TAMIL NADU

Furniture solutions providers come up with new business strategies realty check

Aloysius Xavier Lopez

CHENNAI: As competition among furniture solutions providers is increasing, many of them catering to the middle income group households have been forced to offer discounts to sustain their business.

“The challenges faced by the real estate sector in the past few months have affected us too. An announcement of a discount of 30 per cent has generated hundreds of enquiries in three days,” says A.Muthuselvam, director of Fusion Furniture Solutions, which provides solutions for all kinds of residential and commercial interior works.

“Clients are more concerned about the cost of furnishing their new house. Middle class clients want modular kitchen and bedroom interiors solutions in the range of Rs.1.5 lakh to Rs.2 lakh,” he added.

As furniture solutions for new houses also depend on the loans extended by banks, stringent norms adopted by the bank for the loan disbursements have been one of the factors affecting our business, says Mr. Muthuselvam.

“Players like us provide furniture solutions in the price range of Rs.40,000 to Rs.8 lakh,” says K.B.K. Prabhu of New Designs, another firm involved in interior designing. “We are trying to devise methods to reduce the price in this market condition,” he adds.

Price can be reduced by the use of materials available in the country instead of importing and by innovative design, says Arjun Babu of Rainbow Decors.

Furniture solutions providers say it is possible to reduce the cost of furniture solutions substantially by intelligent design and selection of affordable material. However, it would involve some compromise on the quality of the materials.

“Many small players without technical expertise in furniture solutions and financial capability have vanished from the business scene in the past few months,” says Mr.Prabhu.

There were layoffs and other austerity measures by some furniture solutions providers affected by the slowdown in the realty sector. Ajay Babu, one of the former employees of Spacio Designs, says he resigned his job to start his own venture Shubam Designers. He is optimistic about the market sentiments improving in the coming months as he feels a stable Central government and its economic interventions may slowly revive the real estate activity in a few months.

“Last year there were 1,600 enquiries for complete furniture solutions. However many clients showed reluctance because they thought prices were not affordable,” says Mr.Arjun. This year enquiries have dipped to 200, he says. This summer we have a reduction of more than 50 per cent in the number of customers, says Mr.Muthuselvam.

Big players in the city have also been affected, but the services they provide are high-end and more diversified. The in-house projects of their parent companies in the realty segment were sustaining them, he says.

However, smaller players who depend more on modular kitchen solutions for the middle class are struggling for their survival, says Mr.Muthuselvam.

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