Home Centre continues to play a key role in helping organise the fragmented and unorganised furniture and furnishings market in India. Here’s a look at what it brings to the table
For Mumbai-based Architect Anuja Pradhan of AJ Interiors, there is only one destination to source from when she wants to accessorise the homes she’s designing—Home Centre. “Their biggest USP is their colour palettes—they are trendy and available in a wide range of home products, which helps in colour coordination. It’s my go-to place to bring a negative or dull space to life,” said Pradhan, who has been sourcing from the home improvement chain since it launched in India in 2005.
One of the early entrants in the organised branded furniture and furnishings space, Home Centre was a saving grace for professionals and customers alike as it catered to all home décor needs (such as furniture and homeware) under one roof. “Back then, over 90% of the segment was fragmented and unorganised and we had to run from pillar to post, sourcing from 10 different places,” Pradhan explained, adding that Home Centre changed this.
Change Agent
When Dubai-based Landmark Group brought the format to India, it was already a hit in the Middle East where it was launched in 1995. But in India, it had a different competitive terrain to navigate. “Home Centre, Home Stop and Hometown were the three formats that came about around the same time, some two decades back. And the onus of category creation was on them,” explained Ankur Bisen, Senior Partner & Head, Retail, Consumer Products and Food, Technopak Advisors Pvt. Ltd.
However, being retail conglomerates with other formats such as food and fashion to focus on, for all three, the home business ran as a sort of addendum to the entire retail story, he explained. Realising the limited addressable opportunity in the market, not for a lack of demand, but given the supply chain complexity and the focus it required to build this category grounds up, Shoppers Stop scaled down its ambitions in the category. And Future Group collapsed. Then Ikea and other players like Urban Ladder and Pepperfry entered the market and Home Centre still continued.
“That is where and that is why Home Centre is a story,” said Bisen adding that Home Centre was one of the first to help organise the home category. So, when Home Centre opened, it gave aspiring Indian consumers a different shopping experience.
So, when Home Centre opened, it gave aspiring Indian consumers a different shopping experience for their home needs—sprawling 20,000 sq. ft. to 40,000 sq. ft. spaces showcasing high-quality products based on international trends, complete coordinated collections between furniture and homeware, assistance in visualizing how a particular furniture or home décor piece will look in their homes, and a loyalty programme among other things—in a single place.
Most of the stores were in malls alongside other group formats—Lifestyle (department store) and value-format Max. Over the years, Home Centre, continued to gain a foothold in the market by offering innovative products, expanding its presence, especially in new tier 1 & tier 2 markets, rolling out a sharper pricing strategy, making store layouts more customer-friendly and launching www.HomeCentre.com, its e-commerce portal.
And now, almost two decades since it opened its first store in Gurugram, the home improvement chain is still a key player in the country’s home décor segment, which is projected to grow at a compound annual rate (CAGR) of 6.20% during 2023-2028 as per IMarc Research.
Current Catalogue
Home Centre has a footprint of 95 stores across the country with an average store size of 25,000 sq. ft. spread across malls and high streets. It contributes 10% -12% to Landmark Group’s overall turnover in India. Its presence is largely in metros, with 60% of stores in these cities. “Our store expansion is in line with retail space development in the country. Non-metros expansion has taken pace in recent years,” said Chief Executive Officer Sitaram Kumar who took over the reins in 2022.
“We call it city strategy. We analyse each city and make our decisions on market expansion. In India, the retail market is growing beyond metros, and we too foray into new markets, however, continue to strengthen our metro presence,” he explained. In the second half of the financial year 2024, the retail chain launched another store format of about 24,000 sq. ft., dedicated to homeware. Currently, it has two stores in the new format—one at the Phoenix Mall of Millennium, Pune and the other at Phoenix Mall of Asia, Bengaluru.
While the product portfolio largely remains the same, enhanced retail experience has been the focus of the new stores in terms of store layout, product presentation, visual merchandising, display fixtures, in-store branding and product interaction.
“We call it the ‘Store of the future’. This is going to be our new way of renovating old stores. Ten large format stores in metros are going to be the first phase of renovation in the coming years starting from the next quarter,” shared Kumar.
