Home Textiles:

The Next Big

Opportunity
FOR PROF. Sibichand Mathew
 Submitted by:

Anjali Chhabra

Ayushi kanoi

Mini Bhandari

Justine

Contents

Abstract

Research Design and Methodology

a. Objective of Research
b. Sub Objective
c. Research methodology
Limitations of research

Indian textile industry-an introduction

World home textile industry

a. India
b. China
c. UK
d. US
e. France
Future projections

Glossary
Bibliography

ABSTRACT

The Textile industry is one of the most important industries in world trade.
India occupies the third position in terms of textile trade in the world
signifying the importance of this industry for India.

The Home furnishing Textile industry, after apparels is being seen as the
next being opportunity for trade. The impetus to this industry is mainly
provided by changing consumer lifestyle trends.

This report provides an overview of the world textile industry with key focus
on India.

It provides a detailed analysis of the following:-

• Size and Growth of the Indian textile industry and its product
components
• Home furnishing market divisions
• A consumer survey to determine the trend in this industry
• The key brands in the market and their retail formats
• International market: scenario
• Projections for the future
OBJECTIVE

To study scenario of home furnishing industry and identify trends and

prospects of the same.

RESEARCH METHODOLOGY

• Literature research (secondary research)

Journals and Magazines

Internet Search

Other Published data

Limitation of research

• Only secondary research has been carried out.

• Category wise analysis is not available.

• Data Spans the post MFA period from 2005 onwards.

INDIAN TEXTILE INDUSTRY-AN INTRODUCTION

In the post-quota regime, the Indian textile industry is poised to

become a major player in the US $395 billion global textile and
clothing market. With the global retailing industry exploring
opportunities for outsourcing, Indian exports are expected to surge
from the current levels of $14 billion to $50 billion by 2010 and its
share of the global textile trade is expected to double from 3.5 per
cent currently over the next five years.

The dismantling of the quota regime has brought the entire market at an
interesting stage with players like China and India beginning to make their
presence felt. On 1 Jaunary 2005, the WTO Agreement on Textiles and
Clothing (ATC) came into operation replacing the earlier Multi-Fibre
Agreement (MFA). The phasing out of the MFA is triggering off exponential
growth.(In the first quarter of 2005, India's textile exports to the US has
risen by an estimated 22 per cent.)

The textile sector contributes about 14% to industrial production, 4% to

GDP and around 17% to total export earning.

Textile Sector in the Post-MFA Regime

2004 2010 (estimated)

Global Textile Trade $395 billion $600 billion
China's Exports $97 billion $220 billion
India's exports $14 billion $50 billion
The key advantages of the Indian textile industry are:

• India is the third largest producer of cotton with the largest area
under cotton cultivation in the world. It has an edge in low cost cotton
sourcing compared to other countries.

• A key driver of global textile trade is also low cost sourcing of textiles
and clothing.

• Average wage rates in India are 50-60 per cent lower than that
in developed countries, thus enabling India to benefit from global
outsourcing trends in labour intensive businesses such as garments
and home textiles.

• Design and fashion capabilities are key strengths that will enable
Indian players to strengthen their relationships with global retailers
and score over their Chinese competitors.

• Production facilities are available across the textile value chain,

from spinning to garments manufacturing. The industry is investing in
technology and increasing its capacities which should prove a major
asset in the years to come.

• Large Indian players such as Arvind Mills, Welspun India, Alok

Industries and Raymonds have established themselves as 'quality
producers' in the global market. This recognition would further enable
India to leverage its position among global retailers.
• India has gathered experience in terms of working with global
brands and this should benefit Indian vendors.

THE WORLD HOME TEXTILE INDUSTRY

• China holds a commanding lead in exports of bed linen to Japan, with

a 95% share on both a value and volume basis.
• Other exporters of bed linen to Japan include the United States, India,
and Spain.
• The global home textiles market, estimated at US $ 70 billion offers
tremendous opportunities for Indian players.
• The US and EU imports nearly $30 billion worth of home textiles.
• The US market is growing at 5 per cent per year while the EU market
is growing at an estimated rate of 9-10 per cent.
• Japan, Australia, New Zealand are also large consumers of home
textiles.
• The global trade in home textiles will grow from $8.6 billion to $23
billion in 2010.
• India's presence in the US home textile market is growing. India is
the largest supplier of terry towels, bed linen and second largest
vendor of cotton made-ups to the US markets.
• China, Pakistan, Bangladesh and Vietnam are major competitors for
India in this segment.
• Another segment in which India is a strong player is the embroidery
market.
 • The Indian market for embroidery is valued at Rs 7.5 billion and is
growing at 18 per cent per year.
• This is a highly fragmented market with the organized sector
constituting 40 per cent of the industry.
• Demand for embroidery is on the rise and export to countries like the
US, UK, Africa, Middle East offers a huge market for embroidery
products.
• Export of carpets is a segment in which India has excelled. Exports of
carpets have increased from USD 654.32 Million in 2004-05 to USD
930.69 million in 2006-07 showing a growth rate of 42.23% during
April to October 2007, carpet exports totalled USD 404.74 million. This
makes India the world leader in exports with 30% global market
share.

THE INDIAN HOME TEXTILE INDUSTRY

What are home textiles?

To understand the meaning of home textiles, it is necessary to understand

the concept of technical textiles. The textiles that are not produced for
decorative purposes, but with certain specific intentions are called technical
textiles. Technical textiles include:
 • Geo textiles
• Home textiles
• Agro textiles
• Industrial textiles
• Medical textiles
• Mobile textiles
• Packing textiles
• Sports textiles
• Protective textiles
• Building textiles
• Smart or interactive textiles

Home textile is a rather important part of technical textiles. Home textile is

that part of technical textiles that help a person in adding his own
personalized touch to his home; in other words, they convert a house into a
home. They refer to the textiles that are used in a home, including curtains,
shower curtains, bedspreads and pillow covers, upholstery, aprons as well as
wall papers.

The Indian textile industry -- garment and home furnishing -- is one of the
largest and most important sectors in the economy in terms of output,
foreign exchange earnings and employment in India.

Rapid growth is projected for this industry at the rate of 14% with the
market size increasing from Rs. 530 Crores (2007) to Rs 1000 Crores.

Home textile exports are projected to increase by more than 400% by 2010.

Investments in Home Textiles is projected to increase to USD $ 7 Bn by

2010.

The country commands a natural competitive advantage in terms of a strong

and large multi-fibre base, abundant cheap skilled labour and presence
across the entire value chain of the industry ranging from spinning, weaving
and made-ups to manufacturers of garments.

India's textile industry comprises mostly small-scale, non-integrated

spinning, weaving, finishing and apparel-making enterprises.
The robust fascination for household textiles still continues to grow in these
times, reflecting the wide attention by shoppers to their domestic
environment and a renewed desire to make homes more welcoming.

Creative application of textiles appears to be a new area in the home

furnishing front but it is actually a tradition that goes back through time and
may, in fact, be the earliest art form.

Before the arrival of spinning machines, power looms and synthetic dyes,
textiles were very expensive to produce. The fact that they were highly
valued, preserved and collected is shown by their inclusion in household
inventories. Particularly, highly prized were fabrics brought from distant
places and they were regarded as heritage of the future.

Textile industry has re-invented itself recently in the household fabrics

market. Despite a general fall in worldwide textile exports, household textile
products such as linen and furnishing offerings are holding up well and
recording increased consumption patterns over its previous years. Home
Textiles industry has become rich both in terms of size and the product
varieties.

The roots of Indian home furnishings industry lie deep in age old traditions.
Especially known for their ethnic, intricate carvings, weaves, pattern themes,
motifs, color schemes and workmanship, Indian home furnishings have
become popular the world across. Handcrafted ethnic home furnishings are
one of the most fascinating art forms in India and lend an unmistakable
grandeur to the decor.

The Categories

• A fast emerging economy in the world of home textiles, India produces

a wide range of products, including home furnishings, household linen,
curtain tapestry and yardage made with several textures and varying
thickness.

