Hafele, a German furniture fittings and kitchen appliances player in India, plans to increase local sourcing to 50 per cent in the next four years and expects India to be its top market globally by 2030, said its South Asia Managing Director Frank Schloeder.
The company said it is encouraged by the opportunities emerging from the growing middle class, which is spending on customised solutions for a better-looking wardrobe to interior solutions and modular kitchens.
Hafele, which also operates in the lighting & electrical segment, said it is also looking at opportunities emerging from the tier II & III markets, besides the metro markets, where the trend of a good home interior and premiumisation is picking up.
Over manufacturing in India, Schloeder said with a supportive government policy and new Quality Control Order norms from the Bureau of Indian Standards (BIS), India would be able to build a qualitative supply chain, which will help Hafele to “stick to the promise of German quality mindset” for its customers.
“Today, less than 10 per cent (sourcing) is coming from India. By the end of next year, we will probably be not far from 30 per cent and in a few years from now, the majority of the supply chain will come from India, probably more than 50 per cent in three, four years from now,” Schloeder told PTI.
Hafele is currently importing products from Europe, China and other markets.
“Now there is a big switch, also due to BIS to relocate supply chain,” he said adding “That is how committed we are for the Indian market”. Moreover, BIS also supports the establishment of a qualitative supplier landscape in the country.
BIS has made certification of manufacturers’ factories, including component makers, compulsory.
“We need a supplier ecosystem to be able to work with them, who fulfil international standards, who can go through any audit that we do across the world. And therefore BIS is a very welcome measure, because it will increase the overall professionalism of the supplier landscape in India, and it will allow Indian suppliers to become world-class by delivering products,” Schloeder added.
Hafele, which has been operating in India for the last 20 years, has doubled its revenue in the last five years to Rs 1,200 crore. It expects to continue the same double-digit growth journey in the Indian market.
The company gets 25 per cent of its B2B business from its partners, and the rest 75 per cent from B2C from directly selling through its distributors and retailers. It has a network of around 15,000 dealers across the country and works with 180 distributors.
India is the third biggest market for Hafele globally after Germany and the US, which it entered 20 years before. The company is a leading interior solution provider in India and has also expanded to the appliance segment becoming a lifestyle and consumer brand.
“We are very happy to be in India. It’s a big market for us. It has been, already a big success story. And we think that the next 10-20 years will be again a big opportunity because the rising middle class wants to have beautiful homes with a nice kitchen, nice wardrobes, and interior solutions,” said Schloeder.
There are still a lot of growth opportunities in India, and Hafele is perfectly in the “right position” to service its customers and continue driving that business to the next level, he added. “And if we do it well, I think we can easily become the biggest market in the heffler organization by 2030, if not earlier, because of the huge potential that India still has to offer,” said Schloeder. Courtesy: https://www.theweek.in/wire-updates/business/2024/11/20/dcm39-biz-hafele-growth.html