An Interview with Mr. K. Prasad, Manager of the Chennai showroom for U.S. based Sauder brand of furniture.

Chennai has now seen a mushrooming of furniture retailers. One can get all kinds of furniture. The present trend in the market is the demand for readymade furniture. In the readymade furniture range, customers want style, elegance, finish and utility, at a reasonable price. Anything from wardrobes to cots, entertainment centres to computer tables are available across a range of prices and varieties.

Why, people prefer readymade furniture is because of the fact that having one's furniture made by the local carpenter is time consuming and also one has no guarantee of after-sales service. Only about 10% of the public still have their furniture made by local carpenters. Also, there are not as many skilled carpenters as 10 - 15 years ago. And no matter how skilled the carpenter is, he cannot equal the finish that readymade or imported furniture can give.

Yes, the advantage is there. But I feel that it is the only advantage. For example, this has happened quite a few times.... A customer comes and sees an entertainment centre and wants it in, say, a cherry classic finish, which is not in the catalogue itself. I cannot customize for just one customer. So the customer goes ahead and orders an entertainment centre to be made as desired by him say in the same design but a different colour or dimension. The carpenter will either ask to be paid in terms of rate per square feet or one can buy the material and give it to the carpenter and pay just for the labour alone. If the rate is decided in terms of square feet, then the carpenter will get the cheapest screws or attachments in order to make profit. If the material is supplied and only labour charge is to be given to him, then he will delay the work and take as long as possible.

The need for furniture is growing with the real estate market also coming out of its slump in '97 and '98. With the perking up of the real estate market and the disbursement of housing loans on the rise, the need for quality furniture is also increasing. With employees getting increased salaries and perks, people want to go in more for quality with style.

The average salary nowadays for a middle management executive being around Rs. 25,000, the person wants to spend more on furnishing his home. Also with more and more offices coming up, the need for quality office furniture is also increasing. So the demand is growing and the market is getting to be more and more competitive, which means that the furniture manufacturer cannot afford to go down on his quality and lose his market share.

Speaking of strength, the major strength of this market is its growth and the possibilities of expansion. The market is growing bigger and bigger. Though this may mean less market share for the players in the market, this makes the customer the king. From a sellers market, today it is definitely a buyers market.

The weakness for the furniture market in Chennai or for that matter India itself, is that if modular or contemporary furniture were to be produced in India, it would find no takers in the local market or abroad. People prefer imported furniture to locally made furniture.

How is the market at present?

The market, which is already quite big, is only growing with the entry of one major player at least once every two months. Also the conservative attitude of the people has dropped in the sense that people are prepared to pay a little more for the quality and finish offered by branded imported furniture. Also the people's awareness of brands or their brand consciousness is slowly increasing.

The major threat to the furniture market is from Malaysian furniture, which has flooded the market. Malaysian furniture manufacturers are able to lessen production costs based on their economy and also because they cater to a large international market, which justifies their huge investments in infrastructure and advanced technology. Thus they are able to offer goods at a lesser price because of the economies of scale.

How do you see the future of the furniture market in Chennai?

More players are certainly going to enter the market. We are right now importing furniture from Malaysia, Italy and other Scandinavian countries. China has still not entered the market and if it enters, it can cause a real dent in the market of the existing imported furniture dealers. But anyway the market is quite big and seems to be growing. The future looks bright.

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