• The home furnishing industry mainly exports fabrics, bed linen, table
linen, toilet and kitchen linen, towels, cushions, curtains, pads,
tapestries and upholstery's, carpets and floor coverings, etc. The
industry has adopted several measures and techniques to offer
premium quality and eco-friendly products to the global industry.
• The home furnishing products can be broadly categorized into
five categories, which include –

o Bedding or bed linen and spreads,

o window dressings,
o bathroom textiles,
o kitchen linen
o Table linen
o cushions and covers,
o carpets and floor covering
o and table linen.

• Household penetration levels are high, especially in the largest

sectors — bedding and window dressings.

• While replacement due to wear and tear is not inevitably frequent, an

increased consumer interest in home interior products has stimulated
buying in what is now very much a fashion-led industry.

• The industry also benefits from the growing number of households, a

trend, which is expected to continue at an even faster rate.
CHOOSING THE RIGHT EXPORT PRODUCT
Production Centres

Though the production of cotton,home furnishing is spread all over the

country,its concentration is in the following areas:

Andhara Pradesh: it is famous for block printed and made ups,bed spreads
and house hold textiles

Assam: it produces 90% of country’s Eri silk and 100% of Muga silk

Bihar: It produces Tasar and finer cotton Muslin

Bhavani: Carpets,bedsheets,and furnishings

Gujarat: It is popular for its block printed fabrics and made up, Tinsel
printing fabrics, Tie n dye materials, Mashru fabric and embroidered fabrics

Haryana: It is famous for cotton furnishings, waste cotton furnishings,

bedspread, durries, towels and woolen items.

Panipat: floor coverings, dabble cloth, bed sheets and

covers,furnishings,household linens jacquard furnishings-thick twill bed
spreads in cotton using handspun yarns blends-durries, made-up items
towels and toweling ,casement

Rohtak: heavy materials like casement, bed sheets/covers, towels

Jammu &Kashmir: It is famous for woolen carpets and durries, silk items,
crewel embroidered fabrics and made ups.

Karnataka: It is not only famous for silk, raw silk, and silk good but also
famous for cotton and cotton textiles.

Kerala: It is popular for its blended fabrics and made ups and also for
towels, bath mats, table &kitchen linen

Madhya Pradesh: It is known for its block printed fabrics and made-ups,
tinsel printed fabrics, fine muslins, cotton saris with silk borders

Maharashtra: It is known for cotton textiles, block printed fabrics and tinsel
printed fabrics.
Orrissa: It produces fine cotton textiles, Tassar silk items and Batik printed
fabrics

Jaipur:

Manufacturing Centers Products

Bikaner Blended fabrics,blankets and
durries
Chitagarh Blended fabrics
Sanganer Prints in indegeneous colours
Jaisalmer Blended fabrics
Kota Kota fabrics,muslin fabrics
Udaipur Tie n dye,

Punjab: It has highest number of woolen mills and produces woollen items
and phulkari embroidery

Pondicherry: good quality woven fabrics

Rajasthan: Kota and block printed fabrics

Tamil Nadu: bed spreads, towels, household textile furnishings, block

printed and made up

Chennimala: bed sheets, furnishings, towels, matty cloth

Karur: Turkish towels, casements, upholsteries

U.P. Chikankarand Etawah for home furnishings

West Bengal: finer cotton muslins, block printed fabrics, Kantha

embroidery.75% of jute comes from west Bengal.
 APPAREL VIS-À-VIS HOME TEXTILES

The product profile of domestic textile players needs to be understood in

relative terms with that of players in the lead competing nations. What
differentiates the Indian textile industry from its low cost peers (namely
China, Pakistan and Bangladesh) in the highly competitive post quota era is
the relatively de-risked business models.

While players in the apparel business have upgraded their product mix to
meet customised demand of apparel exporters and developed made ups
from fabrics, the home textile players enjoy a distinct advantage
against their peers in the neighbouring countries in terms of being
‘first-movers’.
 HOME TEXTILES EXPORT: AN OVERVIEW

India, a leading global player in the home textile space, is poised to

strengthen its position with an over three fold jump expected in exports by
2010, global financial services major Citigroup said.

Country's home textile exports are forecasted to rise to $10 billion

by 2010 from $3 billion in 2005, on the back of self-sufficiency in cotton
and recent acquisitions and tie-ups with global brands, Citigroup Global
Market India said in its equity research report.

Despite prospects of excess capacity and cost pressures amidst cut-throat

competition, bed linen exports to the US by three Asian countries - China,
India and Pakistan -- continue to dominate with a 76 per cent share
of the total.

The US and European Union together accounted for 70 per cent of

the world's $70 billion imports for home textiles. The US alone
imports bed linen worth $24 billion, the Citigroup report said.
The home textile sector is set to grow due to the high growth drivers like
focus on value addition through

• innovative designing,
• strategic partnerships with global brands and
• better supply chain management

Key trends in the post-quota regime have helped the Asian trio to increase
their share as global retailers stepped up outsourcing to cut costs.

Growth in Asian nations would be triggered through consolidation and

rationalization of outsourcing countries and vendors.

While competition is relatively lower in the domestic apparel fabric market

(due to high degree of sophistication required in designing and finishing),
the market for export of home textile is very favourable for Indian
players, with most of the European companies having gone into
bankruptcy.

Home textile capacities in the EU and the US are shrinking due to the lack of
competitiveness. This downscaling, and the dismantling of quotas, is likely to
create additional markets estimated at US$ 1.3 bn in towels and US$ 1.8 bn
in bed linen for the rest of the world. With outsourcing now becoming the
norm amongst global textile retailers, and the EU and US imposing export
limits on China, Indian home textile industry stands to benefit.

Moreover, global retailers are looking at reducing their dependence

on a single country for supply. Given Indian companies' strong brand
equity in the US home textile market, organised players in this segment
have lots to look forward to.

Also, while the apparel segment enjoys higher margins (as compared to
home textiles), the home textile division is a hedge against changing
fashion trends in the apparel segment. The two business models thus,
offer diversification in terms of products, customers, fashion cycles and
currency risks.
Geared with expanded capacities...

Indian home-textile companies have expanded rapidly across the value chain
to take advantage of the emerging growth opportunities. The bulk of the
capacity expansion has been commissioned over the past three fiscals with
the help of low cost funding through the TUF (textile upgradation
fund) route. The expanded capacities have not only enabled the players in
this segment to meet bulk orders but also customise their products as per
the demand.

Progress in TUFS since inception…

Applications received Applications sanctioned
sanctions/
Rs bn No. of appli. Project cost Loan amt. No. of appli. Project cost Loan amt. approvals
FY00 407 57.7 30.8 309 60.5 24.2 78.6%
FY01 719 63.0 38.8 616 52.3 20.9 53.9%
FY02 472 19.0 10.8 444 15.7 6.3 58.2%
FY03 494 18.4 10.3 456 14.3 8.4 81.6%
FY04 867 33.6 19.1 884 32.9 13.4 70.2%
FY05 986 79.4 35.3 986 73.5 29.9 84.7%
9mFY06 798 59.8 50.1 804 56.0 22.1 44.1%
As at Dec'05 4,743 330.8 195.2 4,499 305.2 125.2 64.1%

Source: Ministry of Textiles

Value addition - route to higher price realisations…

India is the largest supplier of terry towels (with 21% market share) and the
third largest supplier of bed linens (with 19% market share) to the US.

India's thrust on value addition, which was earlier an attempt to

differentiate itself from China, which focuses on volumes and lower prices,
has stood in good stead. Indian home textile companies have strived to offer
better value-added products, such as higher thread count bed linen,
innovative varieties in terry towels and a wider product range in decorative
bed-sets. This approach has yielded them higher realisations and
better profit margins compared to that of regional peers.

Also, while the lifting of the quotas lowered price realisations across most
countries in the South East Asian region, the impact on Indian companies
was subdued, thanks to their customised product offerings. In fact, India is
one of the few destinations where product prices were impacted only
marginally in the post quota regime.

