At the age of 59, Cello World’s Managing Director and Chairman Pradeep Rathod became the newest billionaire in India.
Cello World, a Mumbai-based firm, is the latest member of the country’s billionaires club. It produces a range of kitchenware, from snack boxes and water bottles to storage containers and plastic furniture. Cello World sells stationery, pencils, and molded furniture in addition to cookware, which makes up more than two-thirds of its total revenue.
The business went public recently. Cello World’s IPO price of Rs 648 was 28% higher than the price at which their shares were listed, and the issue was 39 times oversubscribed.
Rathod is a seasoned expert with more than 40 years of manufacturing and trade expertise in raw materials, plastic, and thermoware products. Since the beginning, he has played a key role as a Director in Cello World. Gaurav Rathod, Pradeep Rathod’s son, and Pankaj Rathod, Pradeep Rathod’s younger brother, are both managing directors in the company. The Rathods are major shareholders of Wim Plast Ltd, a BSE-listed firm best known for its Cello-branded plastic furniture.
Pradeep Rathod – Early Life
Cello World began in 1962, when Pradeep’s late father, Ghisulal Rathod, partnered with a small maker of plastic items. Building on this foundation, Pradeep and his 56-year-old younger brother Pankaj Rathod, who serves as the company’s joint managing director, have expanded into new product categories.
Pradeep’s son, Gaurav, who received his education in the United Kingdom, plays an important role as joint managing director, contributing to Cello World’s continuous growth.
According to Forbes, Pradeep’s $ 44% stake in Cello World is worth $1 billion.
Cello World, based in Mumbai, has grown into a well-known supplier of kitchenware, with a diverse product line that includes snack boxes, water bottles, storage containers, and plastic furniture.
The company’s product line also includes plastic, glass, and porcelain goods, resulting in a 70% increase in sales.
Cello World, which manufactures consumer housewares, devices for writing, and molded furniture, was compelled to boost the IPO size to Rs 1,900 crores from the Rs 1,750 crores suggested in the offer document submitted with the SEBI in August of this year. The issue is a comprehensive offer for sale (OFS) of shares by the promoters and other selling shareholders, which implies the money will not go to the firm, instead, it will go to the current owners.
Rathod explained why the IPO size was increased, saying, There was a lot of demand, so we had to scale it up a little bit. We are just selling 13.82% of our investment, not the whole stake.
He also stated that Cello World is a B2C firm and that the brand would grow and expand if its shares were listed on public exchanges.
Rathod stated that the company gets 65% of its sales from the consumer houseware division, 18% from molded furniture, and roughly 16% from writing instruments.
Cello World has reserved up to 50% of the shares in the public offering for qualified institutional buyers (QIB), 15% for non-institutional investors (NII), and 35% for retail investors, according to the offer document filed with the SEBI. Under the employee reserve part, the business has reserved shares worth 10 crore for qualified workers, which will be issued at a discount of Rs 61 per equity share.
Cello’s consolidated revenue increased 32.19% to Rs 1,796.69 crore in fiscal year 2023, from Rs 1,359.18 crore the previous year. From Rs 219.52 crore in fiscal 2022 to Rs 285 crore in fiscal 2023, net profit increased by 29.86%.
2023
2022
Percentage Increase
Consolidated Revenue
Rs 1796.69 crore
Rs 1359.18 crore
32.19%
Net Profit
Rs 285 Crore
Rs 219.52 crore
29.86%
Pradeep Rathod – Journey So Far
Cello World is a company that manufactures a variety of home items. Understanding the everyday demands of the Indian family, Cello offers a diverse product line that includes melmoware, therm-oware, opal ware, kitchen appliances, glassware, melamine ware, automotive tools and dies, cleaning equipment, and air conditioners. With significant technological improvement, Cello has driven the transformation of the Indian home industry.
Plastic housewares goods were introduced by the firm in the 1980s. Cello entered the furniture market in the 1990s, and in 2017, Gaurav, who had joined the company seven years prior, introduced the ‘opalware’ section.
From seven machines and 60 employees, the firm now employs over 6,000 people and operates plants in Haridwar, Kolkata, Chennai, Daman, Pardi, and Baddi. Furthermore, the company’s well-known pen and stationery business was sold to the French company BIC in 2013.
Cello World sells pens, stationery, and molded furniture in addition to its signature kitchenware section, which accounts for roughly two-thirds of total revenue.
The category currently accounts for 18% of total revenue.
Cello World shares, which sell kitchenware under the Cello name, debuted at a 28% premium to their IPO price of Rs 648, and the offering was 39 times oversubscribed.
It is predicted to expand even faster, at a compounded annual rate of 10.2%, reaching Rs 565 billion ($6.8 billion) by fiscal 2027, as Indians renovate their kitchens and stock them with modern items.
The firm hopes to capitalize on rising local demand for plastic furniture, which is estimated to reach Rs 270 billion ($3.3 billion) by fiscal 2027, up from Rs 122 billion ($1.5 billion) in fiscal 2022.
Cello World’s revenues have increased by 70% in the last two years. In the fiscal year that ended in March 2023, the firm earned Rs 17.97 billion. Over that time, net profit climbed by 58% to Rs 2.8 billion.
Revenue Can Grow At 30% CAGR Over Next Two Years: Cello World
Pradeep Rathod – Philanthropy
Rathod, in addition to his commercial success, is involved in charitable organizations and serves as President of the JITO Administrative Training Foundation.
Pradeep Rathod – Awards and Recognitions
Known as one of the world’s most prominent plastics manufacturers and India’s indisputable market leader, Cello is a globally recognized brand known for its vitality and spirit of innovation. Cello is continually striving to bring in the latest and greatest technology to set new quality benchmarks and to develop to carve new trails in the industry.
Awarded the renowned PLEXCONCIL AWARD 18 times in a row for NO.1 exceptional performance.
The Cello Group, which manufactures India’s favorite Cello pens, is worth Rs.1000 crore.
FAQs
Who is the Chairman of Cello World?
Pradeep Rathod is the chairman and joint Managing Director of Cello World.
What is the price of Cello World IPO?
Cello World’s IPO price of Rs 648 was 28% higher than the price at which their shares were listed, and the issue was 39 times oversubscribed.
How much are the sales from various product lines of Cello?
The company gets 65% of its sales from the consumer houseware division, 18% from molded furniture, and roughly 16% from writing instruments.
Ever wonder what happens behind the scenes of a successful sale? It all starts with understanding the process of selling. Sales are the process by which goods and services are sold. When business and sales are combined, it is possible to create a powerful combination that can be used to drive success.
It is also important to understand the strategies and tactics that can be used to make the most of these two forces. With the right knowledge and understanding, business and sales can be used to generate success in any organization. There is one organization that has taken the principle of sales to new heights. That company is Ikea and is so famous that its tricks are a benchmark in the sales world.
The IKEA effect is a cognitive bias in which consumers place a disproportionately high value on products they partially created. Consumers tend to have greater satisfaction with the products they partially assembled than with the same products when fully assembled by the manufacturer. The IKEA effect is seen as a form of the endowment effect, in which people overvalue things simply because they own them. Shocked by this? There are plenty more business tricks in the belt of IKEA.
IKEA is a multinational group of companies from Sweden that designs and sells ready-to-assemble furniture, kitchen appliances, and other home accessories. It is one of the most popular eCommerce and recognized home furnishing brands in the world. It is famous for its modern designs, low prices, and innovative flat-pack assembly system. The company’s furniture is designed to be disassembled and reassembled easily so that customers can fit it into their homes.
IKEA has become a global leader in home furnishings and is renowned for its commitment to style, affordability, and sustainability. It is also famous for its wide selection of stylish yet affordable furniture, along with its clever and efficient use of space. Products are easily recognizable for their modern, minimalist design, and its reputation for providing quality furniture at a low cost has made it a favourite of consumers around the world.
Additionally, IKEA’s flat-pack furniture, which is designed to be easily assembled by customers, has made it a popular choice for those who want to save money on furniture, as well as those who prefer to build their furniture themselves.
IKEA’s Psychological Tricks
IKEA, like many retailers, uses a variety of marketing techniques to attract customers and encourage them to make purchases. These techniques can include creating a visually appealing store layout, offering discounts and promotions, and using persuasive language in advertising and signage. Some specific psychological tricks that IKEA use are as follows
The IKEA Effect
The IKEA effect is a cognitive bias in which consumers place a disproportionately high value on products they partially created. It is named after the Swedish furniture company IKEA, which sells many do-it-yourself products. The effect implies that consumers typically place a higher value on products that they have invested effort into assembling or creating themselves, rather than products that are sold pre-assembled. This is because they feel a greater sense of ownership or pride in the product they have created.
