In "Spotlight" we will be discussing the opportunities and challenges that our clients face in various sectors, in conversation with CXOs. This week, we speak to the MD of Blum India Private Ltd., Mr. Martin Herr. Blum is an Austrian company and a global leader in the high-tech furniture fittings industry. Present in over 120 countries already, Blum has ramped up its India operations recently. We caught up with Mr. Martin Herr to discuss the journey of setting up a presence in India and the unique drivers of the Indian retail experience.
Blum has been present in India for the last 15 years or so – how has the Indian market treated you? What's on the cards for the future?
In fact, we had our first shipment to India in 1984 but started regular business with a distributor in the late nineties. An important step for us was the start of the collaboration with Häfele India in 2003. We're happy to continue working with distributors, but we will also be expanding our own team to be even closer to our customers. We are seeing the benefit of being present in an emerging market like India with a much higher growth rate than in most other markets, and we expect this to continue. Trends in urbanization, increasing buying power, and the fact that nowadays consumers do a lot of online research before buying is very helpful to a company like ours. Direct interface with our customers now helps us understand what the market is looking for and how to shape our strategy to keep succeeding. The size and potential of the Indian market is just too big to sit idle or be passive.
How is the furniture fittings industry in India likely to change in the coming decade?
The professionalization of the furniture fittings industry has already started and the share of the unorganized sector is decreasing year by year. IKEA's entry into India will also play an important role in this transition. But we need to be realistic: India will remain a trade-dominated market for many years. As of now in the furniture fittings industry, manufacturers are still quite small in terms of volumes, compared to more established markets like Italy, Germany or China to name just a few.
Do you see global design trends impacting Indian tastes? Does the Indian market have its own, unique trends and demands?
From my experience, Indian designers do like to study and modify international trends. In our globalized world, new ideas spread fast. Having said that, we are constantly monitoring the market to get a feel for local requirements first-hand, so that we can adapt the product portfolio to the changing needs.
What is Blum's strategy to succeed in the Indian market? Did you bring out any India-specific products and how do you differentiate yourself from peers in the furniture fittings industry?
When we introduced soft-closing drawers in India many years ago, the initial feedback was that the market would not be mature enough for that. Surprisingly, in no time this feature became standard in India. We want to be trendsetters in the industry and we are working hard to avoid standstills. For example, our Tip-On Blumotion technology, a mechanical opening support combined with our adaptive soft-closing, supports the trend for handle-free furniture. The strategy to keep gaining market share in a country like India is to keep innovating, offer a large portfolio of products and provide good service to customers.
Why invest in a retail showroom when product sales through distributors and their showrooms are growing rapidly anyway? Is the new center meant to serve primarily as a market development platform or also double up as a sales center?
With our rapid growth in India, we felt we needed to take the next step and invest in this market. Servicing our partners has always been a key element for our success globally. For that we need an effective local team, which of course needs commensurate infrastructure. Our new flagship showroom located in Andheri at the western express highway is meant to be easily reachable for our partners as well as for our customers. We've used the 4,000 sq.ft. to provide an experiential retail environment for end users, furniture manufacturers, dealers, architects and interior designers who can see our entire product range. We see the flagship showroom as an experience center, and sales will keep taking place through our distributor and partners.
What percentage of turnover does Blum keep aside for R&D? Apart from R&D on product development, is there also any consumer-centric research that is being done?
Innovation is the life insurance for our future. Approximately 4% of our turnover is invested in R&D. This has two parts to it – requirement research and product development. It's extremely important to do our homework right, before jumping in to start product development. One concept we follow is called "global customer benefit": everyone who comes in contact with our products need to see a clear benefit – be it the consumer, the installer, the manufacturer or the dealer. Only then a new product will become successful. We invite consumers to test new products, we film them, we analyze the footage and figure out what can be improved.
We've also been performing kitchen surveys in private households all over the world to understand consumer requirements. Yet another tool we use is our "Age Explorer" suit: it's a suit one wears, which simulates higher age by restricting movement, impairing eyesight and hearing: we use it to test new products and find out how convenient they really are. I'm proud we do have an "Age Explorer" suit at our Mumbai showroom, so our Indian customers can also get the experience and test out products and applications.
In view of trend towards experiential retail, how should hardware channel partners be presenting their products and concepts to customers in order to increase sales and build customer loyalty?
Everyone loves to experience innovative furniture. But what was great for customers 5 years ago, might not meet their expectations today: to be successful, our channel partners need to keep creating a 'wow' effect. Hardware may be just one part, but it's an essential part of furniture. It can enable the realization of new designs and help creating that 'wow' factor, which ultimately is required to stand out from the crowd.
To read more on this topic from Asit Mehta & Associates, please click here.
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