JSW Living, a part of the business conglomerate JSW that has ventured into the steel furniture business is eyeing a revenue of Rs 250 crore over the next two years, said Tarini Jindal Handa, Managing Director, JSW Living.
In an interview to Moneycontrol, Handa said, “We are going to be EBITDA positive by the end of this year (FY20) and the second year we will be profitable. We will reinvest the profit into our business since we are asset light.”
The investment in the furniture brand called Forma will be approximately Rs 250 crore over the next five years.
Initially, the company plans to launch the steel furniture in southern India and will tap the rest of the country next year.
The company’s products which start from Rs 19,000 are available at 62 outlets.
The furniture market in India is estimated to be Rs 1.32 lakh crore and is growing at a compounded annual growth rate of 11 percent over the last five years.
She said the organised sector accounts for about 16 percent of the entire furniture market and is extremely fragmented with over 50 key players.
The company also plans to come up with a buyback program in future for recycling and reuse of products.
Q: What motivated you to enter the furniture segment?
A: Usage of colour is very important to me. India as a nation has been very colourful. We are a vibrant country and I feel our homes are losing vibrancy. We are only buying the plastic, the beige, wood colour, the black, white, the grey. As a nation, we like bright colours and that was a huge motivation for me to do the furniture business and to inject colour.
Q: What is the size of the market currently in India and what is the extent of the market you would be capturing over the next two years?
A: The growth rate of the market is at 11 percent annually and it’s a huge market with an organised segment of only 16 percent. On capturing the market, I would not be able to give you the correct statistics. So far, we just want to enter and see. The market is enormous. We are looking forward to our journey.
Q: Since you have an asset- light model you have got two manufacturers on board to manufacture the furniture. Will you be setting up your own manufacturing unit or continue with contract manufacturers?
A: As long as we can, we want to be asset light and we would like to use the existing capacity of India. We will be investing in R&D, in newer processes but we would not like to manufacture initially. In future, if we feel we will start our own manufacturing unit.
Q: Since this is a consumer-facing business, can you tell us how many retail touch points will you be having and how many cities will you be venturing in to?
A: Today, we are already present in 62 outlets across Maharashtra, Karnataka and Telangana. We plan to enter Kerala, Tamilnadu, and Southern part of India in the next few months.
Q: What is your distribution strategy?
A: We work on a distribution network where we contact distributors who have their own retail network. By 2023 we plan to open our own retail stores, experience centres.
Q: Would you be looking at the online space for selling the furniture?
A: We are already available online.
Q: There is a lot of competition in this space. What is your strategy to beat the competition?
A: More the competition the better for us. It will only make us work harder and bring more innovative designs. The advantage that we have at JSW is that we are manufacturing within India where we are producing our own steel and we are going and spending time with our consumers and we are understanding their wants their needs, their desires. We are open to collaborations, we want to bring good designs.
Q: What are your revenue projections for this business?
A: We are going to be EBITDA positive by the end of this year (FY20) and the second year we will be profitable. We will reinvest the profit into our business since we are asset light. Also, because we will need money for R&D. Our expected revenue will be Rs 250 crore over the next two years.