Not just the dragon threat!

China responded to the dismantling of the quota system with a surge in

textile exports that led to a shake-up in the US market. The US, therefore,
re-imposed quotas on terry towels from China, which augured well for India.
Further, this prompted global retailing giants to diversify their outsourcing
strategy.
Export of pillow cases to US
US$ m 2003 2005 CAGR
Pakistan 12,827 69,345 133%
China 15,462 58,321 94%
India 27,188 47,375 32%
Turkey 6,754 11,734 32%
Israel 7,672 8,219 4%
Source: Office of textiles and apparels (US)

Nonetheless, what should worry the Indian home textile companies

is the fact that competition in this segment is also brewing and
neighbouring countries such as Pakistan and Bangladesh are
catching up faster.

To put things into perspective, the export of pillowcases to the US from

Pakistan grew 4 times faster than India in the last 3 years (see
adjacent table). This is also because Pakistan enjoyed a preferential entry
into the US and EU markets during the quota regime and has the advantage
of being one of the largest cotton producers in the world. Further, the
Pakistan government is encouraging the industry with a 6% R&D subsidy.
Countries like Turkey and Bangladesh are also giving India a tough fight in
the lower value home textile segment.

The home textile segment is well leveraged to drive the growth in the
domestic textile industry. Besides export opportunities, longer fabric cycles
(as compared to the apparel cycles) and fewer design variations make the
business better hedged as compared to the apparel business.

It only remains to be seen whether the organised players in this segment

can timely exploit the latent opportunities or lag behind their regional peers.

Category Wise Export Analysis

With their ethnic, intricate carvings, weaves, pattern themes, motifs, color
schemes and workmanship, Indian home furnishing products are gaining
immense popularity among buyers the world across.

The share of Indian exports in home textiles is increasing day by day. In

2002-03, the value of export of cotton handloom fabrics and made-ups was
Rs. 544 crore, the value of export of handmade carpet and other floor
coverings was of the order of Rs. 2590.26 crore and value of exports of
other home furnishing products was Rs. 2633.37 crore.

Trend in value of export of cotton handloom fabrics and made-ups (1998-89-

2002-03) (Rs in Crores)

Made- Total
Year Fabric Total
Ups (Value)
 1998-
503.581414.76 1918.34456
99
1999-
488.481491.57 1980.05447
00
2000-
489.631637.82 2127.45466
01
2001-
496.471568.47 2064.94433
02
2002-
842.941790.33 2633.27544
03

Made-Ups (Value in Rs. Crores)

Bed Linen 3.34 5.57 6.28 20.14 39.51
Table Linen 9.91 8.19 30.79 36.49 47.19
Toilet &
Kitchen 6.6 8.89 36.79 36.49 43.57
Linen
Bed Covers
/ Bed200.07 204.11 211.93 211.01 173.67
Spreads
Curtains 65.43 79.02 104.04 106.39 116.37
Other
Furnishing 752.91 764.24 830.1 761.22 940.71
Articles
Clothing
24.85 33.36 57.31 53.97 65.61
Accessories
Other
31.88 34.74 62.97 82.12 102.68
Made-Ups
Carpet &
Floor 319.75 353.44 298.31 242.83 261.02
Coverings
Made-Ups
1414.761491.561637.821568.471790.33
Total
Grand
1918.341980.042127.44 2064.942633.27
Total

Export Trends of Handmade Carpets and Other Floor Coverings

(1998-99 to 2002-03) in Rupees Crores
 Export Performance of Carpets and
Year
Other Floor Coverings
1998-
1783.33 136.45 94.16 2013.94
99
1999-
1888.45 153.93 93.65 2136.03
00
2000-
2045.96 167.03 102.16 2315.15
01
2001-
2152.69 198.27 85.17 2436.13
02
2002-
2293.79 209.42 87.05 2590.26
03

HOME FURNINSHING- MARKET DIVISIONS

Home Furnishings Market

 Urban home textiles market is estimated to be Rs 9,300 Crores and

expected to grow to Rs 20,000 Crores by 2012. Only 6% of the market
is organized.

 Bed and Bath constitute about two thirds of the market.

Home Furnishing Market Size Breakup-2007

Growth Drivers

• Demographic inversion-Average age of an Indian homeowner

has fallen to 27 from 40 years in the last decade

• Housing boom – An estimated 2.5 Mn new homes are required every

Year

• Increase in re-location of people for professional & other reasons

• Growth of nuclear family set up leading to shift in preference of home

Decoration

• Increase in Urbanization and changing fashion Concepts

• Increase in number of working women, hence change in the outlook

and tastes as also emergence of dual income households

Home Furnishings Retail Market Structure

 Specialty Retailers Would Remain Dominant in Home Furnishing
Segment. Hypermarkets are expected to gain a significant share of the
home furnishings market though organized specialty formats would
also gain market share
 Retailers like Maspar, Bombay Dyeing, Welspun, Atmosphere etc. are
slowly organizing the home textiles retail business especially in the
metro and mini metro cities.

 Unorganized players are mostly in small size stores (<1000 sq ft.)

selling unbranded products or export surplus. These stores are
typically in high streets or furniture markets but lack any “quality
retail” positioning or imagery

Unorganized Organized

• Targeted towards mass • Targeted towards

market medium and high end

• Crammed and clumsy • Emphasis on visual

store frontage merchandising, branding
and retail imagery and
quality of merchandise
on offer.

• More emphasis on price • In-store Visual

than towards quality of Merchandising and
merchandise Ambience

• Cluttered product display • Emphasis on product

display and customer
service

• Dependence on store
staff for showing
products

Key Players In Organized Segment

 Key Players

Branding Aspects
 Branding is a relatively weak phenomenon within the home linen category
– the retailers itself is the brand for the consumer

 Branded products, whether retail brand or product brand, are most

popular for bed sheets. For all other products, usage of smaller brands or
unbranded players is more popular

 Very few brands are actually recalled by most consumers. Consumers

rarely ask for specific brands even if some exist.
MODEL FOR ENTERING THE WORLD MARKET BY ANY
BRAND/RETAILER
Figure 1: Market led planning process

Whichever export method you choose, an understanding of the

target market is essential. Only by understanding what type of
consumer you are targeting can you develop an appropriate product,
or be in a position to assess the decisions/actions being taken on
your behalf by other people involved in the marketing process.
RETAIL AND HOME FURNISHING MARKET IN INDIA- A SURVEY ON
CONSUMER BEHAVIOUR(6 mar,2008)
 KEY INDIAN PLAYERS-Brands Rule the Indian Home Furnishing
Market

Home Furnishings, Home Textiles and Home Decor Accessories Companies

Barcodes, Stickers & Labels 998

Bath Towels, Bath Robes & Other Bath Linen & Bath Textiles 75

Bed Covers, Curtains, Cushions & Other Draperies 3609

Carpets & Rugs 2122

Cotton Bags, Canvas Bags & Jute Bags 1171

Embroidery & Embroidered Garments, Made ups & Furnishings 1040

Fabrics & Textiles 5182

Fashion And Designer Bags 984

Home & Household Furniture 386

Jute Handicraft, Wall Hangings & Jute Gift Items 213

Kitchen Tablecloth, Kitchen Towels, Napkins & Other Kitchen Textiles 119

Miscellaneous Home Furnishings 1889

PU Foam, Coir & Jute Mattresses 451

Tablecloths, Table Covers, Placemats & Other Table Linen Manufacturers 776

Textile, Garment Machinery & Equipment 1274

Towels, Napkins, Handkerchieves & Aprons 1285

Upholstery, Quilting, Pintuck & Other Home Furnishing Fabrics 808

 Some Major Players and their importance

• Welspun India

o Asia's largest terry towel manufacturer and fourth largest in the

world.
o It supplies to leading global retailers, meeting 15 per cent of
Wal-Mart's terry towel requirements, 85 per cent of Tom
Hilfiger's and 100 per cent of Shopko's.
o It has plans to double its terry towelling capacity to 23830 TPA,
enhance yarn capacity by 25000 spindles and introduce bed
linen with a 35 million metres capacity and has earmarked a Rs
6 billion budget for its expansion plans.
o Welspun's deal:- With exports accounting for 90 per cent of
the total turnover, Welspun entered the domestic retail business
last year through its brand Spaces and Welspun Home Mart
under the aegis of Welspun Retail Limited.
  With the acquisition of the premium brand Christy, 20 per
cent of the company's consolidated sales would come from
branded products by FY07.
 Says an analyst from a broking firm, "With the acquisition
of Christy, not only will Welspun's retailer base for existing
products rise but also new product launches will accelerate
in those markets."
 Apart from manufacturing, Christy supplies a wide range of
its own label products for leading retailers. Revenues grew
by 9 per cent in 2005-06 and are expected to touch
approximately Rs 330 crore (Rs 3.3 billion) in 2006-07.

