BANGALORE, India —The Indian furnishings fabrics distribution model has changed   from solely through independent distributors to direct mill sales to retailers.   

The exclusive B2B model through independent distributors existed for a few decades but it had many negatives; the one positive factor was that the distributor was prompt in payment.  However,  feedback   in terms of trends, customer likes and dislikes was difficult to obtain through the sole distributor model. This hampered production planning by the mills and was always dependent on distributors’ limited feedback. In 2008, international markets dwindled and the time was appropriate to try the new distribution model and expand business in the domestic market. The challenge to most of the mills was their ability to keep weaving and shipping out the fabrics by healthy capacity utilization.

The need to aggressively alter and adopt a new distribution was a compelling choice.  There was a need to expand distribution to more retailers. Chirag and Amit Mehta Distributors were making sample book  collections as though it was their property even though it was a mix of many mill  samples that were branded loosely.

D’Decor wrote a new model in the history marketing of furnishings fabrics in India. D’Decor formed its own company to distribute to retailers as well to promote its brand to consumers. It lined up a brand ambassador to endorse its collections in the form of top Bollywood star Shah Rukh Khan and Gauri, his wife. D’Decor wanted to be sure the stocking of the upholstery and curtain fabrics from retailers had consumer  brand awareness at the retailing level. The awareness of the brand D’Decor through various media provided an expanding reach to retailers as well as to the consumer. According to reliable sources, D’Decor has grown its sales by 250 percent and continues to grow. Many industry observers feel that D’Decor  is now the most established market leader in the domestic market.

However, other leading manufacturers like Dicitex Furnishings chose to stick to the earlier model of independent distributors but tried to further expand the  network for deeper penetration into expanding markets. “We had four distributors in 2009 but subsequently expanded to 10. The  results are highly encouraging and business has grown multifold ”, said Rajneesh Arora, Vice-Chairman, Dicitex Furnishings (Pvt) Ltd Mumbai. “Adding more distributors has assisted to reach the markets better, weave more fabrics and meanwhile inventories have also increased.  We have better feedback region wise and we are able to plan new designs based on demand pattern that we receive from the distributors as well as our sales staff who closely follow the changing trends in the marketplace”, he said. Dicitex Furnishings holds sales conference two times a year inviting all Indian retailers and distributors to see the latest line.  “We used to cater to over 125 plus retailers with four distributors but now we have 550 retailers attended by 10 distributors,” he added.    The challenges are plenty to the retailer including the art of proper display with severe space constraints. Real estate prices have sky rocketed, hampering retail display space  at retail. Space availability will never be enough for any mills to show their range in India. However, the departure from selling rolls to cut length to sample books instead of draping fabrics has assisted the retailers in conserving the shelf space.

“The distribution dynamics have changed since 2008 and the situation is highly competitive,” said Chirag Mehta and Amit Mehta, partners ( cousins) at K.C. Fabrics, Mumbai. “We took a few days to ship the goods 10 years ago, but now we ship out on the same day for even orders that are received till 5 PM”, said Chirag Mehta and Amit Mehta, brothers at K.C. Fabrics, Mumbai. The family owned business began in 1931 in textiles distribution; then added furnishing fabrics of G.M. Fabrics, Mumbai. K.C. Fabrics began in three states and now distributes to all India. They are not alone & have three other competitive distributors, which also includes their principals. K.C. Fabrics has increased its sales consistently during the last four years up to 20 percent a year. “To keep ahead in a marketplace that is extremely competitive, good innovative collections and the ability to procure increased shelf space for our sample books can only drive our business further and new strategies are being worked out and will be unveiled very soon”, added the two Mehta cousins.  

Recently, the government has approved a plan to implement 51 percent  FDI (Foreign Direct Investment) in multi-brand retailing. Currently the retail structure is coming out from its almost nebulous stage and has a chance  to mature faster. “The decision would encourage organized retailing, which in turn would result in more centralized procurement operations, improved supply chain management and reduced involvement of middlemen between producers and retailers,” Chairman S V Arumugam, has said. According to industry estimates, during the next five years, the home furnishing market in India is expected to grow at eight to 12% by value to reach $6 Billion.