The Indian Retail Market is growing at a CAGR of 12% in India with organized retail surging ahead at a CAGR of 32% (PwC report “Building retail businesses for tomorrow today”). This data also shows that 92% of Indians still prefer shopping offline owing to retail’s four “T”s: touch, trial, takeaway and trust. This has compelled retailers to strive to better the experience delivered in their store environments. The impact of this has been that many organized and traditional retailers are reimagining their existing store concepts to new ones. One of the key elements addressed in these projects have been the store presentation which has increased the demand for customized fixtures.
VM&RD took a close look at the current trends, by connecting with 26 of the top retail fixture suppliers in India. We find that they are ready to cater to the estimated addition of about 15+ Million Sft of retail space annually.
THE TOP 5 TRENDS IN THE FIXTURE INDUSTRY FROM THE CONVERSATIONS ARE AS FOLLOWS:
Entry of many new players, start-ups and those diversifying from other related services in the arena is creating fierce competition Democratization of customized fixtures and the like-to-like price drop of 10-15% in the cost of supply.
Focus on improvement in R&D and manufacturing processes to match global finish and form needs
Increase in exports and international partnerships for technology imports
Integration of retail experience elements like lighting, digital signage and technology into store fixtures
SOME OF INTERESTING QUANTITATIVE HIGHLIGHTS OF THE FINDINGS ARE AS FOLLOWS:
31% of the 26 companies are less than 10 years old and 35% are over 20 years old.
The average size of facility has reduced from 66,000 sq ft to about 63,000 sft in the last 2 years. However, the number of players with over 100,000 sft has increased considerably. Also, the number of smaller players has also increased substantially.
The average turnover, in the last 2 years, has decreased by about 19% from INR 23 Cr to INR 19 Cr owing to fall in prices and spread of the pie over more players.
The average manning strength of the industry has reduced from 140 per factory to 103, a reduction of 23%! This is a probably a reflection of the adoption of more efficient manufacturing.
Though the percentage of exports has not increased in the last 2 years, the number of companies that export has increased from 39% to almost 50%.
The average area fitted out by each company has doubled in the last 2 years, from 3.25 Lac sft to about 5.9 Lac Sq Ft per supplier.
Overall, from the suppliers’ perspective it’s faster growth with more opportunities, higher revenues and higher efficiencies of operations (in terms of human, machine and space resource). From the customers’ perspective its better benchmarks of quality, better price, more choices for customization and more professional service. So we can confidently conclude that, amidst the very challenging competition, it’s a sure win-win for both the Buyer and the Seller.