The home decor and furnishing segment has long been dominated by traditional retailers. However, its growth potential has been luring a number of modern retailers, including Renovation Factory, a new entrant, into the segment. In an exclusive interaction with IndiaRetailing, Rahul Vadera, MD, Renovation Factory, talks about their expectations and growth plans.
What is the market size of the home decor and furnishing category in India? What is the USP of Renovation Factory?
The home decor and furnishing segment is dominated by traditional retailers; modern retail in this segment hardly constitutes 10 per cent of the total market. However, there is huge growth potential in the segment.
What differentiates us from other modern retailers is the width of our products – we cover most of the categories of home furnishing. We have all kinds of products, from soft furnishing and ceramics to furniture.
Our main competitors are Oma and Good Earth, but we hope to beat them on the basis of the width of our products and pricing. We cater to everyone – from a teenager to a 70-year-old customer; our average price range is Rs.3,000-7,000.
Was opening a home furnishing store on high-street a part of your strategy?
Yes, because high streets have maximum brand visibility. And what we know from our competition, the best place to be is Khan Market – the 26th best selling high-street in the world, according to some media reports.
Is the store at Khan Market your own property or rented?
The property at Khan Market is leased.
How much investment was made into the store? Was it all internal accrual?
It is all internal, it’s private funds, and for Phase I, it will be all internal. In the next two years, we plan to spend Rs.10 crore on our next 7-8 stores.
Why did you choose Delhi to open your maiden store? What are your expansion plans?
We are based out of Delhi, and it is the number one metro in terms of spending power. We want to open another store in Delhi. It will come up somewhere near Vasant Kunj, in one of the malls. Delhi has room for 3-4 stores, but right now we are testing the waters with one store.
We would like to open a store in Mumbai by January next year, and in the next two years, we want to open 10 stores. After Delhi and Mumbai, we will open stores in Hyderabad, Pune and Chennai. We will go to tier II cities in our second phase of expansion, but for the initial 2-3 years, we will expand only in metros.
What are your views on the revenue-sharing model on high-streets?
Well, for a new brand like ours, getting a revenue-sharing deal on high-streets is not possible. But in malls we are looking at this model.
How do you plan to market the brand?
Word of mouth publicity plays a very important role for a brand like ours; even before we opened Renovation Factory, people knew about it because they could see the store as soon as they entered Khan Market. Apart from PR activities, we are looking at BTL (below the line) advertising. Loud advertising is not required for a brand like this.