• Alok Industries

o has the largest processing capacity in India and offers fully

integrated facilities for yarn texturising, weaving, knitting,
processing, made-ups and garments.
o It has initiated plans to expand capacities across all segments by
investing Rs 10 billion.
o It is focusing on home textiles and garments, which will
contribute to nearly 50 per cent of its revenues by 2007.
o It has already got an impressive client list that includes
brandnames such as JC Penney, Tommy Hilfiger, TARGET, Wal-
Mart and international buying houses such as Britannica Home
Fashions, Elite Home Products, etc.

• Arvind Mills

o This company boasts of a wide product range in value added

fabric, from fabric to garments in denim, shirting and knits.
o It is a supplier to brands such as GAP, Marks & Spencer, Levis,
Tommy Hilfiger and Nike and is upgrading its garment capacities
to 14.3 million pieces per annum.
o Arvind Mills dominates the Indian denim market with a 72 per
cent share of the estimated 80 million metres denim market.
 CHINA AND HOME TEXTILES

China : Household textile industry captures 30% of domestic market

Currently, Chinese household textile industry is developing at a quick pace

because of increase in consumption. This industry accounts for 30 percent of
domestic textile markets.
This surge is the direct result of increased level of aesthetic sense and
standard of living in people of China.

The textile products, which are now used in hotels, restaurants, cars and
other fields are of high quality.

In recent years, Chinese home textile industry has developed rapidly,

growing up to 20 percent year-on-year. Market share in the overseas has
also grown.

The top three largest export markets are USA, EU and Japan.

The statistics said that China's top export of home textile by province
are Zhejiang, Shangdong, Jiangsu, Shanghai and Guangdong
With financial assistance pouring in, it is expected that within next three
years, home textile sector in China will become one of the biggest revenue
earner for the country.
However, Chinese home textile industry is still going through many problems
like
o the management level in many companies is still not up to the mark,
o technological upgradation is required in designing of products and
o most importantly, increasing investment may result in unhealthy
competition among domestic manufacturers.

UNITED KINGDOM AND HOME TEXTILES

The market has become an increasingly fashion-led market that is predicted
to grow faster over the next few years due to the growth in the number of
households and increasing spending capacity per capita.

Since the latter half of 1998, the UK market for soft furnishings has
benefited from increased consumer spending and is showing a great
potential for crafters. Value growth has been stimulated by more frequent
replacement cycles as fashion trends move towards increasingly
contemporary designs and styles.

Design/style and material trends in the UK market

It is particularly important for producers of home textiles and soft

furnishings to understand colour, design and style trends in their target
market, as this is a major decision-making factor for most buyers. These
trends change rapidly, and it is therefore important to keep knowledge up to
date.

A brief description of the current trends is given below:

• Luxury (silk, satin, velvet, silk organza, suede, leather), with

associated rich, jewel, metallic or lustrous colour palettes
• Mid to low end (acrylic, polyester, cotton, viscose) use of beads and
tassels to reflect high -end look with the use of deep/bold coloured
variations

Materials vary across the different segments of the market, however certain
types feature more predominantly in the high end of the market (e.g. silk)
than in the mid to low end. However, cotton is the most popular material
overall.

The use of tassels and wooden bead finishes is becoming increasingly

dominant in decorative pillows/cushions aimed at the mid, and high
segments of the market, where something different is required. The
increasing popularity of woollen produced items is common to both rugs and
throws. The use of natural dye colours remains in demand across all
segments of the market.

For trend related information buyers currently employ the following

resources:

• Trend research organisations

• Trade shows
• Competitor analysis
 • Magazines/Publications

Home furnishings to be defined as the following - bedding, window

dressings, bathroom and kitchen textiles, cushions and covers and table
linen

What are the pricing trends and associated quality requirements?

The price points differ from one type of outlet to the next, based on the type
of consumer visiting the outlet and the consumer’s spending capacity. The
table below gives an indication of the pricing structures in each market
segment, as well as an approximation of the relative mark-ups.

Low End Medium End High End Average

Outlet Type
(£ ) (£) (£) Markups (%)

Fair Trade
< 10 10 - 25 25 - 50 400
Organisation

Importer < 10 10 - 20 20 - 40 50 – 100

Wholesaler < 10 10 - 20 20 + 80 – 150

Retail Chain <5 5 - 25 25 + 200

Departmental
< 10 10 – 100 100 + 150 – 300/400
Store

Chain and department store retailers in the UK market operate within the
price structures outlined in the pyramid below. As a potential supplier to the
UK market it is important to understand which segment of the pyramid is
most applicable to your type of product range in order to identify the most
appropriate target location for your product within a retailer’s product range.
Figure 3 : Pricing pyramid

The pyramid is split into the following three categories:

• Top – represents the percentage of high-end products carried by a

store in relation to its entire product portfolio
• Fashion co-ordinated – represents products that are current at a
particular point in time. These stores differentiate themselves through
unique offerings that are price sensitive and described as
‘styling/contemporary’ design items
• Core items – Refers to the low -end product ranges items that
guarantee sales and remain fashionable (in most retail outlets this
category represents the volume products which are dependent on quick
turnover and therefore require consistent supply)

The real value of the pyramid is in understanding where (within these three
3 categories) you are most likely to gain access as a supplier given your
particular product.

As a South African exporter, it is critical to be able to understand

and map a potential supplier’s pricing pyramid in order to ensure a
more accurate targeting of potential buyers.
Associated Quality Requirements

High-end merchandise Mid to low-end

• High degree of differentiation • Price competitive

- unique/special • Over-delivery on quality relative
• Consistent product quality to price
• Consistency of supply - • Ability to interpret design trends
reliable and incorporate into product
• Innovation - creative and development
trendsetting • Reliable supply

• Strong branding (critical to • Ability to produce medium to large

succeeding in the segment) volumes (500 -5000+ units)

What are the trade trends?

Overall trend: It is not possible to separate out handcrafted trade trends

from the overall statistical trade trends for most products because of the
way in which trade data is captured. The trends below therefore only give an
indication of overall trends within the home textiles import market as a
whole. Significant growth in the UK importation figures for blankets, rugs
and soft furnishings was seen between 1997-2001. The highest volume of
imports was in the cotton furnishings (Floor rugs) and synthetic blankets
categories.

Volumes in all categories are still relatively small when compared to the rest
of the world, and the United Kingdom's imports of blankets and rugs of
synthetic fibres represent only 3% of world imports for this product. It is
ranked 8th in world imports.

During 2001, tablecloths made from pulp, cellulose and wadding accounted
for the highest import value within the table linens category. Additionally,
this product category also experienced the highest growth rate of 37% for
the period 1997-2001, proving to be a very popular import within the UK
table linen market. UK imports for this product category represent 9% of
world imports and are ranked 4th in global imports.

Table linen made from flax showed positive growth in excess of 30%, but
the import value was low for 2001. This indicates that this product category
is still in its early growth stages and offers possible (but limited) opportunity
to exporters based on the UK’s 2% share of global imports in this product
category.