The IKEA effect named after the Swedish furniture retailer IKEA, which sells many ready-to-assemble furniture products that require the customer to assemble them.
IKEA worldwide Retail Sales Share
Location
Store locations: Stores away from the town centre often have lower overhead costs due to the lower rent and property taxes. Store location is one of the key factors to attract more customers. This allows them to pass those savings on to their customers, resulting in lower prices and more competitive offerings.
Less Competition: Many stores located away from the town centre may have less competition, as most local businesses tend to be located closer to the town centre. This can benefit business owners as it allows them to have a more competitive edge in their local market.
More Space: Stores located away from the town centre often have more space for customers to move around and for the store to be laid out more attractive and organized, which can help boost sales.
Better Parking: Stores located away from the town centre often have more dedicated parking, making it easier and more convenient for customers to park their vehicles.
Better Customer Experience: Stores located away from the town centre may be able to offer a better customer experience with less rushed shopping as there may be fewer customers in the store at any given time.
It is through sales that customers are attracted to a company’s products and services, and it is through sales that a company can generate revenue and profits. It is through sales that a company can increase its market share and gain a larger share of the market.
The Long Maze
The IKEA stores are designed in a labyrinthine fashion, with customers having to pass through several sections of the store before reaching the checkout. This encourages customers to stay in the store longer, exposing them to more IKEA products. The layout of IKEA stores is often referred to as a “maze” design because it guides customers through a series of winding paths and corridors that lead them through the different departments and product displays.
The purpose of this layout is to encourage customers to spend more time in the store and to expose them to a wide range of products. One reason IKEA uses this layout is to create a sense of discovery for customers. By guiding them through different areas of the store, IKEA can showcase different products and create a sense of excitement and surprise as customers encounter new items.
Another reason for the maze design is to increase the likelihood that customers will make impulsive purchases. By leading customers through a series of twists and turns, IKEA can expose them to more products than they might see if they were able to walk straight to the items they came to purchase simply. This can increase the chances that customers will see something they hadn’t planned on buying and decide to add it to their cart.
The maze design is also intended to create a sense of disorientation for customers, making it harder for them to keep track of where they are in the store and how much time they have spent there. This can make it more difficult for customers to make quick decisions and leave the store, encouraging them to spend more time browsing and potentially causing more purchases.
IKEA Global Retail Revenue
Guiding arrows
When you see directions, you relax and give your decision-making skills to the GPS. This is the same with IKEA. Its stores are designed to guide customers through a series of winding paths and corridors that lead them through different departments and product displays. To help customers navigate the store, IKEA provides a variety of directional aids, including:
Maps: IKEA stores typically provide maps near the entrance that show the layout of the store and the location of different departments and amenities. These maps can help customers plan their route through the store and find the products they are looking for.
Signage: IKEA stores use a variety of signage to help customers find their way around. This includes directional signs that point the way to different departments and product displays, as well as signs that indicate the location of restrooms, customer service, and other amenities.
Floor markers: IKEA stores often use floor markers or markings to help customers follow the correct path through the store. These markers may be arrows, dots, or other symbols that show the direction to follow.
Staff assistance: IKEA stores also have staff members who can assist customers with directions or help them find specific products. Customers can ask for assistance at any time if they need help navigating the store or finding a particular item. All these tricks help not only the customers to navigate but also the company to navigate to higher revenues.
Fully closed stores
Customers lose the sense of time while shopping at IKEA. The combination of the store’s layout, the wide range of products, engaging displays, and customer amenities can all contribute to people losing track of time while shopping. The stores offer a wide range of products, including furniture, home decor, kitchen and dining items, and more.
This can be overwhelming for some customers and make it more difficult for them to stay focused on shopping goals. These stores often use visually appealing and interactive displays to showcase their products. Customers may be drawn to these displays and spend more time exploring them, which can cause them to lose track of time.
Listing help
Writing down a shopping list can be a useful psychological sales trick for retailers because it helps customers focus on their specific needs and goals and can encourage them to make more thoughtful deliberate purchases. Some specific ways that writing down a shopping list can be a psychological sales trick include:
Clarifying priorities: By writing down a shopping list, customers can prioritize their needs and focus on the items that are most important to them. This can help them make more targeted, efficient purchases and avoid unnecessary or impulse buys.
Creating a sense of commitment: When customers write down a shopping list, they are more likely to feel committed to sticking to their plan and making the purchases they have listed. This can reduce the likelihood of them being swayed by other items or promotions that they encounter while shopping.
Increasing perceived value: By writing down a shopping list, customers may perceive the items they purchase as being more valuable because they have taken the time to carefully consider their needs and make a plan. This can increase their satisfaction with their purchases and their loyalty to the retailer.
In-house Dining
IKEA offers free meals in its restaurant, which encourages customers to stay in the store longer, increasing the chance of them making a purchase. In-store dining is a common amenity offered by retailers, including IKEA, and it can be used as a psychological sales trick to encourage customers to spend more time in the store and potentially make more purchases. One way in-store dining can be used as a psychological sales trick is by creating a sense of comfort and relaxation for customers.
When customers feel comfortable and relaxed while shopping, they may be more likely to spend more time in the store and explore different products. This can increase the chances that they will make impulsive purchases or simply spend more time browsing and potentially making more purchases overall. In-store dining can also create a sense of community and socialization, which can be appealing to customers. By offering a place for customers to sit and relax, retailers can create a sense of belonging and encourage customers to stay in the store longer.
Another way in-store dining can be used as a psychological sales trick is by providing an opportunity for retailers to upsell or cross-sell products. For example, If a customer is dining in an IKEA cafe, the retailer may suggest that they purchase a particular item or offer them a special promotion while they are there.
Overall, in-store dining can be a useful tool for retailers to create a positive shopping experience for customers and encourage them to spend more time in the store, potentially leading to increased sales.
Mirrors everywhere
Mirrors are a common feature in retail settings, and they can be used for a variety of purposes. One psychological sales trick retailers may use mirrors is to create the illusion of more space in the store. By strategically placing mirrors, retailers can make a small space feel larger and more open, which can be appealing to customers. Another psychological trick retailers may use mirrors is to create the illusion of increased activity or interest in the store. For example, If a store has a lot of mirrors, customers may see reflections of other customers and perceive the store as being more popular or busy than it really is. This can create a sense of social proof, making customers more likely to feel that they should be in the store too.
Retailers may also use mirrors to influence how customers perceive themselves and the products they are considering purchasing. For example, if a customer sees themselves in a mirror while trying on clothes, they may be more likely to focus on their appearance and how the clothes look on them, rather than just considering the clothes themselves. This can make the customer more likely to make a purchase.
Overall, mirrors can be a powerful tool for retailers to use in their marketing efforts, as they can create the illusion of increased space, activity, and self-perception, all of which can influence customers’ behaviour and purchasing decisions.
IKEA color codes its products and store sections to reinforce brand recognition and make it easier for customers to find what they’re looking for. One way that color coding can be used to influence customer behaviour is by creating a sense of order and organization. By using different colors to indicate different categories of products, retailers can make it easier for customers to navigate the store and find what they are looking for. This can create a sense of calm and control for customers, which can make them more likely to make purchases.
Another way that color coding can be used in marketing is to associate certain colors with specific emotions or meanings. For example, Retailers may use the color red to indicate a sale or special offer, as it is often associated with feelings of excitement and urgency. Retailers may also use color coding to create a cohesive brand image by using specific colors consistently throughout the store.
Limited Edition Products
IKEA releases limited edition products to create a sense of urgency among customers and encourage them to buy the items quickly. The principle of scarcity is based on the idea that people value things more when they perceive them as being rare or hard to obtain. By creating a sense of scarcity around a product, retailers can increase its perceived value and encourage customers to make a purchase. They may look like these headings
Limited-time offers: Retailers may create a sense of urgency around a product by promoting it as a limited-time offer. This can make customers feel like they need to act quickly to take advantage of the deal, which can increase the likelihood of a purchase.
Limited quantities: Retailers may create a sense of scarcity by promoting products as being in limited quantities. This can make customers feel like they need to act quickly to secure the product before it runs out, which can increase the likelihood of a purchase.
Rare or hard-to-find items: Retailers may promote certain products as being rare or hard to find, which can increase the perceived value of the product and make it more appealing to customers.
Sold-out items: Retailers may promote products as being sold out or unavailable to create a sense of scarcity and encourage customers to purchase similar or related items.
