PTI: April 04, 2019
Mumbai: JSW Living, part of the JSW Group has forayed into the steel furniture segment with brand Forma, is eyeing a revenue of Rs 200 crore in next two years and Rs 1,000 crore by FY25.
The group said it will be pumping in approximately Rs 250 crore in five years in Forma.
Currently we are looking at residential furniture and in the future we would look at office furniture space, the new entitys managing director Tarini Jindal Handa told reporters here.
The company aims to be EBITDA positive in the first year, she said.
The furniture market is estimated to be Rs 1,32,000 crore of which the organised market is 16 percent.
We are targeting revenue of Rs 200 crore in the next two years in this business and then grow from there and challenge Godrej in the steel furniture business, JSW Living director Parth Jindal said, while noting that Godrej does a business of around Rs 800-900 crore in steel furniture segment.
Jindal hoped the share of the organised segment increased to 30 percent by 2022 and 40 percent by 2025.
He added that it will be an asset light model as the company will be procuring steel from JSW Steel and the vendors would be converting into furniture.
The real investment is in product development, R&D, and just in distribution. Everything else is an asset light model. It is actually converting steel into furniture, without putting up our manufacturing facilities to start with, he said.
He pointed out that the per capita consumption of steel is very low in India at 68 kg per person while the global average is 200 kg per person and China is at 440 kg per person.
The furniture market is growing at a compound annual growth rate of more than 11 percent in the past five years.
Targeting the mid-market segment, the company is launching 30 SKUs and would increase it 10 fold in next five years.
JSW Living will focus initially on the home furniture segment, which accounts for almost 65 percent of the total furniture sales in the country.
It is targeting the top 100 cities in the first five years to reach 400 outlets. In 2023 it will look at having exclusive stores.
Todays millennial and Gen Z consumer needs have changed and how they live in new digital economy is evolving by the minute. These rapid changes bring in enormous opportunities and new dynamic that will shape consumer choices in India over the next decade in a unique way, Handa said.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.