There was significant growth in UK imports of all categories of window

treatments in 1997 – 2001. Categories of special interest (high volumes,
high growth) were cotton and synthetic curtains & blinds, and cotton knitted
products (high growth, low volume).

Articles made from cotton and synthetic fibres dominate the window
treatments category. The United Kingdom is the 2nd largest importer of
cotton products with a 12% share of the global market. The import value for
this product for 2001 was $53 million, coupled with a growth rate of 15% for
the period between 1997-2001. Articles made from synthetic fibres
increased by 26% during the same period. The import value of this product
category was the largest within the Window Treatments group at $58
million. UK imports represent 9% of world imports, and it is the 4 th largest
global im porter. Collectively these two product categories are high
opportunity markets for South African exporters.

Who are the major competitors in the UK market?

Mid to low end

Products from China dominate the low-end segment. The South Asian
countries, such as India dominate the ‘low to mid’ segment of the market.
The extremely low cost of manufacturing in these countries (due to low
labour cost and materials) makes it difficult for manufacturers from other
countries to compete with them on price. The availability of high quality,
domestically produced textiles in these countries has ensured a constant
supply at minimal cost.

The price competitive, low end of the market is also a difficult one for SA
suppliers due to the high costs of shipping, combined wit h SA’s production
costs. This makes it difficult for suppliers to be price competitive.

High-end

Italy and France dominate the high-end segment of the market. Branding is
a key component of the high-end products, as it promotes exclusivity. Both
Italy and France have successfully branded their products.
Which consumer types do you want to target?

‘Niche marketing’ is the practise of targeting specific populations of people

with goods designed to appeal to their specific taste and need. Two such
‘niche markets’ that offer opportunities for Indian crafters in the UK are fair
trade purchasers and ethnic consumers.

Fair Trade purchasers /ethical trade purchasers

These purchasers have some concerns about the labour and environmental
standards under which products are produced, and the degree of benefits
that go to producer groups. They are also interested in cultural authenticity.
They form a far smaller potential market than the mainstream consumer,
but are expected to grow.

On which retail outlets do you want to focus?

NB: Crafters should seek assistance from the CCDI or other

related institutions to assist in the preparations for meeting a
retailer for the first time.

Top Retail Stores

• Besmo (http://www.besmo.com/)
• Conran (http://www.conran.co.uk/)
• Marks & Spencer (http://www.marksandspencer.com/)
• Debenhams (http://www.debenhams.com/)
• British Home Stores (http://www.bhs.co.uk/)

High street departmental fashion retailers (great niche opportunities

for small volume, quality competitive crafters)

• Liberty (http://www.liberty.co.uk/)
• Beales (http://www.beales.co.uk/)
• Laura Ashley (http://www.laura-ashley.com/)

Independent retailers (Great niche opportunities for small volume,

quality competitive crafters)

• Designers Guild (http://www.designersguild.com)

• General Trading Co. (http://www.general-trading.co.uk)
• Copes (http://www.copes.co.uk)

Home furnishing in France

The notion home furnishing consists of three categories : home

furniture, home textile and home decor. The market of home
furnishing is segmented into distribution mode and type of home
furnishing.

Home furnishing market in France

Home furniture

The furniture market is valued at more than 10 billion euros, it is

constantly growing, although the French production know a drop.

The consumption of home furniture since 1988 (in billions of

euros)

After years marked by the erosion of consumer goods, furniture

market has known a sharp rebound in the period 1998-2001 with an
average annual growth rate of 2.3%. The consumption of French
households in new furnishings, amounted in 2004 to 8.57 billion euros,
an increase of 3.1% compared to the previous year. The recovery
underscores the desire of the French for the construction of their
houses. It is explained by the fact that two years ago, french asked a
lot of information without having to make purchases. This return to
growth of the market is reinforced by the declining savings rate and
the favourable financing conditions.

The market is segmented into distribution mode, type of furniture.

The breakdown by type of furniture is roughly as follows:

3% 2%
10%
Furniture meublant
38%
Paddedseats
Kitchenfurniture
Bedding
20% Furniture bathroom
GardenFurniture

27%

The segments that have seen a strong increase between 2005 and
2006 are bedding (5.5%), kitchen furniture (5.4%).

Distribution Market Turnover Evolution

mode share (billion 2006/2005
euros)
Specialized 83.9% 7.55 + 3.2%
retailers
Equipment for 26.0% 2.34 + 0.1%
the home
Young habitat 16.3% 1.47 + 14.3%
Mid-range 15.0% 1.35 - 2.9%
furniture
Kitchen 9.5% 0.85 + 7.0%
specialists
Artisans 5.1% 0.46 + 0.6%
High-end 4.5% 0.40 + 1.9%
furnishings
Living-room 2.4% 0.22 + 4.1%
specialists
Other specialist 5.1% 0.46 + 2.9%
shops
Non-specialized 16.1% 1.46 - 0.1%
retailers
Mail order 6.0% 0.54 - 2.0%
DIY 4.1% 0.37 + 2.0%
supermarkets
Hypermarkets 1.9% 0.37 + 1.1%
Department 0.7% 0.07 - 1.4%
stores
Other non- 3.4% 0.31 + 0.5%
specialized stores
Total 100% 9.01 + 2.6%

France lies the tenth exporter of furniture and the fourth importer in
the world respectively with 10 and 7 billion dollard. France will lose its
competitiveness as a result of competition more and more strond of
the countries with low labour costs. The french furniture manufacturers
realize three-quarters of their export furniture in the European Union
and mainly to Spain, Germany, Belgium and Luxembourg, the United
Kingdom, Portugal and Italy. Outside the EU, the main exports are
made to Switzerland and the United States. The French imports of
furniture is rising steadily over the past decade and nearly 80% in
France draws in the European Union from Italy: 24%, Germany,
Belgium and Luxembourg, Spain, Poland, Portugal, Denmark and
Austria. Other countries with low labour costs are taking significant
market shares furniture, including China, Romania and Indonesia.

With a growth rate of 3% in January 2008, the market for furniture

continues the positive trend of 2007. In addition, the offensive
strategy to offer professionals and the increased use of media
reinforces an estimate of market growth for 2008 to 3.5% 4.
Home textile

The market of home textile is segmented into distribution mode, type

of home textile.

The following diagram shows the various types of distribution for home
textiles in France in 2005:

8% Hyper & Supermarkets

4%
6% 31% Mail order
6% Department stores
Bigsurface specialized
Specialized stores
7% Independants
10% Markets
28% Other

Household consumption in 2002 (the different segments of Home

Textile) :

150,6; 6% 42,3; 2% 503,1; 19%

Bedaccessories
639,8; 24%
Bed

Toilet

Curtains

Table

433,2; 16% 905,3; 33% Office

The figures represent the amount in million euros.

The consumption of the French in Home textile is done for 69%

excluding sales and promotion.
 In this difficult market, the target is to attract predominantly
women (90% of purchases). The average annual budget per person is
about 70 euros. These are the prices that capture the consumer. The
great general distribution and sale remotely capture 59% of the
money spent on table linen motion, bed and toilet. The specialists, for
their part, remain stable with 17% of the money spent captured.

Home décor

The consumption of home decor follows the same pattern as for home
furniture (cf I A).

The french market of interior decor represents more than 6 billion

euros of turnover, or nearly 15% of market share of the equipment in
the house. It knows a considerable growth for several years.Important
in absolute terms and supported by firm fundamentals, it remains
erupted between about 10000 stores and suffers from an offer which
remains relatively unstructured.