Smells
IKEA uses the smell of cinnamon buns in its stores to encourage customers to stay in the store longer. It is common for retailers, including IKEA, to use various sensory elements, such as smells, as part of their marketing strategy. The use of pleasant smells in retail environments can be a form of sensory branding, which is the practice of using sensory elements to create an emotional connection with customers and strengthen the brand’s identity.
In the case of IKEA, the use of smells can be an effective way to create a positive shopping experience for customers and influence their behaviour. Some specific ways that IKEA and other retailers might use smells in their marketing include
Creating a welcoming atmosphere: Retailers may use pleasant smells, such as the aroma of coffee or baked goods, to create a warm and inviting atmosphere in the store. This can make customers feel more comfortable and encourage them to spend more time shopping.
Enhancing the appeal of products: Retailers may use smells to enhance the appeal of specific products, such as by using the scent of freshly baked cookies to draw attention to a display of kitchenware.
Triggering memories and emotions: Smells have the ability to trigger memories and emotions in people, and retailers may use this to their advantage. For example, the scent of pine trees may be used to create a festive atmosphere during the holiday season, or the aroma of lavender may be used to create a relaxing atmosphere in a bedding department.
Conclusion
Business and sales can be used to attract customers, generate revenue, and increase market share. In order to be successful in business and sales, it is essential to understand the power of these two forces. IKEA uses a variety of psychological tricks to attract and persuade customers to make purchases. These techniques include creating a visually appealing store layout, using scarcity and loss aversion to create a sense of urgency, and leveraging the power of social proof to encourage customers to follow the lead of others. IKEA uses techniques to create positive shopping experiences and inform customer purchasing decisions, as part of their overall marketing strategy. These techniques are not deceptive or unethical.
FAQ
What is unique about IKEA’s strategy to attract customers?
Using mono-segment, adaptive and aesthetic types of product positioning. The furniture retailer targets a cost-conscious customer segment that prefers to get value for the money they pay. Accordingly, IKEA has adapted as the unique selling proposition of the brand.
What is the Ikea effect in psychology?
The IKEA effect, named after everyone’s favourite Swedish furniture giant, describes how people tend to value an object more if they make (or assemble) it themselves. More broadly, the IKEA effect speaks to how we tend to like things more if we’ve expended effort to create them.
What are the key factors for the success of IKEA?
At the heart of Ikea’s success is value: You know what you’re going to get when you shop at Ikea, and it’s going to be affordable. In fact, price is so important to Ikea’s strategy that the company first decided on the price of a piece of furniture and then reverse engineers the construction.
What is unique about IKEA’s business model?
IKEA uses the services of around 1400 suppliers from over 60 countries. These suppliers form a big chain and also help IKEA in venturing into fresh markets. Additionally, it uses semi-skilled and skilled labour that becomes an integral component of its supply system.
Company Profile is an initiative by StartupTalky to publish verified information on different startups and organizations. The content in this post has been approved by Godrej.
The conglomerate industries are those that own many smaller firms that operate in different production of goods like medicines, food, apparel, household goods, kitchen appliances, etc. We are all aware that India houses many such conglomerate companies.
It is quite fascinating to see how these companies operate so many businesses. While they are engaged in such businesses, what exactly is the reason for them to do so? The answer is they want to lower the business risks by decreasing the dependence on just a single product or market for that matter.
Godrej, the brand we all know, is an Indian multinational conglomerate that was founded in 1897, almost, 125 years ago. The persons behind Godrej’s establishment are Ardeshir Godrej and Pirojsha Burjorji Godrej.
As a conglomerate company, Godrej is engaged in many businesses like – consumer goods, real estate, furniture, industrial engineering, appliances, security, and agricultural products.
To know more about the company, Godrej, read on to uncover its startup story, founders, business and revenue model, the challenges faced, investors, competitors, and more.
Godrej was established before India got its independence. The company was founded in 1897 by Ardeshir Godrej and Pirojsha Burjorji Godrej. Today, around 1.1 billion people worldwide support Godrej’s businesses in a variety of industries. The company’s geographic influence actually goes beyond Earth because a lot of India’s space projects are currently powered by its engines.
Godrej has a turnover nearing Rs 70 billion at the end of the fiscal year 2022. The corporation works in a variety of industries, including agriculture, consumer goods, industrial engineering, real estate, appliances, and furniture. Its affiliates and subsidiaries include the private holding firm Godrej & Boyce Mfg. Co. Ltd., Godrej Consumer Products, Godrej Agrovet, and Godrej Properties, as well as Godrej Industries and its subsidiaries.
For Godrej, the core of everything is its people. They take great satisfaction in cultivating a culture of high performance and agility in the workplace. Additionally, Godrej has a strong commitment to valuing and recognizing diversity among its employees.
Godrej – Founders
Godrej was founded by Ardeshir Godrej and Pirojsha Burjorji Godrej in 1897.
Ardeshir Godrej & Pirojsha Burjorji Godrej – Founders of Godrej
Ardeshir Godrej
The first of Burjorji and Dosibai Gootherajee’s six children, Ardeshir Burjorji Sorabji Godrej was born in 1868. The Gootherajees were a prosperous Parsi-Zoroastrian family from Mumbai, and Burjorji and Sorabji, Ardeshir’s father and grandfather, were real estate brokers. His father changed the family name to Godrej in January 1871. Ardeshir with his brother Pirojsha co-founded the Godrej Brothers Company, which today is known as the Godrej Group. Ardeshir wed Bachu (Bachubai) in 1890, who had just turned 18 years old.
Pirojsha Burjorji Godrej
Priojsha Burjorji Godrej is the brother of Ardeshir Burjorji Godrej and a son of Burjorji Godrej. Projsha and his brother Ardeshir established the Godrej Group, an international business. At the age of 24, shortly after receiving his diploma from Mumbai’s Victoria Jubilee Technical Institute, Pirojsha joined the company. Due to the flu outbreak, Pirojsha’s young wife Soonabai passed away in Mussoorie. He had three sons Sohrab, Burjor, and Naval, and one daughter called Dosa. In the Mumbai suburbs, the industrial township of Pirojshanagar bears his name. The Godrej Group is currently led by Pirojsha’s grandchildren Adi, Nadir, and Jamshyd.
Godrej – Startup Story
After being established in 1897, a few years later, Godrej started by introducing Chavi, the first animal-fat-free soap ever produced in the world. In 1922, renowned figures like Annie Besant and Rabindranath Tagore came in support of Godrej’s products.
In a letter to a rival seeking a favor, Mahatma Gandhi wrote: “I hold my brother Godrej in such high respect that if your endeavor is going to injure him in any way, I regret very much that I cannot grant you my blessings.
Godrej then launches furniture with almirahs (steel cupboards) after locks and soap in 1923. On the day of Indian Independence in 1952, Cinthol is introduced by Godrej, which makes them by ranking as the second-largest soap manufacturer in India. In 1958, refrigerators are launched by the company.
In the 1990s, by founding Godrej Properties, the company introduced the Group’s culture of innovation and excellence to the Indian real estate sector. After one year, the company steps into agribusiness by establishing Godrej Agrovet. In 1997, Godrej completes 100 years of its existence as a group.
With the introduction of Godrej Nature’s Basket, Godrej enter the gourmet retail market in 2005. With over 30 premium outlets, the company is currently India’s top shopping destination for fine goods from around the world. In 2008, India becomes the fifth country to deploy an unmanned mission to the moon with Chandrayaan-1. The company takes pride in the engineering know-how and contributions to the construction of the mission’s launch vehicle and lunar orbiter.
Around 2010, Godrej strives to create a more ‘green’ and ‘good’ environment for the country. On India’s first Mars mission, Godrej is honored to work with the Indian Space Research Organization. The Polar Satellite Launch Vehicle is powered by Godrej Aerospace engines.
The National Stock Exchange and the Bombay Stock Exchange both listed Godrej Agrovet Limited in 2017.
Godrej delivers the 95-meter-tall Continuous Catalytic Regeneration reactor for Nigeria’s Dangote Oil Refinery in 2019, the tallest in the world. It is said to be greater in height than the Qutub Minar.
Godrej – Mission and Vision
Godrej’s mission statement says, “Our passion and purpose is to make a difference through our ‘Good & Green’ approach to create a more inclusive and greener India.”
The vision of Godrej is “Godrej in every home and workplace.“
Godrej’s Values are:
Integrity
Trust
Care for the Environment
To Serve
Respect
Godrej – Name, Logo, and Tagline
Godrej’s logo is taken from PirojshaBurjorji Godrej’s signature.
