Mebelkart, an online furniture player has forayed in the B2C ultra-luxury segment and will be selling products from STROT, a South Delhi based lifestyle boutique of its partner, the Continental Group. Rahul Agarwal, Co founder and CEO, Mebelkart briefed Realty Plus about the concept of luxury and luxury lifestyle.
What defines luxury interiors today?
Let me break the stereotypical definition first. Luxury interiors are not about incurring a lot of money on expensive furniture products or for that matter hiring a designer for an exorbitant amount of money and getting the interiors done.I personally feel that luxury interiors are more about a stunning aesthetic which expresses your individuality.At Mebelkart, we want to associate luxury with an experience and not with a cost. Our recent tie-up with STROT, a lifestyle boutique of the Delhi-based Continental Group is an effort in that direction where we will provide luxury furniture products at best prices.
The reasons for growing luxury furniture market
The luxury market by itself is huge in India and as per a recent report by ASSOCHAM is expected to cross $18.3 billion by 2016 which would be a steep hike from the $14.7 billion as recorded in 2015.Furniture as a category is also seeing a rise in demand for luxury furniture products. This growth is primarily because of the fact that in recent years India’s middle class has grown exponentially. EY (formerly, Ernst & Young) estimates that the middle class population in India is expected to reach 475 million by 2030 and will be adding more people than China to the global middle class just 12 years from 2015.
Is there a gap between demand and supply in terms of luxury interiors products?
There definitely exists a huge gap in the demand and supply of luxury interior products. There are a handful of brands catering to the burgeoning demand emanating from all corners of the country, be it for home or office luxury interiors.India Brand Equity Foundation (IBEF) estimates that the Indian real estate market will touch $180 billion by 2020. As per IBEF, India’s office space absorption stood at 35 million square feet during 2015, which is the second highest figure in the India’s history after 2011. These huge demands will in turn result in increased demand for the luxury interior products.
It is not just about high-end customers anymore. Even the rising middle class in India is now showing interest in custom designed furniture/furnishing or products by globally renowned designers. The demand varies with customers, depending on their tastes. We have seen a mixed demand for custom designed furniture as well as furniture especially designed by the international designers.
The challenge and potential of on-line selling of luxury products
Not just luxury products alone but the online furniture category per se is fraught with many challenges, the most important being enabling a mindset change for customers. Furniture selling in India has traditionally been driven through local carpenters and small furniture manufacturers/retailers. Customers still want to indulge in that ‘look and feel’ experience before investing their money in a luxury furniture product. We are trying to change that through the seamless customer experience. The fact that furniture is a heavy goods category presents its own challenges especially around timely deliveries and logistics. At Mebelkart, we have managed to circumvent this issue by going hyper local and tying up with local sellers to service the shopping orders from customers within their vicinity.This has helped us reduce in-transit damages and improve our service efficiency through a faster delivery process.
The growth potential of luxury interiors market
I am pretty confident that the luxury interiors market will grow in the next five years.While there is no credible data to share on the kind of growth the Indian luxury interiors or furniture market has witnessed in recent times, globally the market has been growing. The global luxury furniture market is expected to grow at a CAGR of 4% during 2015-2019, as per Technavio, a global market research company. As per Technavio, the growth in developing countries like China and India has been robust in comparison to what was seen in the developed countries.