Built to last

How does a German home fittings brand survive and even thrive in a market dominated by the unorganised sector? With a great deal of patience and flexibility, says Andreas Hettich, MD and fourth-generation scion of Hettich Holding. The modular furniture industry in India is worth Rs 5,000 crore and coasting along at 15-20%. But in the past five years, the worst of the slowdown, the $1.2-billion company has been charging ahead at 29% CAGR in India. Hettich explains his eponymous company’s strategy for growth in the country.

Take your time: We entered India in 2000 through a joint venture with Adventz of the Saroj Poddar group. While we were always certain about local manufacturing, we first had to build up the market and set up our network. So, plans for our first plant in India started only two or three years ago. It is now ready at Vadodara, Gujarat, at a cost of Rs 100 crore, with over 60,000 sq ft of constructed area. The first commercial dispatch has kicked off, and we expect about Rs 120-crore turnover from this plant over the next few years. Now, instead of setting up more plants in India, we will focus on expanding capacity at Vadodara. 

Experience is key: Simply printing out the image of a hinge won’t explain its usage. Nor will claiming we are backed by German technology impress consumers much. So, we have six application centres in India, where customers can touch and feel our products. Interacting with thousands of customers also gives us the actual experience and understanding of the market. 

Work around potential problems: Yes, India has a large, unorganised furniture market and yes, the actual facilitators are small furniture shops and independent carpenters, not big name brands. What we do is partner with these small, independent carpenters and train them in the use of our products. This helps in familiarising them with our product range. And this is not just a simple CSR activity; we spend on their training because their preference for our products is necessary for our survival. Also, most modular furniture companies in India currently use Hettich products for their setups, thereby promoting our range. 

Maintain import-export balance: The wire baskets being produced at Vadodara sell well in India but aren’t that popular in Germany. But other Asian markets show similar preferences. So, our new plant will make items not just for India but other Asian markets as well, even as we continue importing products such as hinges and door runners for India. At present, we are using only a third of the Vadodara capacity; we plan to expand that, set up production for more categories and start exporting in a year or two.