Change in the attitude of the French since a few years

In recent years, the attitude of french changed vis-à-vis home

furnishing. In fact, do the decorating at home has become a trend, a
source of envy and pleasure. Consumers can now find the answers to
their needs the most varied of comfort, well-being on a daily basis and
functionality. It can play mode effects, combining the modern with the
old, wood to other materials, declined colors, follow trends in fashion,
irrespective of its budget. At such events, has added the commitment
more and more marked of households for their inside (the house is
seen as the first protection against the stress of modern life). In
addition, the increased number of building permits, the place of the
house or housing decoration in the decoration or female press, the
willingness of the French to become owners of their housing and
shopping pleasures are all factors explaining the enthusiasm of
 consumers for home and habitat. The increase in home ownership will
also increase the average household budget for the purchase of
furniture.

A few years ago, the french bought furniture for good quality “for their
entire life" (often on the occasion of marriage). Now they prefer to buy
home furnishing cheaper to move more often. So far, the French
spend more money for hobbies than for decoration, but it is being
reversed. While some did not hesitate to go into debt to afford the
living room of their dreams. In some stores, 40% of sales are made on
credit. Each year, one out of three French buys at least one piece of
furniture. The lifespan of sofas rose from 15 to 10 years and reaches 4
or 5 years for products in vogue. In 2004, households spent french
8.57 billions of euros to purchase furniture, a figure up 3.1%.

Main companies in the French market of home furnishing

Home furniture

The leaders of home furniture in France are :

• Conforama (French company of PPR Group) : market share of 16.6%

in 2003, 16.9% in 2004 , 16% in 2005 , 15.7% en 2006 ; turnover of
3.275 billions of euros in 2006 ; 9100 employees ; 140 outlets
• Ikea (Swedish company) : market share of 8.6% in 2003, 9.9% in
2004, 11.1% in 2005, 12.2% en 2006 ; turnover of 1.268 billions of
euros in 2005 ; 5700 employees ; 18 outlets
• But (Kingfisher, French company) : market share of 10.1% in 2003,
10.2% in 2004 ; turnover of 1.6 billions of euros in 2004 ; 6000
employees ; 236 outlets
• Fly (French company) : market share of 5.7% in 2005 ; turnover of
510 millions of euros in 2005 ; 130 outlets
• Alinéa (Mulliez, French company) : market share of 2.8% in 2005 ;
turnover of 250 millions euros in 2005 ; 13 outlets
• Schmidt (French kitchen specialist)
• Mobalpa (French compagny)
• Atlas, Mobilier de France, Monsieur Meuble (French Compagny)
• Lapeyre la Maison (French Compagny)
• La Redoute (French specialist in mail order)
 • Camif (French specialist in online sales)

Share of market of the leaders in home furniture in France, in

2006

Home textile

The leaders of home textile in France are not so many :

• Carré Blanc
• Descamps (Zucchi Group)
• Matins Bleus (Zucchi Group)

Home decor

Given that the important companies of home furniture sell often home
decor, the leaders of home furniture are the leader of home décor :
Conforama and Ikea.

Fair trade organisations

The primary objective of a fair trade organisation is to pay the

manufacturers a fair wage relative to that particular country,
and to ensure long-term developmental needs are addressed
(offer excellent opportunities for emerging crafters).

• Traidcraft (http://www.traidcraft.co.uk/)
• Tearcraft (http://www.tearcraft.org/)
Mainstream department and chain retail stores selling multiple
product ranges (not recommended because of their high volume
demands)

• House of Fraser (http://www.houseoffraser.co.uk/)

• John Lewis (http://www.johnlewis.com)

Mail order (Not recommended because they offer limited

opportunities for crafters because of their high volumes and relative
sensitivity to price)

• The White Company (http://www.thewhiteco.com/)

• McCord (http://www.mccord.uk.co/)

Which marketing & distribution channels are most appropriate?

Direct exporting

Direct exporting involves a producer dealing with the practicalities of

exporting themselves i.e. working with a logistics service providers and
importers and/or wholesalers and end retailers. Craft producers may choose
this option if they have the necessary skills, resources, market contacts and
time in-house to manage this process, particularly if they want to maintain
control of the process and reduce the number of players taking a share of
the profit margin. This can be illustrated as follows:

Figure 5 : Direct distribution options

Indirect exporting

Indirect exporting involves an intermediary that acts as a link between the

manufacturer and the buyer. The intermediary may do everything on behalf
of the manufacturer, from marketing the product to selling the product to
the buyer, or may only play some of these roles. Craft producers may use
this option if they do not have the time, desire experience or skills to
manage the process themselves. This is illustrated below:

Figure 6: Indirect distribution options

Trade Shows of high Importance:

Spring Fair – Birmingham (NEC)

(http://www.springfair.com/)

Autumn Fair – Birmingham (NEC)

(http://www.autumnfair.com/)

Design Interiors – Birmingham (NEC)

(http://www.thefurnitureshow.co.uk/)

DECOREX International (London)(http://www.decorex.com/)

Trade shows of medium importance

• EFFDA - Ethnic Furniture Fabrics & Decorative Arts

• Soft Furnishing Trade Show
• Live Crafts Show
• TWISTED THREAD - Knitting & Stitching Show
• Art Craft & Gifts Show
• Spring Art Craft & Gift Show
• Belfast Craft Fair
• Highland Trade Fair (Gifts)
E-marketing

This provides buyers with information in one resource thereby attracting

more buyers and building this niche market.

Targeted direct marketing to buyers

Buyers are likely to have an initial screening on the basis of the fit of your
product and price. The initial screening may be done off the basis of photos.
Many will then have another level of screening in relation to:

• Quality standards
• Reliability of supply
• Production volumes
• Ability to interpret design briefs

US MARKET
3.1 Overview of the US market

The United States is easily the world’s single largest market for consumer
goods and demand has largely been satisfied for decades by mass
production resources. The US Home Furnishings category alone (comprising
Furniture & Accessories, Home Textiles, House wares, Home Appliances,
Table-Top, Floor & Wall Décor, and Consumer Electronics) had a 1999-
estimated wholesale value of $146 Billion, with a 13.5% growth rate.
Paradoxically, the dominance of mass-produced goods within the
marketplace has created significant opportunity for handcrafted merchandise
in many categories as consumer look for interesting new products to
consume. However, this opportunity is one filled with challenges for the
handcrafters.

For instance, handcrafted products in the above categories, which were

imported from Africa, Central & South America, developing Asia (China,
Pakistan, etc.) accounted for less than one - half of 1% of the total
estimated US demand in 1999.

However large the US appears from outside its borders, crafters

must understand that the US craft market is made of many
different segments, in which there are varied qualifying levels of
distribution based on price, quality, style, availability and other
 factors.

In recent years, the industry has faced many changes, including the
consolidation among retailers through the growth of retail chains, catalogue
showrooms, and TV home shopping networks; a decline in the number of
wholesalers; reduced tariffs; increased imports; economic depression etc.
Consumers in most categories have become very price sensitive. Crafters
therefore need to be creative and focus on serving niche markets.

The major product groupings in home textiles and soft furnishings that are
used by the NAICS (North American Classification System) are listed below:

• Home furnishings
o Toss/decorative pillow
o Throw
o Cushions-patterned/plain/textured
o Floor pillows
• Table linens
o Tablecloth
o Runner
o Placemat
o Coaster
o Napkin
• Flooring
o Rugs
o Mats
• Curtain/window treatments
o Drapes
o Valances
o Curtains/Blinds
o Tie-backs/holdbacks

3.2 What are the design/style and material trends in the US market?

It is particularly important for producers of home textiles and soft

furnishings to understand design and style trends, as it is a major decision-
making factor for most buyers. These trends change rapidly, and it is
therefore important to keep knowledge up to date.

The US is vast and its sheer size means that enormous cultural variations
occur from state to state. These factors have led to the development of a US
market that is both broad and fragmented. Styles, designs and trends also
differ from region to region. It is particularly vital for crafters to be aware of
these variations.

A wide range of materials are used in the US home textiles market. There
are two trends, both of which incorporate strong textural dimensions that
encourage touch.

