The home improvement market in India is becoming one of the most lucrative ones as a result of rising disposable incomes, rising real estate prices, and technological improvements.
According to a 2019 Global Industry Insights, Inc. analysis, India’s home improvement market revenue is anticipated to increase from USD 800 million in 2018 to over USD 1,120 million by 2025. The rise of the home improvement market is being driven by the trend toward increasing energy efficiency as a result of favourable government regulations and the need to lower electricity bills. The fact that India now includes tax credits in its green building standards has contributed to the market’s expansion. Similar to this, the development of the home improvement market is being boosted by decreasing financing rates combined with rising land costs.
The country’s economic expansion, internal and external migration, rising employment, and fast urbanisation are some of the other important factors influencing demand.
A sizeable portion of the global market for home improvements is made up of system upgrades. High demand is anticipated mostly as a result of technical developments and an increase in remodelling services as a result of ageing housing stock. Spending on the replacement or addition of equipment such air conditioners, heaters, lighting, wiring, plumbing fixtures, water heaters, and others is included in this area. New security system development has also accelerated market expansion.
Growing Market Segments for Home Improvement
The home renovation market is further divided into a number of divisions that, as the decade turns, are expanding continuously to meet the soaring consumer expectations. Building material companies that provide “home improvement” products have changed their business models to become consumer durables companies. Products for home improvement include things like tiles, laminates, bathroom fixtures, paints, furniture, and other accessories.
Consumers of today demand a distinctive experience and are speaking out about brands and interior decor choices. Real estate developers are aggressively emphasising the quality of marble flooring and upscale, branded sanitary-ware in their marketing materials to buyers after realising this trend. People have more money available thanks to rising disposable incomes across the nation, and many want to spend it to improve the interior design of their homes. The trend is also noticeable in Tier 2 cities.
The variety of products in this area has increased dramatically over the past several years, and there are now more designs, styles, colours, and specs available than ever before. Government initiatives are the main cause of the demand surge: Government initiatives like “Swaccha Bharat” and “Gramin Awas Yojana” are expected to increase rural demand for sanitary-ware and plumbing supplies in addition to raising income levels.
Franchisee-Based Approach to Consumer Demand
Franchise-based manufacturers of consumer durables may today point to significant competencies in supply chain management, sales and distribution, brand creation, and product development. Products for home improvement are categorised and marketed to various customer groups, geographic areas, and price ranges.
Local franchisee business models that are aware of and capable of meeting the needs of area consumers have contributed to the expansion of this sector. For home renovation firms like Hindware, Jaguar, and Chhabra Marbles, availability of the correct style at the right location and time is made easier by the supply chain’s complexity.
As consumers now have the opportunity to see the products they are investing in at their local franchise of a well-known brand, franchises have reduced to circumstances of lost sales as well as non-moving inventory damaging the sales and profitability of businesses. With the aid of franchisees, home improvement firms can expand their physical reach and introduce products at various price points to appeal to consumers from a variety of geographic regions.
Word of mouth is a key factor in building brand loyalty. Companies reach out to influencers like plumbers, carpenters, interior designers, and architects to learn more about what works best. As a result, local franchise owners have the best chance of connecting with customers through high-quality products and local connections.
Home improvement franchise requirements
A franchisee in the home improvement industry would need to invest between Rs. 50 and 60 lakhs, and the space needed for these businesses might be greater than 1200 square feet. Depending on the area of the home market you franchise in, the inventory for a home improvement store will range from Rs. 20 to 25 lakhs.
Also a home improvement business can get udyam registration certificate to avail various government financial benefits.
A further 10 lakhs would be spent on the interiors. The business would also need 4+1 employees, whose pay would range from Rs. 80,000 to Rs. 1 lakh. The additional range for incidental expenses is between Rs. 80,000 and Rs. 1 lakh. However, depending on location/city, a business in this category might generate monthly sales of Rs. 12–15 lakhs, putting its breakeven point between 8–1 years.
This udyam registration form so any home improvement businesses can register thier under the MSME enterprises sector.