The tagline of Godrej is, “Brighter Living”
Initially, the company was started with the name, Godrej Brothers Company, and later on, was changed to Godrej Group.
Godrej – Business Model
Godrej is a conglomerate company, whose business model consists of different types of businesses.
Godrej’s Business Vertical contains the following products and services:
Aerospace and Defence
The company has over 200+ Liquid Propulsion Engines for launch vehicles with 600+ thrusters for satellites with an experience of 50+ years of machine-building experience. They are currently working on civil aviation projects with major international companies like Honeywell, GE, Rolls Royce, Boeing, and Safran.
Appliances
Godrej has served 36+Countries. They have created energy-efficient, water-saving, and ecologically friendly air conditioners, refrigerators, and washing machines.
Chemicals
They have broadened their product line to include specialty goods with added value, and export to more than 80 nations in North and South America, Asia, Europe, Australia, and Africa. Godrej is one of India’s leading oleochemicals players, manufacturing and marketing over 100 key chemicals.
Financial services
Godrej offers financial services like loans against property and home loans with Godrej Capital Limited as the holding entity for Godrej Housing Finance (an HFC) and Godrej Finance Limited (an NBFC).
Food & Agribusiness
Godrej produces Crude Palm Oil and Palm Kernel Oil through its Oil Palm Business, Animal Feed business, and Food & Beverage brands with products like Real Good Chicken and Yummiez. It also offers a range of beverage mixes such as tea, coffee, whitener, soups, special Indian drinks, a range of tea bags, and cold beverages.
Furniture, furnishing, and fittings
Godrej has 34 design mark awards with 85+ certified green products. The group has a brand called Godrej Interio, India’s oldest and largest brand of home and office furniture.
General Engineering
Godrej offers products like Godrej Lawkim Motors, Godrej Tooling, Godrej Electricals & Electronics, and Godrej Precision Engineering. The company has over 300+ Gold and Platinum-rated projects.
Heavy Engineering
With Godrej Process Equipment, the company has ranked as the world’s top process equipment fabricator.
Home and Personal Care
The company is the market leader in India for hair color (with Godrej Expert, Godrej Professional, Nupur, and BBLUNT) and ethnic hair color in Sub-Saharan Africa (with Inecto), as well as one of the top companies in Latin America. Their portfolio includes the legendary Darling brand, among other brands (with Illicit, Issue, and Roby). Along with this, Godrej shares the number two spot in the Indian soap market with Godrej No. 1 and Cinthol and holds the top spot in the air freshener market in both India (with Aer) and Indonesia (with Stella). Along with Ezee, they are also the market leaders for liquid detergents in India and wet tissues in Indonesia (with Mitu). Its home and personal care business is operated under its subsidiary company – Godrej Consumer Products Limited (GCPL).
Information Technology
With the www.godrejinfotech.com website, Godrej offers a wide range of IT services with digital and technological solutions, implementation and Global Rollout, Application support & maintenance, Mobile Development, and Training.
Infrastructure
Godrej delivers solutions that address a wide range of needs, including Public Health Engineering (PHE), Electrical, Fire Safety, and HVAC (Heating, Ventilation, and Air-conditioning) systems, thanks to its extensive project management experience across residential, commercial, and industrial establishments.
Intra-logistics
Offering in India and beyond in South East Asia, Europe, and the Middle East, Godrej serves Intra-logistics services. From pharmaceuticals, chemicals, agrochemicals, food, and beverages to textiles, paper, paints, automotive, railways, and defense, they provide services to a variety of industries.
Real Estate
One of the biggest publicly traded real estate companies in the nation, Godrej Properties has a diverse portfolio that includes commercial, residential, and mixed-use developments distributed across India’s major cities. The Godrej Group’s innovation, sustainability, and excellence-focused philosophies are brought to the real estate sector by Godrej Properties. Each of its developments combines a dedication to cutting-edge design and technology with the Group’s history of excellence and trust.
Power and Energy
Godrej has commissioned more than 25 substations and 300 km of 400kV transmission lines have been put into service. Over 16 lakh households in 20,000 villages and 56 major areas in India have been electrified as a result of these programs, which have also installed millions of solar panels to produce renewable energy.
Locks and Security Solutions
From the classic Navtal lock, Godrej offers have developed into high-end, all-encompassing security systems that today protect millions of homes, workplaces, and the locations of illustrious organizations like the Reserve Bank of India, the Taj Mahal, and other significant national organizations. It has benefited more than 1.5 million customers in 65 countries. The company owns an 80% retail market share in home security.
Godrej – Revenue Model
It was reported that Godrej generated nearly Rs 70 billion in revenue in 2022.
The company’s half of its revenue is in the FMCG business, which comes from its international businesses in three emerging markets – Asia, Africa, and Latin America, across three categories – home care, personal wash, and hair care.
Godrej Consumer Products generated around Rs 12,366 crores in revenue in 2022.
Godrej – Challenges Faced
Godrej Consumer Products Limited (GCPL), faced some challenges after five of its eight operations were acquired in 2021. GCPL has a 51% stake in the African hair care firm Darling Group Holdings.
The company struggled to keep up with the emerging demands of the consumer market as the company aims to be a global market in consumer goods. The company believes that local manufacturers of consumer goods are searching for fresher markets abroad as domestic rivalry heats up to fill voids or categories currently occupied by international corporations.
Godrej – Mergers, and Acquisition
Godrej Consumers Product Limited (GCPL) has purchased overseas firms like Keyline Brands Limited (United Kingdom) in 2005, Rapidol (Pty) Limited (South Africa) in 2006, Godrej Global Mid East FZE (Argencos, Argentina) in 2007, and Cosmética Nacional (Chile), among others.
Godrej stated in 2015 that it has acquired a 100 percent equity investment in the South African company Frika Hair.
Godrej Nature’s Basket has acquired EkStop on Feb 17, 2015. They acquired EkStop for $4.8M.
Godrej Agrovet has invested in and made two acquisitions in total. For the purchases, the corporation has invested about $ 83 million. Godrej Agrovet has invested in several industries, including genomics, livestock technology, and others.
Godrej – Advertisements and Social Media Campaigns
With a huge number of followers on its social media pages, Godrej plays like a mastermind when it comes to advertisements and social media campaigns.
One of India’s top real estate developers, Godrej Properties Ltd. (GPL), announced the beginning of its digital brand campaign, #EverydayJoys- Jahaan Khushiyan Badi Hoti Hai. The advertising highlights GPL’s mission to build communities, families, and homes that enable everyday joys one at a time. The campaign was launched in November 2021.
Three digital video advertisements were produced by the company to showcase the beauty of typical family moments that we all enjoy at home. They serve to emphasize how a central home is to most of our favorite recollections. These three movies strive to portray the ideal family moments, daily routines, and favorite spots that everyone has at home.
Godrej – Awards and Achievements
The list of awards and achievements won by Godrej are:
Cinthol ranked 47th overall in the Economic Times – Brand Equity Most Trusted Brands Survey 2016.
Infor awarded Godrej Infotech for “Golden Deal of the Year for 2013”
Ÿ GCPL was ranked number 12 on the ‘Great Place to Work – Best Workplaces in Asia 2017’ list and among the top 19 Best Employers in India in the ‘Aon Hewitt Best Employers 2017’ survey.
Godrej Appliances was awarded the title of Asia’s most promising brand at the Asian Brand and Leadership Summit 2013.
Godrej Appliances won Gold in the category – ‘Most Trusted Brand’ at the Reader’s Digest Awards in 2008 for the 3rd consecutive year.
Recently, Godrej Properties’ net profit tripled to Rs 45.55 crores in the April-June quarter this month. The company plans to deliver over 10 million sq ft in the coming FY23. According to Godrej, the company anticipates a robust launch pipeline this year, which will include both new projects and new phases of ongoing projects in several cities. In the June quarter, three projects were launched.
FAQs
Is Godrej a private company?
Yes, Godrej is a privately held company.
Who owns Godrej?
The company is largely owned by the Godrej family.
Who is the current CEO of Godrej?
Sudhir Sitapati is the current CEO and MD of Godrej.
Is Godrej an MNC?
Yes. Godrej is a multinational company based out of India.
It is 2022 and nearly every single commodity or service that exists is up for sale on the internet. It is indeed the age of online shopping. From groceries to jewelry, you can shop for everything online. One just needs to search for it, a thousand options and hundreds of sellers are available right in front of your phone screen.
