Talk about coincidence Hitesh. (or maybe just recency effect).Last two weeks I was in process of buying new office furniture. (Finalised Wednesday, will be delivered today
After going through the painful process of evaluating options, costs in both readymade/tailor-made, here are my findings from street:
a) It’s a very fragmented mkt with painful decisions to take at each step by untrained customer (me).
b) Unlinke paints (Asian), plumbing (Ashirwad/Astral), electrical (Polycab/Legrande/Roma) - where the last-mile contractor undertaking the job sells on the brand of the material he’ll use, I found almost all carpenter’s describe the material in generic terms - the three most common types being particle board(cheapest), commercial or marine ply(costliest). Few talk about real wood. I did not get a single carpenter who said he’ll use Greenply (or XYZ brand) ply. Hell, most carpenter’s don’t even specify the thickness of the ply they will use. They just say “accha mazboot cheez bana denge same to same jaise catalog mein hai” - but can’t define mazbooti in cms it seems. LOL. At some point in the quotation process, either you trust the guy because he came via prevs reference (not the case for me), trust blindly or give up. I gave up. Even in generic terms, what I also found was most carpenter’s themselves didn’t know difference between particle board, MDF and their various applications. All these guys only describe in terms of costs. So I think other than advtg/branding which Greenply has, like Astral they need to create a demand pull from carpenter’s side by conducting training/workshops to spread awarenesss abt MDF.
None of these guys even mentioned using $anyBrand MDF. Until now even I wasn’t aware that MDF was manufactured locally and Greenply had monopoly in it. So there’s certainly some branding work to be done to disassociate the ply exclusivity from Greenply name.
c) On readymade front: I visited atleast 3-4 big showrooms in Navi Mumbai (Vashi), all next to each other, and most of them keep imported Chinese/Malaysian MDF furnitures. Many of them don’t even know whether it’s Chinese or Malaysian. For them it’s just ‘imported’. For a simple 3-unit desk set I was looking at the price range was a wide 20K-28K range for similar setup +/- a few minor things. Almost all these MDF units had excellent fittings/finishing, which no local carpenter can match that’s for sure. Even a Durian showroom kept imported MDF desks. Similar job with local carpenter but with ply would have cost me around 20K-24K with no guarantee of finishing of final product.
I finally decided to go with readymade MDF deskset from a mid-range shop for 16K, exact same piece available in fancy showrooms for 25K. So it’s clear the market supports a lot of pricing leeway, and some of the high-street shops are marking up more than 100% margins.
d) I also noticed in almost all small/mid-range furniture shops that Nilkamal is aggressively entering this segment - They now even have their own modular range, and have built a good brand with all shopkeepers talking highly of it and in some cases displayed next to imported MDF range with killing margins. I’ve also seen their products occupying more and more shelfspace in local D-Mart. Quick look at screener tells me that it’s a healthy biz at mcap 350 crores, but what’s killing them is debt servicing. On EBIDTA of 150 crs, NP in their hands is only 50 crs. Anyone has a view on this?
Sorry to jut in with my thoughts sprayed all over. Just that the topic was so relevant and immediate for me. (This is called scuttlebutt right?