From enhancing home security to controlling lights, fans and electronics from miles away, smart homes came a long way in 2019.
By Tanuj Choudhry
The home decor and interiors industry in India has never been hotter! From being the sole preserve of the rich, interior design has made rapid inroads into the booming urban Indian middle class over the last 5 years. This has also coincided with the share of organized retail in this space doubling from 5% to 10% in the same period. For a $20BN market with an 8% CAGR, this is significant. However, these are still early days. We have much to do, and a lot to grow!
A glimpse at 2019
Whether it was furniture (sofas, tables, beds etc), furnishings (drapes, bed linen, carpets & rugs etc.) or complete home interiors (modular kitchens, wardrobes; storage units, wallpaper and painting, home automation etc.), the category grew rapidly this year. Almost all the action was in the organized retail space.
More searches, more trust: Consumers searching for home interiors and related keywords online, has increased considerably this year. Subcategories like modular kitchens grew even faster, indicating increasing trust in the online discovery of more evolved products with higher ticket sizes. We also saw searches from Tier-II cities go up significantly.
Click and mortar all the way: 2019 saw more and more brands bolster their online experience with offline experience centres, for more personalized customer experience. Knowing enough about a customer even before she walks into the store is no longer sci-fi, it’s mainstream! This growth was not just restricted to players in the home décor segment, with fast fashion, auto and food brands adding to the frantic retail leasing scene.
New-age incumbents doubling-down: New-age brands who had been around for a few years and had successfully achieved the right product-market fit, spent 2019 penetrating new segments and new cities much faster than traditional retail. The competition was fierce amongst these brands, especially the venture-backed ones. However, the real competition for almost all brands was with the previous versions of themselves – becoming more customer-centric, hitting bigger scale or becoming more profitable.
Space-saving furniture: Given the space crunch in our concrete jungle, space-saving furniture was the hit trend of 2019. This gave homeowners with smaller spaces the ability to do away with the limitations of space and build beautiful interiors. Beds that fold up into the wall to become chalkboards for kids, study tables that disappear to make way for board games on the floor and sofa-beds that are actually comfortable as a sofa and a bed were winners!
Smart Homes: From enhancing home security to controlling lights, fans and electronics from miles away, smart homes came a long way in 2019. Many brands leveraged Alexa and Google Home to match the expectations of the tech-savvy homeowners. Prices of devices dropped as well, making it more affordable for the mass market.
Looking ahead into 2020
Innovative new niche players will emerge: Across the home interiors category, new technology-first brands will emerge, focusing on areas like painting, wallpaper, space-saving furniture, home automation, mattresses and lighting. They will bring expertise and raise the bar for traditional retail. They will also continue to strengthen the offerings of full home interiors by powering up new verticals.
Customers will ask for more: Competition will increase, demand for good service and not just a good product will grow, and prices will drop. Customers will compare more, and expect more value for money from organized retail. However, price comparisons with the unorganized sector will not
The fittest will survive: Brands, especially those looking to serve the mass market, will need to look inward and get lean. Cost of acquisition, cost of goods sold and cost of servicing customers well will become daily parlance for management teams if they aren’t already. Organizing a $20BN market of which only 10% is organized needs players who can stay fit through the journey.
Products will get more ‘Indian’: From a design standpoint, brands focusing on making products more ‘Indian’ will be in the limelight. For example, the erstwhile ‘Italian’ modular kitchens need to be re-thought to cater to our uniquely Indian needs. Similarly, stowing away wet-grinders effortlessly; having easier access to our 15-20 masala containers while cooking; or new core materials for cabinets that can survive more heat and moisture without cracking, need solutions tailored for India. Innovation will pick up in 2020.
Virtual Reality: No prediction in the world of interior design is complete without a mention of VR! The industry has not made significant movement in this space, to enhance customer experience beyond the vanity of a 3D walk-through. Brands in the segment need to continue to take some serious steps to harness the power of VR to make visualising interiors more contextual and fun for the designers and the clients.
Expect something special in 2020!
(Mr Tanuj Choudhry is the Chief Business Officer & Board Member at HomeLane. Views expressed are the author’s own.)