It’s just a matter of clicks and items in your wish list are delivered within the span of 10 minutes to 2-3 days. All this is rightly termed e-commerce and we can’t emphasize enough the fact that the world has gone completely online and there is no stopping buy.
More and more people are joining the world of daily online e-commerce transactions thanks to the rising cases of the COVID-19 pandemic which brought the whole world under a single web internet. A truly astonishing number of people each year connect to online e-commerce websites and we can’t believe the numbers we see.
In the years 2020 and 2021, more than two billion individuals made purchases online, and if we go on to add up all the data together, we’ll find that more than one-fourth of the world’s population has access to a minimum of one or more e-commerce shopping sites and platforms.
But have you ever wondered what people buy on these platforms? No, it is not only limited to electronics or clothing, the list is long. It is evident that online apps deliver very basic needs such as groceries and toiletries at doorsteps, and offline purchases have tremendously decreased.
But what is the proportion? Since a lot of the public still believes in shopping for their stuff offline, we cannot conclude that the online market is the real boss. We are here to decode the data with the help of reliable sources and surveys available on the internet let us see. Online shopping saves money, saves time, is exciting, and is revolutionizing the way a consumer’s psychology acts.
So, E-commerce companies have always been a great option for online purchasing since the introduction of digitization. Many consumers never even consider a day without purchasing from an online retailer of goods. Surveys and researches say that by the end of 2050, more than half the population of the world would be buying and selling online. So we are heading towards the ultimate digitization.
Both owners and consumers may take advantage of online transaction facilities due to the transformative effects of digitization and widespread public access to the internet. People can select whatever daily-use item they want, including kitchen and household appliances. Let us see what is sold the most and least, online.
1. Clothing & Apparel
Different Clothing and E-commerce Sites
Among the majority of people shopping online, most of them prefer buying clothes. The reason being they get access to a vast variety of clothing and apparel options from which they can choose. This is way more than the limited stock shown to them in a physical shop or store.
They get to choose the color, range, fabric, design, brand, occasion, etc. easily. Plus most of the online shopping sites provide free shipping and exchange too which might not be possible in the marketplace.
The above graph shows the global apparel market size revenue in billion US dollar
2. Footwear & Shoes
Various Footwear and Shoes E-commerce Sites
Regarding shopping for footwear online, surveys say that around 58-60% of people choose to buy their shoes online. Earlier due to size issues people chose to stay limited to physical stores for their footwear.
But with companies introducing standard footwear sizes online, most of them have shifted to online shopping. Needless to mention, they get access to a lot more options in the online mode, and easy exchanges and returns add to the facility hence adding to the no. of online shoppers.
The above graph shows the global e-commerce shoe segment with its revenue in billion US dollars as per the data published by Statista
3. Electronics & Gadgets
Various E-commerce Sites for Electronics and Gadgets
Almost 90% of the people who use online shopping have once in a lifetime bought an electronic appliance, gadget or device, or device online, according to recent surveys. Great offers, discounts, and deals are mostly available online which might be absent in a physical store.
Because electronics are quite expensive, people always want to save on them. Hence they prefer buying it online. From phones to laptops and TV to fridges, online shopping sites are a hot market for electronics.
4. Games & Toys
Different Toys and Games E-commerce Sites
With the popularity of Disney, Star Wars Dora, etc., games and toys have become one of the most sold items on the online market. Hamleys, Shumee, Toy Cart, Toy Champs, etc. are some of the most famous brands selling toys online.
With the increase in the no of millennial parents, the no of parents who buy games and toys online has drastically increased. Not to forget the PlayStations such as Xbox, PS 5, Oculus, etc. are always trending online and more and more people buy them.
The above graph shows the reasons why customers prefer online shopping in place of offline shopping as per the data shared by community2business.com
5. Veterinary & Pet Items
Pet products are in great demand online. Be it pedigree, dog harness, dog belt, or dog healthcare items, people prefer buying them online to avoid the hassles of the offline market. Often the product they are looking for might not be available offline, so people are more interested in buying them online where they have great options and varieties. Around 35% of the online sales account for veterinary and pet items.
6. Stationery
Stationery items rule the world of online shopping sites. From books to pens to crayons to planners, everything stationery is sold in huge quantities every day, on online shopping sites. While you may not find the one book that you’re looking for in the city’s biggest library, you will surely find it online.
There are many unique pieces available online. From students to office-going people, everyone likes to shop their stationery online because they also get to save a big deal on it.
7. Hand & Power Tools
Gone are the days when power tools were only found to be with plumbers or mechanics. Today, the skill of repairing a leaking tap or joining a circuit box is mandatory for us all as they come under basic skills. Be it a wrench, a screwdriver, a hammer, or a drill, you may end up needing them anytime.
Hence the market for hand and power tools has grown considerably. Around 25% of online shoppers shop for them online as they come with a warranty and guarantee as well which is not common in the physical tools market.
8. Tupperware
Tupperware sales are rising day by day as offices, workplaces and schools have fully resumed post the pandemic period. People prefer buying Tupperware online because of the durability and lifetime warranty that comes with it.
Lunch boxes, bottles, containers, etc. are the favorite choices of people when it comes to buying Tupperware online. Every day thousands of Tupperware are sold in huge quantities online.
9. Furniture
Various E-commerce Sites for Furniture
The hassle of buying furniture from a physical store is way too much. There are concerns about the wood quality, durability of the furniture, etc. To avoid all this, around 30 to 40 percent of people prefer buying them online.
Furniture sales have risen drastically post the pandemic. People buy all sorts of furniture starting from rugs, recliners, and beds to sofas, etc. Sometimes there are offers of free mattresses etc. along with beds, sofas, etc. which makes it a lucrative deal for the customer.
The above graph shows the online shopping categories worldwide for 2022 in US billion dollars as per the data shared by Statista
10. Sports Products
Lately, the online sports market has been in great profit as people search for sets used by popular players which is not generally available in the market. Not only does online shopping save time but some of the people who shop online for sports products say that they typically get it at cheaper prices as compared to the market. And added benefits include certified products, free repair, etc.
The world of e-commerce or online shopping is booming! We are quite sure you too shop online. Have you shopped from the above-mentioned products offline? Every day we come across products that might not be easily found in the market. So, online shopping sites are our resort.
The above-mentioned products which dominate the online market are mostly daily-use products and it is a delight to have all of them under the same platform over the internet.
FAQs
What is the largest retail category?
The largest retail category can have a debatable answer. Currently, the largest retail category is apparel.
What categories are most frequently bought through e-commerce?
The most frequently bought e-commerce categories are toys and hobbies, food and beverages, equipment and supplies, etc.
What are product categories in marketing?
The product categories in marketing stand for a group of products all sharing similar properties.
What do people purchases most online?
People mostly purchase casual and daily usable items online. These items can widely be divided into multiple categories such as fashion, electronics, books, sports, etc.
Launched in 2013, Pepperfry has more than 60 lakh registered users and 1 million+ home products. Pepperfry has changed the way of buying furniture. Indians loved the idea of buying furniture from the comfort of their homes and that is why the company has 7 million+ visits on the website.
Today, if I ask you to buy furniture online, Pepperfry would automatically pop up in your mind. The company have grown rapidly over these years. The company delivers its products in more than 500 cities in India. But, how did the company become so successful? To answer this we need to understand their business model.
Pepperfry is an online marketplace headquartered in Mumbai that deals in furniture and home décor like furnishings, lighting, beds, tables, chairs, cabinets, kitchen appliances, bathing equipment, mattress, and so on.
The founders of Pepperfry are Ambreesh Murthy and Ashish Shah. The tagline of Pepperfry is ‘Happy Furniture to You’.
The company has launched 100+ studios across 57 cities in India In these studios, a wide range of furniture is displayed so people can come and physically see all the furniture. In 2018 Pepperfry tied up with Quikr for a furniture exchange program.
Pepperfry also launched a furniture rental service in September 2018. People can rent furniture and can use it for a period of 6, 9, or 12 months.
Target Audience of Pepperfry
The target audience of Pepperfry is people between the age group of 35-45. The company is also targeting people who are in their mid-20s to early 30s.
Pepperfry follows the omnichannel strategy where they allow their customers to order products anytime, anywhere from any device. The company employs the managed marketplace business model.
They have connected with small and medium-sized business merchants and artisans. These merchants can sell their products through Pepperfry.
The category team meets the sellers to check the quality of products and once approved they take some products from them. These products are sent to the studios for photoshoots.
The photos of the products are then placed on their website. When a product is ordered from the website, it is brought from the sellers and delivered to Pepperfry’s warehouse.
