Exporters dealing in home luxury foresee a bright future despite global slowdown
For the forecast period of 2015-2020, the global home décor market registered a CAGR of 4.2% and is expected to reap in US $ 664 billion by 2020. A large chunk of this market is attributed to the luxury market, wherein brands like Ralph Lauren, Armani/CASA, Nina Campbell, The Future Perfect, Zoffany are leading the bandwagon with their innovations in fabrics and designs, marketing techniques and steady growth in past few years.
Though the US and EU markets are going through an all-time slow, the luxury segment, which accounts for 9.6% of the home décor market remains largely unaffected. Indian exporters in this segment are mostly connected with the valueadded luxury or high-end market, with a smaller portion dedicated to basics. According to trade data of past two years, the export of cushion covers from India has seen a growth of 6.67%, likewise carpets and rugs export have seen a growth of 9.05% and quilts and other bedding items have grown by 5.38%. The beds and linen segment currently dominates this market and accounts for around 33% of the total market revenue.
The global market demands a wide range of handwork, 3-dimensional embroideries and newness in surface and fabric textures when they look at Indian exporters. Innovation in fabric textures, hand embroideries on luxury items such as pillows, towels, duvets, rugs and quilts are what exporters constantly work at. Chandrika Thatai, Co-founder of Fashion Accessories, Gurgaon shares, “We are seeing growth in the global luxury market for unique and luxurious home décor, though there’s a dip in usual FOBs in past years that also depends on customer-to-customer.” The company, offering duvets, quilts, comforters, slipcovers, decorative cushions, drapes, scarves, throws, table linen, kitchen linen as well as Christmas products, has many prestigious clients like Zara Home, The White Company, Williams Sonama and many more.
Most global players are keeping the inventory line rather small due to the slowdown. And for Indian exporters, there is a stiff competition with neighbouring countries like China, Pakistan and Bangladesh, so exporters are increasingly capitalising on the country’s core strengths like cotton, embroidered handwork by local artisans, prints and other local techniques to stay relevant.
Another major player in the segment, Sarita Handa Exports, Gurgaon also stresses on the importance of Indian techniques. “The products from China are more machined, while Pakistan appears to have
gained popularity with prints. India is capitalising on the handwork of the artisans into most things for added value,” says Sarita Handa, Owner whose label translate the art of Indian needlework into global style inspiration for their customers and pioneers in hand embroidered linen and textile. The company boasts its signature embroidery and textile as innovation has led it from being an export house to a luxury retail brand. It also sells to major retailers around the world like Pottery Barn, Macys, Ethan Allen and Bloomingdales to name a few.
On the positive side, value-added innovative products are always in demand; and according to most of the manufacturers, the profit for buyers’ lies in being ahead of the rest of the market so that the only thing they are looking for is unique products. The innovations that manufacturers are taking into account are fabric, techniques and designs. In fabrics, not only cotton, which has been an age-old offering but also a mix of cashmere-cotton, bamboo cotton, silk with cashmere, linen with cashmere are being offered to the buyers. For cushion category, they look for woven, velvet fabric as well as value additions like the pom pom, frills, trims and more. “The buyers in luxury segment are looking for newness, more Indian techniques, handwork and craft which they cannot find in China,” says Rakshit Poddar, Owner, Cheer Sagar Exports, Jaipur, which has expertise in embroidery and embellished products. He further adds, “The overall market conditions affect us, so we cannot depend on one market. We have different markets so that if one market slows down we have other options to keep the factory running.” No doubt, searching out new markets for luxury products is also helping exporters to grow.
“The conditions are not perfect in international market right now and we grew only 7-8% last year, lower than the expected 15%. However, we are growing in different segments in new markets like Australia, Middle East, New Zealand, and South Africa. I am hopeful that in the next 2-3 quarters, there would be a drastic demand from the international market, as retail is picking up,” says SM Dwivedi, CEO, Sara Textiles, Noida. The company is a leading exporter of towels and boasts its value-added products in different washes, prints and dyeing.
The US and EU markets behave differently; so, while Europe is looking for better designs, cheaper products and exotic fabric, US is more into cleaner look with focus on quality and durability. The different tastes and buying behaviour of these markets also affect the forecast, trends and the overall business due to which the exporters have to rely on their gut feeling to get an upper hand. “When I speak to buyers, there are many situations where I can sense that there could be a slowdown in a product or category, and innovation to entice them to place an order which is the only answer to these things,” says Aman Dhingra, Vice President of Gurgaon-based Orient Craft that has 80% of total home furnishing exports in the high-end segment. He further adds, “For innovation, we are looking at a lot of fabric engineering – blending the fibres, spinning them together so that product is cotton but with an exotic twist to it.”
With a growing global trend of ecofriendly furnishing, sustainability is getting more important for international buyers. Nowadays buyers look out for organic, biodegradable material. On the other hand, manufacturers believe that sustainability is not just about the fabric but craft as well, in the buyer’s eye. Ravindra Nath, Director, Ocean Home Store, Jaipur, which supplies beddings and cushions to home furnishing giants like, Anthropologies and Ralph Lauren, emphasises on sustainability. “Sustainability is very important for our buyers. They watch the entire supply chain; where and how the product is produced, insist on using of dyes and chemicals that are less harmful to the environment. They are very transparent at every stage of production and very helpful too. They provide us with their own directions and we give them sustainable valueadded products,” he says.
Many exporters are of the opinion that Government policies and taxation are giving their business a hard time, but those are issues that will only be resolved with time. Kiran Panchal, Director of Bombay-based Amber Homes, which is accredited by Walmart for its home textile and finishing and makes a dedicated effort to apply green concepts, aptly concludes: “The slowing down of China’s situation and with the growing import in EU and US, as well as the new emerging markets, points at a brighter future for the luxury segment. In coming times, the global market is going to be much wider for the luxury home furnishing players and competition will be less for those who abide by their innovation and sustainability.”
SM Dwivedi, CEO, Sara Textiles
Sarita Handa, Owner, Sarita Handa Exports
Display at Cheer Sagar Exports