He explained that the new format allows the brand to speed up its footprint in the fast-paced mall development landscape. “Currently, we have both the formats in our expansion plan,” he added.
Tackling competition
Today, the category has several players, the biggest being Ikea and many D2C brands all vying for a piece of the potential action—a market size of Rs1,95,200 crore by 2035. Kumar seems to welcome the competition. “I see the advent of more players in the category not as a challenge but as a catalyst. The Indian market is still largely underserviced, especially in the home segment, and there is enough room for all players to coexist and grow profitably,” he said.
Even today, only 2-3% of the overall $125 billion home décor market, which has 60-70 subcategories, is organized said Bisen of Technopak. “And Home Centre has about 5% market share in the furniture and furnishings segment, he added. Kumar feels that there is a lot of scope for everyone to coexist. “In fact, more players entering will only help increase the penetration of organized retail and build an appetite for branded goods across the country,” he said adding that often they complement each other rather than compete.
Home Centre derives confidence from its two decades of presence in the country, which has given it unique insights into the tastes and preferences of Indian customers. This, combined with its ability to forecast trends, work on new materials and maintain the freshness of offerings through frequent product launches and customisation shores up its conviction.
Omnichannel strategy
The online furniture and home decor market in India was around $17 billion in 2023, as per Ken Research. Home Centre started selling online six years back and currently, 15% of its business comes from its online channels. To facilitate the shift from offline-first to online Home Centre had to build skill sets and capabilities in online order fullfilment, content, and online marketing to build agile teams that could adapt and pick up new skill sets rapidly. “E-commerce has helped increase our reach to newer geographies where Home Centre still does not have a presence and help us expand our customer base,” said Kumar.
To compete with heavy discounting offered by online-first players in the category, the brand works on both aspiration and affordability. “Especially to cater to the online price-sensitive customers, we also have launched Special Merchandise Units (SMUs) traded only on our online business at special prices and exclusive to online,” shared the CEO adding that its existing customers are now seen shopping both online and offline, increasing their spends
and frequency and leveraging the benefits of the retailer’s omnicapabilities. Home Centre’s omnichannel strategy is centred around furniture.
“Tech tools are built and implemented in the stores and on online platforms that enable a cross-channel seamless furniture shopping experience – from discovery to acquisition,” said Kumar who joined Home Centre in 2005 as a buyer. Store furniture users can make a cart on the app and close the transaction from the comfort of their home and online users can book an appointment at the nearest store for a video call to experience the product or can choose to visit the nearest store. Customers can also check the availability of products in the nearest stores on the brand’s online platform.
Homing in on technology
Over the years, tech has helped the chain bring efficiencies in multiple backend business functions such as furniture delivery management, live order tracking in supply chain management and customer complaint redressal among other areas. At the front end, audit and task management in-store operations, mobile point of sale (POS) for fast billing, omni selling through lead management tools are some key activities where the retailer has leveraged technology to drive efficiencies.
Expansion plans
Home Centre has been opening an average of 10-12 stores per year and it will continue to expand in a similar way in the coming years as well, with a continued focus on opening large format stores enabling it to further penetrate metros and tier 1 markets. For its online business, furniture is delivered in the cities where its stores are present. The Bengaluru-headquartered chain is working on expanding PIN codes where its stores are not present and delivering through its closest warehouses. On the customer front, the brand is focusing on the younger cohort and tapping into the burgeoning Indian middle class to help expand its customer base.
Focus in 2024
In the new year, e-commerce will continue to play an important role in improving the brand’s reach. “Hence, omnichannel strategy is key to being successful along with a robust supply chain,” shared Kumar. “We will continue to heavily utilize data-driven decision-making
models,” he added. The focus will also be on offering an enhanced customer experience through curated collections and new-format stores. The company is bullish on the market and the opportunity it offers. When asked about the outlook for Home Centre, Bisen of Technopak said, “The future is bright. The market is not going away anywhere because it is unorganised and remains fragmented. So, the question now is how do you capture the incremental demand in an unfragmented manner, in a consolidated manner?” That will be the key to the brand’s success going forward.