What is Unique about Pepperfry’s Business Model
1) Pepperfry Studios and Franchise Model:
Pepperfry Studios
In India, people have a habit of checking products and services physically. To gain the trust of the people the company launched Pepperfry studios where people can explore all the types of furniture in offline mode. People cannot buy furniture from these studios. Although these stores help consumers make big purchases online.
The interior design professionals that are working in these studios provide free consultations to customers for their home interior needs. About 25% of the business is generated from these studios.
The company has also started a franchise program where small entrepreneurs can own a franchise with Pepperfry and run a profitable business.
The franchise-owned studios work on a 100% price parity and do not require the partner to hold product inventory.
“Omnichannel has always been an integral part of our growth strategy and our existing franchise program has helped us expand our offline footprint by creating several touchpoints across major metros and Tier 2 cities.” added Ashish Shah.
2) Powerful Marketing:
Pepperfry has collaborated with many Influencers and YouTubers. As we all know YouTubers and Influencers have many followers. This helped in brand awareness and people started to buy products from Pepperfry.
During the initial days of Pepperfry, their ad campaigns were focused on getting the audience’s trust. Later on, their ad campaigns shifted to providing specific benefits like looks and design of products.
High-quality images are placed on the website to attract people. The company found out that 65% of the customers are women.
So, to attract them Pepperfry’s team created powerful campaigns that resonated with their target audience. They also provided various discounts which led to an increase in sales.
The revenue model of Pepperfry is straightforward. They earn money by selling products. About 80-85% of Pepperfry’s Revenue is generated by selling furniture in the solid wood furniture category. They have a revenue of Rs 500 crore per annum.
The main reason for high revenue according to Ambreesh Murthy is that the gross margin is as high as 45% while the contribution margin is only 25%. Also, after deducting various costs such as direct cost, logistics, and discounts Pepperfry claims that they earn a contribution margin of 25% – about Rs 2,025.
”Also, the cost of customer acquisition is very low. In fact, we have a high rate of repeat purchases. This has been possible as we sell a range of ancillary products including mattresses, bedsheets, pillows, etc. While a customer may buy a bed once in three years, she does return to the website to purchase related products at least three times a year,” Ambreesh Murthy explained.
Conclusion:
Pepperfry is an inspiration for many startups. Their business and revenue model are simple yet effective. They understood what Indians wanted and designed their business model accordingly. Customer satisfaction is the most important aspect of their success.
FAQ
Is Pepperfry an Indian Company?
Yes, Pepperfry is an Indian Company started by Ambreesh Murthy and Ashish Shah in 2013.
What is Pepperfry Studios?
In these studios, people can come and see all the furniture. The furniture is not for sale but people can check the product quality and design. Once they are satisfied they can order the furniture online.
What is Pepperfry?
Pepperfry is an online marketplace headquartered in Mumbai that deals in furniture and home décor.
What is the revenue model of Pepperfry?
The revenue model of Pepperfry is straightforward. They earn money by selling furniture products. About 80-85% of Pepperfry’s revenue is generated by selling furniture in the solid wood furniture category.
How many products does Pepperfry have?
Pepperfry has 1 million+ home products ranging from beds, tables, chairs, cabinets, kitchen appliances, bathing equipment, mattress, furnishings, lighting, and so on.
Thinking about renovating your home? Isn’t IKEA the first name that pops up in your head when you think about shopping for furniture?
In recent times, IKEA has become the go-to option for young and old alike to shop for good quality, durable and affordable home décor pieces. ‘Affordable’ is the keyword here.
Have you ever thought, how has IKEA been able to lower the costs of its products The brand has made a niche for itself in selling high-end beds, sofas, dining sets and wardrobes at half the price of its competitors, but how does it manage the same?. Well, here’s your answer.
There are quite a few methods that IKEA follows to keep its prices low while maintaining the quality of its products. Let’s take a look at these methods.
IKEA first decides on the price range for a particular product before starting to design the same. Where almost all competitor brands go by the book and follow the conventional process of choosing a design theme, making a storyboard, procuring the materials, putting together the design and then pricing the item according to the cost incurred, IKEA does the exact opposite.
IKEA’s Flat Packaging Innovation
IKEA’s founder, Ingvar Kamprad, introduced a new selling system in the year 1956, which he termed ‘flat-packaging‘. This flat-packing selling technique has now become IKEA’s identity. So, what exactly is flat-packaging? It is a selling system where IKEA sells parts of furniture instead of selling the whole product together.
This allows the products to be packed in flat pieces, facilitating easier transport to stores. It also gives customers the option of choosing customized pieces for their use according to their convenience. Thus, IKEA manages to maintain the low price of its products.
IKEA Flat Packaging
Bulk Production
IKEA produces all their furniture in bulk. This is something that they have agreed to time and again. Be it dining tables, chairs, sofas, wardrobes, beds, showcase or anything else, they produce a good number of all designs. Therefore, they are offered discounts on the bulk purchase of raw material as well as making costs. This is how the bulk production method allows IKEA to maintain a low price strategy.
Unique Construction Technique
If you ever have the time to go through IKEA’s website, you will come to a part that describes their construction methods. They are always innovating new techniques and methods to maintain their low selling price while making sure that their customers have no complaints about the quality of the products.
On the website, it is explained how IKEA uses the technique of constructing their furniture by layering sheets of wood over a honeycomb base structure. Since the honeycomb core requires less wood, it costs less money for production. Thus, IKEA is able to maintain a low cost of products without compromising on quality.
IKEA’s Self Help Stores
IKEA believes in promoting independent shopping. What is independent shopping? It is nothing but allowing customers to shop on their own. Thus, IKEA does not hire a lot of store staff. This helps them to cut costs towards wages and provide customers with lesser priced products.
IKEA Store
In order to allow customers to shop independently, they also print all the product details, cautions, installation processes, etc. on the price tags. Hence, customers can easily read the guidelines on the price tag and choose the furniture they want to buy without any external help.
Take it home Policy
IKEA has a policy where the customers can carry their buys home by themselves on the same day. Although, it is a tad bit inconvenient this policy does come with its own set of contributions towards the low price strategy.
IKEA Take it Home Today Policy
Since customers can carry their own products, they do not need to pay the delivery charges to IKEA or pay higher product prices that may be used to facilitate free delivery. This reduces a lot of overhead costs on the making charges.
A Pioneer In Do it Yourself
If you have ever shopped at IKEA, you know pretty well that you must be adept at assembling and installing the furniture yourself. The company promotes a DIY environment, where it allows customers to install their own furniture. The DIY model of IKEA stands for Do it yourself.
IKEA Do It Yourself
They provide guidebooks and assembly charts to support customers in installing their own furniture. Thus, the company does not need to pay any extra charges to internal or external teams for installation, thereby, maintaining their low price.
In the recent past IKEA has understood that the DIY method can become a hassle for some customers, so, they acquired TaskRabbit, an external furniture installation support company. Therefore, customers have the option of hiring executives at TaskRabbit for assembling their furniture at lower costs.
IKEA TaskRabbit
Conclusion
With so many unique features and methods, IKEA has become a front-running strategist in keeping its product pricing low and maintaining its position in the market. The innovation applied in every aspect of the business makes sure that IKEA keeps giving a tough challenge to their competitors in the market, holding the top position when it comes to being one of the best furniture-selling businesses in the world. Now you know where to go the next time you want to furnish your home.
FAQ
Why is IKEA so cheap?
IKEA employs flat packaging, DIY model, and self-help stores which help the brand to keep its prices low and competitive while not compromising on the quality.
What does the DIY model of IKEA stand for?
The DIY model of IKEA stands for Do It Yourself, where it ships the product in flat packaging and the customer has to assemble the furniture by themselves which is one of the major reasons how it manages to keep costs low for consumers.
Is IKEA cheap in India?
IKEA to boost affordability in India has priced Out of the 7,500 products that it sells about 1,000 are priced less than Rs 200 and 500 cost under Rs 100.
Does IKEA sell online in India?
Yes, IKEA does sell online in India.
What does the word IKEA stand for?
IKEA stands for Ingvar Kamprad Elmtaryd Agunnaryd.
The leather industry occupies a place of notability in the economy of most countries. The demand for the leather goods industry has grown with customer demands for new designs and creative fashionable leather products. Due to the huge potential for employment, growth, and exports, the demand for the leather business is growing rapidly. According to IBEF, The Indian leather industry accounts for around 12.93 % of the world’s leather production. The leather industry is spread across different segments namely tanning and finishing, footwear and footwear components, leather garments, leather goods including harness, etc. Leather business ideas can be developed as a profitable venture on a small and medium scale basis as well.