• Luxury (silk, satin, velvet, silk organza, suede, leather), with

associated rich, jewel, metallic or lustrous colour palettes
• Natural (natural fibres such as cotton, linen, hemp, flax, sea grass)
with associate natural colour palettes (earth, sea, forest related) with
an emphasis on natural dyes

The dominant craft techniques in decorative pillows and table linen are
beading and embroidery, while occasional examples of patchwork and ribbon
work are found. Both China and India dominate as suppliers of beaded and
embroidered items, particularly in the luxury fabrics such as silk which tie
well to their “traditional” products.

The current trend amongst many of the larger retailers is an

increased focus on own brand/private label, which creates an
opportunity for suppliers that do not have their own brand.

Trend related information with reference to design; style and material can be
accessed through the following resources:

• Trend research organisations

• WGSN-World Global Sourcing Network

• “Home Textiles Today”

• Trade shows

• Competitor analysis

• Magazines (design, homeware, fashion/style)

What are the pricing trends and associated quality requirements?

The current recession in the United States has put a lot of pressure on most
retailers, resulting in many liquidations and closures. As a result, in a highly
competitive retail market, retailers push their suppliers to provide at lower
cost. For many of the large “value” or discount retailers, they make profit
from selling large volumes rather than high mark-ups on individual items.
On the other extreme, the very high end of the market (which is a much
smaller but more lucrative side of the market) is more concerned about
quality and branding than price. In between these two extremes are a range
of variations, which South African crafters will need to explore to find the
potential opportunity for them. Please see Appendix B for some
examples of price poin ts in various retail outlets in the US.

The price trends in the US market indicate that most South

African crafters are unlikely to be able to compete in the low end
of the market. South African crafters therefore need to position
themselves in the medium to high end of the market in order to
be able to compete and make exporting worthwhile.

Associated Quality Requirements

Medium to high end requirements include:

• Quality of materials
• Quality of workmanship
• Reliability of supply
• Excellent design application
• Branding - much of the high-end market for home textiles and soft
furnishings in the mainstream retailers is depending on brand names
and designer labels, or acceptance as a supplier of own brand/private
label goods.

What are the trade trends?

• Import value trends

o Rugs made from synthetic fibres account for the largest value of
imports
o The US imports of synthetic rugs represented 20% of world
imports for this product, making it the world’s largest importer of
this product
 o Cotton rugs, showed an import value of $89 million and once
again the US was ranked as the largest world importer
(accounting for 34% of global imports)
• Import growth trends
o Both product categories showed very positive growth between
1997 -2000. With growth of cotton rug import exceeding 30%.,
and growth in synthetic fibre rugs of 22% for the same period.
o However, the product category blankets and travelling rugs had
the highest growth of 66%

NB: This indicates an opportunity with high potential for exporters to

supply the US market with this item, as the demand for these imports is
extraordinarily high.

Furnishing made from cotton and textiles

• Import value trends

o The largest import product category of furnishings for 2001 was
articles made from cotton, which totalled $115 million
o In terms of growth, two product categories showed growth in
excess of 30%, i.e.:
 Furnishing articles nes, of synthetic fibres, not knitted or
crocheted (630493)
 Furnishing articles nes, of other textile materials, not
knitted or crocheted (630499)
o In addition, the US imports 29% of the total world imports for
this of furnishings made from textiles, making it the world’s
largest importer of products that fall into this product category

• Import growth trends

o Imports of table linen were relatively low, apart from those
made from cotton
o Table linen of cotton, not knitted accounted for over $232 million
worth of imports and the second largest import product
category, table linens of man - made fibre not knitted accounted
for over $57 million
o The US's imports of the product category table linen made from
cotton, represents 38% of world imports for this product, and
once again it ranks 1st in world imports
o The growth in imports for the period between 1997-2001 was
16%
 o Overall, the growth of US imports of Table Linens product
categories has achieved double-digit figures

Window treatments

The US import values of window treatments are generally larger than the
imports of table linens, with window treatments made from synthetic fibres
and from cotton dominating US imports by both value and growth

• Import value trends

o The largest import value in this product group was $200 million
for the window treatments made from synthetic fibres
o The next largest import category was for window treatments
made from cotton, which accounted for approximately $138
million
o The US was the world’s largest importer of both product
categories

• Import growth trends

o Additionally, both product categories experienced high growth
for the period between 1997-2001. Window treatments made
from synthetic fibres grew by 24% and those made from cotton
grew by 33%
o Window treatments made from textile materials other than those
made from synthetic fibres or cotton, grew in excess of 50% in
2001

NB: In terms of offering export opportunities for South African

suppliers, the high growth in window treatments made from synthetic
fibre indicates great potential for crafters.

Who are the major competitors in the US market

Mid to low end

Products from China dominate the low-end segment. The South Asian
countries, such as India dominate the ‘low to mid’ segment of the market.

Low labour costs and the availability of high quality; domestically produced
textiles in these countries are key sources of competitiveness. The price
competitive, low end of the market is also a difficult one for SA suppliers due
to the high costs of shipping, combined with SA’s production costs. This
makes it difficult for suppliers to be competitive in pricing.
High-end

Italy, France and Portugal dominate the high-end segment of the market.
Branding has been the main source of competitiveness for these three
countries as it is an integral part of the high-end product. Branding
(associated with a ‘tradition’ of handcrafting excellence) is essential to
transacting in the high-end market segment that is aimed at promoting
exclusivity.

Other smaller competitors include Guatemala, Egypt, Mexico and the

Philippines.

Which consumer types do you want to target?

South African crafters need to target niche markets in order to succeed or

compete against the major craft producing countries. ‘Niche marketing’
describes the practise of targeting specific populations of people with goods
designed to appeal to their specific taste and need.

Fair Trade purchasers /ethical trade purchasers

These purchasers have some concerns about the labour and environmental
standards under which products are produced, and the degree of benefits
that go to producer groups. They are also interested in cultural authenticity.
They form a far smaller potential market than the mainstream consumer,
but are expected to grow.

Homeware buyers and gift purchasers

The items classified under “homeware and gifts” are wide ranging. They can
be made from of a wide variety of raw materials, ranging from paper to
metal, and they can range from purely decorative to utility products.
Therefore, there is a clear overlap with products falling under different
categories such as household articles, home decorations (including small
furniture), toys, fancy jewellery, arts and antiques and garden articles.

The criterion for buying by the consumer is whether it will fit into his/her
particular fashionable style, or whether it represents a certain image that
may be useful as a gift. A remarkable common characteristic in all these
articles is their decorative and/or emotional value; consumers seem to
purchase them just because of this feature.
Homeware purchases are viewed as becoming an increasingly important segment in the gift
market, as many US residents increasingly see their homes as a “retreat” where they can feel
secure and pampered. Gifts may be purchased in major mass retailers, specialist chains and
department stores, but may also be done in the thousands of small, independent gift stores across
America.\

Which retail outlets do you want to focus on?

South African crafters wanting to succeed in US markets need, in addition to

a good, wellpackaged and well-priced product, efficient and effective
business systems.

Recommended retail stores are listed below:

Most of these retailers have online product catalogues, which

may give you an idea of their product style and pricing.

• ABC Carpets and Home (http://www.abchome.com)

• Pottery Barn (http://www.potterybarn.com/)
• Crate & Barrel (http://www.crateandbarrel.com/)
• Pier 1 Imports (http://www.pier1.com/)
• Gracious Homes, New York
(http://www.gracioushome.com/products.htm)
• Lowe’s (http://www.lowes.com/)
• May Department Stores (http://www.mayco.com/)

High-end department fashion retailers

(Dominated by specialist departmental stores that will be differentiated by

focusing on addressing a particular price segment (i.e. high-end product
merchandising). Highly label and brand conscious. Store numbers range
from around 5 - 100. Aim to promote an imag e of exclusivity by targeting
the high end of the market.
• Dillard’s (http://www.dillards.com/)
• Coldwater Creek (http://www.coldwater-creek.com/)
• Neiman Marcus Group (http://www.neimanmarcus.com/)
• Saks Department Stores (http://www.saksincorporated.com/)
• SA equivalent retailer is Stuttafords

Gift Stores
There are altogether 40 000 independent gift stores in the US. Founded in
1952, the Gift Association of America is the oldest and largest trade
association comprised of retail stores and wholesalers in the gift industry. It
has around 600 retail members, as well as over 50 wholesale members.
These consist of gift stores, boutiques.

