The first half of 2017 has gone by and Indian home furnishing industry is giving mixed response about the business so far. To bring out the real picture, Apparel Online met several exporters across the country. As usual, few exporters expressed happiness about their business in 2017 while for some, it was not as per their expectations. Many other exporters are using various marketing/production tools to survive and for some, the best option is to add those products in the list which they were not doing earlier. There are still few who don’t see any option but rather prefer to wait and watch. Negative or positive, GST has had its own impact on home furnishing exporters in bits and pieces.
The companies working with top buyers and following systems are facing less impact of the tough market conditions and one of them isMahajan Overseas, Panipat. The company has good orders and is positive about further bookings too. “So far 2017 has been good for us and we have orders and bookings to meet our expectations. We will see a growth from last year even though times are tough.” Pranab Mahajan, Director of the company briefed that the company is looking at all aspects of costing, wastages and being extra careful with each step that it is taking.
“The year 2017 has been positive for us in terms of order booking but only after getting into the competition by reducing our margins heavily, to grab some major orders,” shared Setul Agrawal, Soft Options. He further added that on a personal level, he has less expectation from the textile industry in terms of growth as they have not seen any rise in the number of customers in the last 4 years. In his words, “It has been a very competitive market and the better service and price you give, the more business you can snatch from your competitors. The only thing to follow today in order to grow is to be as cost-effective as possible.” Noida-based Soft Options is SA 8000 and IS0 9001:2000 certified company and has experience of working with Bed Bath and Beyond, Laura Ashley and many more prestigious clients.
Akhilesh Kumar Pandey, CEO, Trishulin Overseas, Noida, feels that the year is ‘progressive’ as it is better than the last year. His core markets include chain stores of USA and Middle East, and these regions are doing fairly well compared to any other markets, specially Europe. “We are focusing a lot on product development like from last few months, macramé is more in demand and we have good orders in this style,” stated an optimistic Akhilesh. Using plenty of handwork, the company is an expert and is known for string curtains as it is doing this product from last 15 years. Now it is further adding more range of home products like bed sheets, bath-mates, duvet covers etc. “I am hopeful about the growing market, so more products in our product basket will be helpful in fetching more orders,” he opined based on his current observations.
In fact, adding new product categories seems to be the survival trend for exporters now. “We are adding ottoman matching to our products so that we can sell a complete story and buyers need not go anywhere for these products too,” said Ashish Sharma, Proprietor, V.I. Tradelinks, Delhi. The company started in 2008, is mainly working with Europe and faces challenges of less orders this year. Moving further, it is going to have more value-added products, and more blends as Ashish sees higher demand in value additions. He explains, “We were doing 100 per cent linen mainly but now within linen, we are also experimenting on alternate weaves, blends etc.”
Most of the exporters failed to specify any interesting developments that took place in 2017. Rather a sad Setul asserted, “There is nothing that can be referred to as interesting in the home furnishing business but definitely there are a lot of unexpected things happening like some of my customers have gone bankrupt. Major retailers in Europe are losing interest and reducing their buying capacity for home textiles, which is not a very good sign for home textiles market.”
There is no as such new challenge that needs a reference here but existing challenges are becoming harder like many exporters feel that price reduction is on all-time high. They are facing key price challenges from buyers. Also, products are moving to basics rather than fashion, so margin is squeezing more. A chunk of industry shared that there were enough enquiries in initial months like February but orders received are comparatively less.
GST impact on home furnishing industry
Despite some confusion and initial hard hiccups, many home furnishing exporters see GST as a positive move which will bring everyone on the same platform. To some extent, GST’s impact depends on exporters’ individual situation also. This can be seen in the case of some exporters who don’t see blockage of working capital as a big hurdle while for some, it is a big problem.
Pranab speaks in favour of GST saying, “In the previous tax regime, we were all on a different platform, but in this at least input cost etc., will be the same.” Few exporters disagree on his statement as they believe that in terms of the export scenario of home furnishing industry, GST has not been advantageous, rather it has only increased the difficulties of a home textile exporter with more number of formalities adding to their cost and also hiking the working capital. Some exporters like V.I. Tradelinks faced issues with logistic companies. Mohit Gupta, Sun International, Agra also has a very negative experience to share about GST as he briefs, “We are basically into handwork based products, and handworkers working for us from homes don’t even have bank accounts. How can they have GST certification and fulfil all allied formalities? In spite of this, we tried to motivate them but they refused to work. Let us know if anyone has a solution for the same.” He further added that blockage of working capital, tax on items which were earlier tax-free are also challenges for medium-level exporters like him. The company is exporting bed covers, table covers and cushions for Middle East, Gulf, Latin America and some European countries.“Despite this, if we get return on whatever GST we have paid, it increases costs and our buyers have already shifted to China and Vietnam where they are getting similar things on machines which we are doing by hand. We are forced to follow wait and watch policy. Impact of GST and its understanding will be cleared only by the end of the current fiscal,” he concluded on a not-so-happy note.