According to the Department for Promotion of Industry and Internal Trade (DPIIT), India’s leather industry has attracted $ 215.21 million in foreign direct investment equity inflows from April 2000 to March 2021.
If the question on your mind is, “Is the leather business profitable?”, here are some facts about the industry to help you decide:
Footwear export accounts for a 45.82%share. India has produced 1.8 billion units and is expected to produce 3 billion units by 2024.
The tanning industry accounts for an annual production of about 3 billion sq. ft.
India is the second-largest exporter of leather garments, third-largest exporter of Saddlery & Harness in the world and 4thlargest exporter of Leather Goods in the world.
The global leather goods market size has reached USD 407.92 billion in 2021. Total leather and leather products exported from India stood at US$ 5.07 billion in 2019-20. India shares 9% of the world’s footwear production.India isthe second-largest footwear producer after China. India is also the second-largest consumer of footwear after China. This article will help you in finding out the most trending leather business opportunities.
Share of Leather Products (2020-21)
Strengths of Indian leather Sector
Own raw material source – About 3 billion sq ft of leather produced annually
Some varieties of goat/calf/sheep skins command premium position
Trained / skilled manpower at competitive wage levels
World-class institutional support for Design & Product Development, HRD and R & D.
Presence of support industries like leather chemicals and finishing auxiliaries
Presence in major markets – Long Europe experience
Strategic location in the Asian landmass
Most Profitable Leather Business Ideas
Leather Watch Band Making
The leather watchband is considered especially as a B2B product. It takes around 45-60 mins to complete each strap depending on the level of expertise and comfort of working with leather. If you care for your leather strap watch carefully, it is likely to last longer and maintain its value.
The main things you will need to start making leather watch bands are :
Leather
Cutting mat
Cutting tool
Cutting edge
Leather punch
Needle
Suitable thread
Watch hardware (buckle and spring bars)
Leather Garment Making
Fashion consumers are becoming more conscious of the environment. Consumers are rapidly aligning towards new designs and innovative leather offerings to ensure they are in sync with challenging fashion trends. Leather manufactures are trying to produce more sustainable products by prohibiting harmful dyes and chemicals.
They prefer the following facilities before starting a leather garment:
Eco-friendly material
Conservative use of resources
Reduced emission pollutants
Greater social commitment
Fair treatment of employees
Leather Bag Making
The leatherback making business can be started with little capital and from home. Once the bag has been completed it is given a coat of mustard seed oil, which helps nourish the leather, helps waterproof it, and further deepens the rich tan color. You can come up with a variety of designs that you can get into manufacturing or retailing.
Basic leatherworking tools and materials are as follows:
Ladies footwear is an essential item in women’s apparel. The variety includes slippers, sandals, sports shoes, high-heels, etc. You can start a ladies’ footwear manufacturing business from home. By finished leather as raw material, any individual can initiate this business on small scale basis.
The first thing you need to start this process is a shoe last. The leather shoe making business is involved in several activities. It is very much important to have adequate knowledge about the process and the current market trend. Today shoe factories handle the various stages of production.
The steps which are involved in shoemaking are below:
Designing
Shoe lasts
Stamping
Sewing
Assembling
Shoe room
Leather Crafts Item Making
India is famous for its leather products and the most profitable leather crafts are manufactured in West Bengal. These products are generally decorated with traditional designs and patterns. The modern-day leather craft in India has become a big industry. Items like shoes, jackets, lampshades, pouches, bags, belts, wallets, stuffed toys, book covers with decoration, ladies’ accessories, hair accessories, wall hanging, clutch or purse, pet collars, key chains, etc. made from leather are exported from India in large quantity. Different regions in India are famous for their unique style and pattern of leather products.
Leather Furniture Making
Leather furniture at a retail store may be out of your price range. With little hard work, you could have custom leather furniture in your home for a fraction of the cost. There are two options for your leather furniture from scratch and reupholstering your existing furniture. Two major segments include this industry. One is the sofa and other furniture or home décor items for domestic purposes. Another is seat or seat covers in the automobile industry. This is an excellent leather business opportunity!
Leather Promotional Product Making
Promotional products are branded with a specific logo that serves the purposes of marketing campaigns. These products are customized for the company especially and have their logo on them. Day by day marketing strategies are improved, the use of promotional products is a new thing now that is expanding rapidly. Some products which are significantly popular in the promotional gift are laptop sleeves, keychains, keyrings, leather portfolios, leather bags, leather briefcases, leather sunglasses cases, leather wallets, leather purses, etc.
Leather is always a stylish choice for designs in jewellery. Jewellery making is another business idea. As leather is already a very pretty popular material in itself and it also makes some awesome jewellery items. Leather jewellery items such as necklaces, bracelets, bangles, earrings, friendship bands, wrapping bracelets, and bangles, etc.
Leather Safety-Shoe Making
Leather is certainly the most important material involved in the production process of safety footwear. Safety shoes are shoes that are made for the safety of the individual that works in extreme conditions.
Types of leather in safety footwear:
Full-grain leather – It is part of the most outer layer of the skin, the most elastic and breathable of all.
Printed leather – It is the middle layer of the skin. It’s very sturdy but less breathable.
Nubuck leather – It is the most outer layer of the skin, slightly brushed and with moderate resistance to scratches and hits.
Suede leather – It is part of the middle layer of the skin. It has the best durability and the least water resistance.
Leather winter wear is the biggest industry. People using leather as jackets is very popular. Various winter wear options are famous in the leather business industry such as jackets, coats, leather high boots, leather pants, etc. Leather gloves have also done significant progress as a business plan. Leather gloves are famous among both men and women and come in different shapes and sizes. There are various types of gloves such as biker gloves for gripping, winter gloves, open finger gloves, closed finger gloves.
Conclusion
The Government of India had identified the Leather Sector as a Focus Sector under the ‘Make in India’ program. The Government is implementing Various Special Focus on Initiatives under the Foreign Trade Policy for the growth of the leather sector. With the past industry performance, the industry’s inherent strengths of skilled manpower, innovative technology, increasing industries, the Indian leather industry increases its production. And if you start this leather business you will get more profit also in the upcoming days the growth in the leather industry will be very much.
We hope this article helped you to get ideas on how to start a leather business in India! Remember, there are several leather-based small scale industries out there too!
Company Profile is an initiative by StartupTalky to publish verified information on different startups and organizations. The content in this post has been approved by ikOOji.
Founded by Karan Singh and Manuraj Singh Johar, ikOOji is a one-stop shop to find premium quality kids’ furniture products. It is delivering happiness not only to the faces of little ones but parents too. Parents can now browse multiple options while sitting at their homeswithout worrying about the design, delivery, durability & installment. As everything is taken care of. Shopping for kid’s furniture can now be easily done just like any other home essentials.
ikOOji is based in Gurugram and entered the industry in July 2020. With the expertise of stalwarts of the furniture manufacturing industry & a strong team of founders, ikOOji has become India’s favorite kids’ furniture brand in less than 1 Year of operations.
StartupTalky interviewed Mr. Karan Singh, Founder of ikOOji to know the Startup Story and the roadmap of the organization. He also gave insights on the business model of ikOOji, how it started, funding, challenges faced, competitors & more. In short, know the Journey of ikOOji since its inception to date!
ikOOji is a one-stop-shop to find premium quality kids’ furniture products that will run for ages and will be loved by the kids endlessly. The mix-match of fun and functionality with dreamy aesthetics contributes to making the best range of furniture products that not only makes the space vibrant but makes the first experiences of the littles ones, a magical one!
ikOOji comes from the term Ikuji, which in Japanese means “Childcare”. The meaning matches with the core values of the organization i.e., to leave no corners unturned for excellent childcare through high quality and sustainable furniture for kids of all ages.
“Crafting furniture that connects with the heart of our little ones is what we always focus on. The direct approach and objective have resulted in making us a brand of the kids, for the kids, by the kids within a year of operations” says Karan Singh, Founder, ikOOji
Without a fail, ikOOji is delivering happiness not only to the faces of little ones but parents too. Now parents have a place to shop for furniture for their kids. Before ikOOji, there wasn’t a reliable place to shop. Either you have to wander around places or spent hours with the carpenter to make it done. On the other hand, this pandemic wouldn’t spare so much time outdoors. But after ikOOji, parents can now browse multiple options while sitting at their homes without worrying about the design, delivery, durability & installment. As everything is taken care of. Shopping for kid’s furniture can now be easily done just like any other home essentials.
