHAT’S YOUR PERSPECTIVE ON THE GROWING TREND OF SETTING UP FURNITURE PARKS BY MANY STATE GOVERNMENTS?
Government is indeed taking proactive steps to establish furniture clusters, providing a conducive environment for both manufacturing and retailing. The key now lies in manufacturers and companies recognizing the value of being part of these clusters. Beyond the incentives like tax holidays, what’s crucial is whether these clusters can foster an ecosystem that supports access to raw materials and encourages collaboration among manufacturers and component suppliers. This ecosystem development will be pivotal in determining the operational success and longevity of these clusters.



"INDIA’S CONSUMER BASE IS DIVERSE, WITH VARYING PREFERENCES ACROSS REGIONS. MANUFACTURERS SHOULD AIM FOR STANDARDIZED PRODUCTS WITH LOCALIZED ADAPTATIONS,."

LOOKING AT THE OVERALL JOURNEY AND LANDSCAPE OF THE FURNITURE INDUSTRY IN INDIA, WHAT WOULD YOU HIGHLIGHT AS THE CRITICAL ELEMENTS FOR ITS GROWTH?
The furniture and home interior industry in India presents an exciting landscape with immense market size and opportunities. To realize its full potential, there needs to be a cohesive integration among manufacturers, retailers, component players, architects, and designers. Each stakeholder group brings unique strengths to the table, and leveraging these synergies while enhancing customer awareness about the benefits of organized markets will be crucial. This concerted effort, supported by adequate capital infusion and enterprise across the industry, can catalyze significant growth over the next 10 to 20 years. Thus the organized furniture market in India has the potential for exponential growth if all stakeholders collaborate effectively and consistently. By aligning strengths, enhancing customer education, and fostering a supportive business environment, we can propel the industry forward into a new era of success.​​​​​​​