Ajita Shashidhar

To get its brand noticed in the largely commoditised home furnishings market, Welspun is investing in retail stores and expanding capacity to cater to the domestic market.

HOW does one create brand consciousness in consumers' minds for home furnishings, a category which is highly commoditised and where brands don't matter much to the consumer? This is the biggest challenge facing Welspun India, a leading terry towel export company, which entered the organised retail market a few years ago with its home furnishing brand, Spaces.

The company, which made its retail foray through multibrand stores, is now looking at standalone stores across the country. Anshuman Singh, Chief Executive Officer, Welspun India, feels that the only way to create brand consciousness is through retail presence.

"We want to become the number one home textile company by the end of this year, but apart from this, we have a larger mission on hand — and that is to get the category to evolve," he says.

Apart from its own brand Spaces, the company recently acquired the marketing rights of Tommy Hilfiger home furnishing products. "While Spaces caters to the mid-segment, Tommy Hilfiger is for the premium market," he says. Apart from the two brands, the company is also targeting discount seekers through its factory outlets which will sell both Spaces and Tommy Hilfiger products along with the company's export surpluses.

Arvind Singhal, Chairman of retail consultancy KSA-Technopak, says, "To create brand awareness, home furnishing companies have to lay more emphasis on the overall shopping experience. Retail ambience, coordinated product ranges; in-store display; point-of-purchase promotional literature on the product features as well as the company's lineage and superior in-store service are some of the initial steps that home furnishing companies must take. Of course, this has to be done in conjunction with innovative product and brand advertising and some innovative promotions."

Brand-Building

As the segment is largely commoditised, the primary focus of the company, says Singh, would be to get the category to constantly evolve, which can only be done through customer education. It is also trying to create excitement in the segment bringing fashion into home textiles. "We are going to launch a new collection each season and educate the customers about co-ordinating their bed sheets with their curtains and so on," says Singh.

However, Singhal of KSA feels that it is a little too early to come out with new collections each season. "While it could help in creating fashion consciousness in India about home furnishings, as long as the designs, colours and prints are contemporary, and the packaging and labelling are as per the highest quality standards, home furnishing companies need not worry about creating more complexity in their business by making too frequent changes in their product offer at this stage."

"Of course, over the next few years, with more competition and a more evolved consumer, it would be necessary to come out with at least two major collections per year," he adds.

Welspun also plans to educate customers about issues such as hygiene. "Most of us are comfortable with changing our bed sheets once in two weeks. Similarly, most families use only one towel between themselves. None of us have ever realised that if the same towel is used by the entire family, each member of the family is prone to infection," remarks Singh. All these issues will be tackled through various media and below-the-line activities, for which the company has earmarked nearly Rs 10 crore. It is currently scouting for an agency to handle its communication activities.

Retail strategy

As for the company's retail strategy, which is going to be the core of its brand-building exercise, the next three years are going to see as many as 125 stores across the country at an investment of Rs 50 crore. Of the 125, 100 would be standalone Spaces stores. "Spread over an area of approximately 2,000 sq ft, the Spaces showrooms would offer furnishings for each room of the house," says Singh. Apart from furnishing items, the showrooms will also offer home décor products such as candles, curios and so on.

On the other hand, the Tommy Hilfiger collection will use the shop-in-shop format. Singh says that as the products are premium, the company is initially trying out the shop-in-shop format, before investing in standalone stores. The products will be available at the Arvind flagship stores, which also have the marketing rights to sell Tommy Hilfiger casual wear in India. "We plan to set up at least 12 Tommy shop-in-shops in the next four months," says Singh. The company rolled out the first Welspun factory outlet in Chandigarh recently and plans to set up 25 such outlets in the next six months.

While Singhal of KSA agrees with the company's strategy of using a mix of retail channels, he also suggests the use of catalogues as a retail medium, as they can reach out to smaller towns.

The market

The Indian home furnishings market, according to Singh, is around Rs 15,000 crore, of which the organised market is just Rs 1,000 crore. Bombay Dyeing was the only prominent player in this market, before the entry of brands such as Spaces and Portico about two to three years ago.

Though brand consciousness in this segment is low, Rajiv Merchant, CEO (Domestic Business Division), Creative Mobus Fabrics (which has a has a licensing arrangement with Portico to manufacture and market its sheets in India), feels that the scenario is changing. "A few years ago consumers never emphasised on buying branded home furnishing products. But that is not the case today. A lot of consumers go in for branded furnishings as they feel that it signifies quality."

However, a Mumbai-based analyst says, "For most consumers branding means that the product will be priced higher. Therefore, for a brand to sell, it will have to tread the middle path — work on pricing and raise volumes. Unless the market is created, volumes are unlikely to grow."

"But 10 years from now branded home textiles would be a huge market in India with companies such as Alok Industries, Welspun and the Creative group shoring up capacities," he adds.

To be able to cater adequately to the domestic market, Welspun recently set up its second plant at Anjar in Gujarat at a cost of Rs 600 crore. Singh hopes to achieve a turnover of Rs 1,000 crore from the existing Rs 450 crore in a year's time. The aspiration is that Welspun should become the leading home textile company in the next one year; the challenge ahead is to evolve the consumer's mind. "Once we do this volumes will automatically come about," he says.

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