Godrej Enterprises Group (GEG), which includes the unlisted Godrej & Boyce and its affiliates, has rebranded its furniture brand Interio as part of its plan to more than double turnover from ₹4,000 crore at present to ₹10,000 crore in the next three years. The refreshed Interio logo was unveiled on Tuesday. GEG executive director Nyrika Holkar spoke with Viveat Susan Pinto about her priorities for the furniture business and the group. Edited excerpts:
How does the latest Interio brand refresh align with the broader rebranding exercise undertaken by the group last year?
The furniture business is an important constituent of our consumer cluster, which includes appliances, security, and locks. The rebranding last year was at a group level, aimed at creating a cohesive and consistent identity across our various businesses. The latest brand refresh (for the furniture business) builds on that. We are looking to position the (furniture) business as a one-stop destination for modern Indian living. To that end, it reflects a more premium offering that we had envisaged for our consumer businesses.
You have lined up ₹300 crore of investment in the furniture business over the next two to three years. Given your goal of more than doubling turnover, is that enough?
It would be difficult to say beyond the three-year term what more would be needed in terms of investment. One has to look at the life of the investment, because significant investments have been made on the back-end. From a capacity perspective, we have not utilized full capacity. So there’s an ability to expand that. From a consumer and retail perspective, for the next three years, revamping existing stores plus adding new footprint should put us in a good position to have a wide offline presence.
Where do you see GEG five years from now? Will the revenue split between consumer and industrial businesses change in the future as your ambitions grow?
Almost 60% of our group turnover comes from the consumer cluster and around 40% from the engineering and industrial vertical. However, industrial businesses—like aerospace, process equipment, warehousing—are growing faster, propelled by government incentives and diversification away from China. We also see opportunities in aerospace R&D, warehousing, and recycled concrete in infrastructure. India has huge potential there. So the 60:40 revenue split may probably change to 50:50 in the future. Also, on the consumer side, there is enormous potential to deepen rather than widen our presence. That again could open up new avenues of growth as we go deeper into our existing consumer categories.
What is your retail strategy for the furniture business?
We are at 1,000 stores now. We are looking to take the overall number to 1,500 stores in three years. The expansion will be undertaken largely in tier 2 markets as we seek to tap more consumers. We are also introducing a new store format designed to help consumers to browse, ideate and bring their personal style to life. These will be our flagship experience centres (around 20,000 sq ft in size), which along with our mid-sized stores (around 7,500 sq ft) and studios (small-format stores) should help us improve offline reach. Our e-commerce experience meanwhile has been revamped to reach over 18,000 pin codes. This doesn’t mean that we need to add more, we could go deeper into those pin codes. So the investments we’ve made will give returns. Beyond three years, we can’t say today. But given the opportunity, given that the market is largely unorganized, the shift from unorganised to organised should be significant. The furniture business is growing at 17-18% per annum, the investments we are making and the shift from unorganised and organised should help take growth levels to about 25% per annum in the future.
Would a GST cut have helped the furniture sector, given it remains in the 18% tax bracket?
A reduction in GST would certainly have benefitted middle-class and semi-organised buyers. While other sectors have seen cuts, furniture has not been included. That said, any tax relief would ease pressure, especially in urban areas, by improving disposable incomes. Whether this alone can drive growth is debatable. We also need complementary steps—such as regional trade agreements and competitive advantages—to accelerate sector growth.