Within one year of operations, ikOOji has become the leading and trusted Indian kids’ furniture online store. With this same energy and dedication, the company is visioning to be one of the topmost online kid’s furniture stores in the future.
The target audience of the Metropolitan cities is in majority especially the young parents ranging from 28-40 years of age who are always seeking for transforming and recreating creative vibrant spaces for their kids.
Stats for kids’ furniture as per the industry estimates concluded that the offline market is hitting across 10% to 15% of growth on yearly basis, whereas the online market is growing at 300% year on year.
85% of the market is unorganized and there is immense scope for growth and penetration.
Famous marketplaces like Amazon, Flipkart, and Pepperfry are launching more brands and categories on a monthly basis and getting a great response. So definitely the scope for kids’ furniture is definitely way more than our imagination.
[Source – Business Standard, MoneyControl]
Competitors’ Analysis
Slowly the online marketplaces like Amazon, Flipkart, and Pepperfry are shifting their priorities on kids’ furniture by launching a variety of options for young parents. New budding competitors have been observed but their prime audience is new parents targeting nursery furniture like cribs, diaper-changing stations & more.
5% YoY growth In the organized Kids Furniture segment since ’15 with Pepperfry projecting 500 Cr in ‘21 through Kids segment. Market share is expected to grow to 24% for organized offline retail and 14% for online retail by the year 2025. ikOOji is a growing online furniture store that offers high-quality and sustainable furniture for kids of all ages. Serving vibrant and creative options of furniture loved by juniors. Focusing on building happy spaces for kids. This sets ikOOji apart from others.
It’s never easy to set up a business or organization. People have to cross the hurdles or roadblocks in their journey. Just like that ikOOji’s founders too faced many. The setup was planned to be launched in July 2020 but the pandemic happened. Everything was closed worldwide, they were really confused about how to begin with their journey. Even the small task like buying the raw material, arranging the labor or setting up the processes was a challenge now. Amidst July, they realized that for them nothing would be easy. So only the key mantra of patience and consistency will make it work.
Slowly and steadily, they started again with the same passion and motivation and started selling the furniture on marketplaces. Surprisingly they received a good response and parents were loving the furniture. This pushed them on rolling out the new collection. Selling on marketplaces acted like a blessing and the positive response acted in channelizing new energies in them. Because of this, today ikOOji proudly owns more than 500+ SKU.
Over the period of time, the daily consistency & efforts from the team resulted in switching the buyers to the website and the majority of them are now preferring to buy from the website only. ikOOji is based in Gurugram and entered the industry in July 2020. With the expertise of stalwarts of the furniture manufacturing industry & a strong team of founders, ikOOji has become India’s favorite kids’ furniture brand in less than 1 Year of operations.
The Eureka Moment
Both the founders Manuraj Singh Johar and Karan Singh are college friends and have worked together for years. Being new parents themselves, they were discussing their parenting journey and surprisingly realized that both of them faced trouble in finding one reliable cradle in the market.
This thought rang the bell in their minds that just like them how difficult it is for other parents too. They researched about it and realized that there is a gap in the Indian market for kids’ furniture. This eventually gave birth to “the idea of ikOOji”.
ikOOji was started in July 2020 amidst the pandemic. The initial months were not easy. The problems faced in the initial months were already calculated by the founders but the new problems because of lockdown weren’t predicted. But slowly and steadily they worked it around in their favor. As the situation outside made it impossible for the new parents to shop furniture offline so they gave ikOOji a chance which resulted in wonders.
“We were selling our products in marketplaces first but later people recognized ikOOji and they shifted to the website. This whole process resulted in making ikOOji as a leading Indian brand in a year” Karan added.
ikOOji even managed to get its first funding from Aakanksha Bhargava, the successful entrepreneur leading a larger relocation business in India. The CEO of PM Relocation which offers global mobility services across the world operating on both B2C and B2B models with a clientele of over 500 MNC’s.
She is now the Director & Advisor of the team. Being a mother herself, she is able to bring trusted and resourceful inputs to the direction. Even delivering all across India has now become easy. ikOOji is now successfully operating the D2C (Direct To Customer) model.
In the lockdown days, ikOOji has been really appreciated by the parents as they were able to shop premium quality furniture for kids at the ease without any troubles. Despite the lockdown, ikOOji has been regular in delivering furniture all over India.
Here at ikOOji, the team believes in spreading smiles and creating lasting memories with kids’ furniture. Keeping little ones happy is its top concern, so they always stay updated with their rising expectations and likeness, in order to maintain kid-friendly aesthetic furniture. Creating a base of functionality and layering it with admiring designs which are just as magical as the imagination of the little ones.
We are a brand for the kids, by the kids, of the kids. This approach sets ikOOji apart from others.
All of ikOOji’s designs are approved by podology experts. The collection changes every season. Amending all the new requirements and high-quality functionality, ikOOji launches its new collection. To date, the company has been successfully serving more than 500+ SKU to clients.
ikOOji – Founders and Team
Manuraj Singh Johar and Karan Singh are the founders of ikOOji.
Karan Singh | Founder, ikOOji
Karan Singh – Founder, ikOOji
15 years of designing and marketing experience across sectors including travel, consumer products, & FMCG.
Manuraj Singh Johar | Co-founder, ikOOji
Manuraj Singh Johar – Co-founder, ikOOji
17 years of experience in Product Development, Consumer Businesses, Hospitality & Tourism.
Aakanksha Bhargava | Director & Advisor, ikOOji
Aakanksha Bhargava – Director & Advisor, ikOOji
The CEO of PM Relocations which offers global mobility services across the world operating on both B2C and B2B models with a clientele of over 500 MNC’s.
ikOOji – Name, Tagline and Logo
ikOOji comes from the term Ikuji, which in Japanese means “Childcare”. The meaning matches with the core values of the organization i.e., to leave no corners unturned for excellent childcare through high quality and sustainable furniture for kids of all ages.
‘Brand For The Kids, By The Kids, Of The Kids’
ikOOji Logo
ikOOji – Business Model and Revenue Model
Having 10,00 sqft of the area where all the labor, craftsmen, and designers work in crafting premium wooden quality kids’ furniture. ikOOji delivers across India. After getting its first funding from Aakanksha Bhargava, ikOOji serves a D2C model. So parents all across India can now shop superior quality furniture for their kids just sitting in their houses without worrying about quality, durability & delivery.
ikOOji has stepped into the market with an initiative to bridge the gap in the market for kid’s furniture. Along with the coming years, it has a strong belief to be successful in doing that.
ikOOji’s prime audience is young parents with kids aged 0- 16 living in the metropolitan cities of India. Tier 1 and Tier 2 are whom it is targeting. All the evolving parents who believe in creating unique spaces for their kids will be its potential customers.
Initially, when Karan & Manuraj started ikOOji, word of mouth advertising made the brand popular amongst their small social circle consisting of family and friends. Then they started social accounts of ikOOji on Instagram and Facebook and that eventually help in calling for its first customers.
“The majority of sales increased when they signed up for online marketplaces.We actually received a good no. of response and the audience actually started recognizing ikOOji as a brand. This profit shifted us in building on own website and staying active on all our social media channels” says Karan Singh, Founder, ikOOji.
Soon, the audience shifted to its main website and now ikOOji is a full-grown online Indian furniture store in the market.
ikOOji – Competitors
ikOOji’s competitors include Ikea kids, Alex Daisy, Mollycuddle, Urban Ladder, Habios, and Rabitat.
ikOOji – Recognition and Achievements
ikOOji received funding within a year of operations and welcomed on board- Aakanksha Bhargava, the successful entrepreneur leading a larger relocation business in India. The CEO of PM Relocation which offers global mobility services across the world operating on both B2C and B2B models with a clientele of over 500 MNC’s.
ikOOji is a one-stop-shop to find premium quality kids’ furniture products that will run for ages and will be loved by the kids endlessly.
Who founded ikOOji?
Karan Singh and Manuraj Singh Johar are the founders of ikOOji.
What is the business model of ikOOji?
ikOOji operates on the D2C (Direct To Customer) model.
Who are the competitors of ikOOji?
ikOOji’s competitors include Ikea kids, Alex Daisy, Mollycuddle, Urban Ladder, Habios, and Rabitat.
What does ‘ikOOji’ mean?
ikOOji comes from the term Ikuji, which in Japanese means “Childcare”. The meaning matches with the core values of the organization i.e., to leave no corners unturned for excellent childcare through high quality and sustainable furniture for kids of all ages.
Chayanika Goswami
