New Delhi [India], March 5 : The home decor industry, already struggling with sluggish demand, is expected to face continued stagnation for another year, according to a report by Nuvama, a financial services company.
The report added that the usual strategy of home decor companies to offer discounts may not be sufficient to revive sales due to the elevated inventory levels in the market.
The report highlights that the manufacturers based out of Morbi have been dumping stocks in the local market due to slower-than-expected exports. Exports have been slower in the face of anti-dumping duties (ADD) in some countries and partially due to higher freight rates, the report highlighted.
The report also highlighted an increase in competition in the project sales with larger brands aggressively bidding to enhance their capacity utilization. The report added this competitive push has resulted in price reductions, putting pressure on margins and extending the credit cycle to 60-90 days.
Meanwhile, industry leaders are struggling to retain their market share, prompting the introduction of new brands. The report says however such a move comes with risks, as lower-end offerings could potentially eat into the sales of the company's premium products. It however adds that while the tile segment has faced challenges, bath-ware remains relatively unaffected.
On the price gap front, the report added that the gap between branded and non-branded products has widened significantly, now standing at 20-25 per cent compared to 12-13 per cent a year ago. This growing differential could impact consumer preferences and market dynamics in the coming months, the report added.
Among premium brands Jaguar has maintained its lead in the sector, benefitting from a favourable distribution model that focuses on product rotation rather than bulk stocking at dealer levels. Simpolo, another key player, has been gaining traction among consumers aged 23-32, leveraging product innovation and digital marketingan area where legacy brands have struggled to keep pace.
The major players in the home decor category Pepperfry, Urban Ladder, Chumbak, Fabindia, Godrej Interio, Home Artisan, HomeLane, ZZ Architects, and Creazione Interiors.
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