Fair Trade Organisations

Members of the Fair Trade Federation have committed themselves to

principles of fair wages, cooperative workplaces, consumer education,
environmental sustainability, financial and technical support, respect for
cultural identity and public accountability.

Ten Thousand Villages (http://www.tenthousandvillages.com/)

Other retailers

Catalogues and TV home shopping

The catalogue and home shopping trade is well established in the US

market. The companies below have a primary focus on catalogues and home
shopping.

• Cornerstone Brands (http://www.cornerstonebrands.com/ )

• Hanover Direct (http://www.hanoverdirect.com/)
• “Domestications” (http://www.domestications.com/)
• Lillian Vernon (catalogue & store) (http://www.lillianvernon.com/)

Mainstream department and chain retail stores selling multiple

product ranges

• JCPenney department stores (http://www.jcpenney.net/)

• Federated Department Stores (http://www.federated-fds.com/)
• Bloomingdales (http://www.bloomingdales.com/)
• Bon Marche (http://thebon.dailyshopper.com/)

Which marketing & distribution channels are most appropriate?

Direct exporting

The direct selling of products from manufactures to buyers without the

involvement of the middleman. This can be illustrated as follows:

Figure 7 : Direct distribution options

Indirect exporting

Involves an intermediary that acts as a link between the manufacturer and

the buyer. The intermediary does everything on behalf of the manufacturer,
from marketing the product to selling the product to the buyer. This is
illustrated below:

Figure 8: Indirect distribution options

Contact the CCDI for a list of recommended online trading houses, agents
and intermediaries.
Trade Shows of high Importance:

• New York International Gift Fair

• San Francisco Gift Fair
• Atlanta Gift Fair
• GLM Show
• New York Home Textiles Show (fall and spring)

INDIA RACES TO COMPETE IN THE QUOTA FREE WORLD-A

PROJECTION FOR THE FUTURE

India is on a fierce race to become a more dominant player in the U.S. home
textiles industry, but some experts say it may need to do more to get there.

Experts said the industry is expanding rapidly, with investments in home

textiles in the next two years expected to reach $1 billion. Exports in this
segment are also counted on to grow at the rate of 25 percent per year.

However, experts believe that issues on capacity increases, state-of-the-art

facilities, and backward and forward integration need to be addressed to
help India realize its export growth potential.

Rapid growth is projected for this industry at the rate of 14% with the
market size increasing from Rs. 530 Crores (2007) to Rs 1000 Crores.

Home textile exports are projected to increase by more than 400% by 2010.

Investments in Home Textiles is projected to increase to USD $ 7 Bn by

2010.

HOME FURNISHINGS-THE ROAD AHEAD

The global home textiles market, estimated at US $ 70 billion offers

tremendous opportunities for Indian players. The US and EU imports nearly
$30 billion worth of home textiles.

INDIA has emerged as the top supplier in major product categories in the
`cut-throat' US home textiles market, leaving erstwhile leaders such as
China, Portugal, Brazil and Turkey to bite the dust.
KSA Technopak expects India's home textile exports to grow from $1.2
billion now to $5 billion by 2010. With manufacturing facilities closing down
in the West, international retailers are stepping up their sourcing of home
textiles from countries such as China, India and Pakistan.

McKinsey estimates that the global trade in home textiles will grow from
$8.6 billion to $23 billion in 2010. India's presence in the US home textile
market is growing. India is the largest supplier of terry towels, bed linen and
second largest vendor of cotton made-ups to the US markets. China,
Pakistan, Bangladesh and Vietnam are major competitors for India in this
segment.

In the post-quota regime, India's share of US imports has grown

(between January and August 2004) for sheets (20%) terry towels
(21%), pillowcases (19%) and total made-ups (11%).

While China is slated to be the biggest beneficiary in terms of market share

in US apparel imports, India and Pakistan are expected to benefit
substantially as well.

As India occupies a competitive position when compared with equally low-

cost producing countries, particularly Pakistan and China it can easily bank
upon the huge opportunity in terms of outsourcing of home textiles
to the world's biggest markets like the US and EU, which account for
60 per cent of the $70 billion global home textile market.

India's exports to these markets are also growing at a scorching pace -

terry towel exports to the US grew at 26 per cent and bed sheets at
35-40 per cent in calendar year 2006.

These acquisitions will help the companies create a foothold in the brand
conscious markets such as the US and EU.

THE INDIA ADVANTAGE

• Average wage rates in India are 50-60 per cent lower than that in
developed countries, thus enabling India to benefit from global
outsourcing trends in labour intensive businesses such as home
textiles.
• Design and fashion capabilities strengths will enable Indian players to
strengthen their relationships with global retailers and score over their
Chinese competitors.
 • Production facilities are available across the textile value chain, from
spinning to garments manufacturing. The industry is investing in
technology and increasing its capacities.
• Large Indian players such as, Welspun India, Alok Industries and
Raymonds have established themselves as 'quality producers' in the
global market.
• India has gathered experience in terms of working with global brands
and this should benefit Indian vendors.
• Indian suppliers have shown specialisation in case of fine-count made-
up items

The domestic market looks appealing too. According to Mr Akhil Jindal,

President, Welspun India, "Demand for housing has increased the home
textile market fourfold. With hygiene, fashion and coordination on the
upswing, the requirement of home textiles will concurrently increase".
RESEARCH TOPICS:

 TECHNOLOGY AND HOME TEXTILES

With the advent of technology no part of human life remains untouched by

it. Technology is constantly being evolved to give humans a safer and a
more comfortable life.

OBJECTIVE:

The objective of the research is to determine the increasing use of

technology in home furnishings, consumers responses to it and also
implications for the retailers and manufacturers ( in terms of generating
larger sales volume & along with the adding costs).

-Manufacturers have successfully adapted performance apparel technologies

for use in home textile products.

-Bed sheets are being made from Coolmax and Thermolite fabrics. Coolmax
fabric incorporates a moisture management technology and has traditionally
been used in active performance wear.

-Thermolite is a lightweight insulation material which was originally designed

for outdoor performance apparel.

Home textiles are also being made from various functional materials,
including Lycra stretch fabric, thermally adaptive bedding, environmentally-
friendly textiles, anti-microbial fabrics, stain protective treatments, flame
retardant materials and fragrance encapsulating technologies.

 BRAND BUILDING IN HOME TEXTILES INDUSTRY

OBJECTIVE:

The main objective is the determination of the extent of brand awareness

among the indian consumers for the home furnishings or home textiles
products and how can a company establish itself as a brand in this industry.

ABSTRACT:
HOW does one create brand consciousness in consumers' minds for home
furnishings, a category which is highly commoditised and where brands don't
matter much to the consumer? This is the biggest challenge facing all the
major Home Furnishings companies.

“We want to become the number one home textile company by the end of
this year, but apart from this, we have a larger mission on hand — and that
is to get the category to evolve,”. says Anshuman Singh, Chief Executive
Officer, Welspun India

As the segment is largely commoditised, the primary focus of the company,

would be to get the category to constantly evolve, which can only be done
through customer education. It is also trying to create excitement in the
segment bringing fashion into home textiles creating fashion consciousness
in India about home furnishings

Also this segment faces intense competition from the traditionally

unorganised sector which caters to about 90% of the RS.15000 corer market
of the industry.

The following questions would be delved into:

• Advantages and disadvantages of being termed as a brand in the

home furnishings industry.
• Consumer understanding & willingness to accept branded home
furnishings

 DESIGNERS ENTRY INTO HOME FURNISHINGS

“India’s leading Home Textile brand, Bombay Dyeing, announced its

association with the Couture King of Contemporary Style, Sabyasachi
Mukherjee once again to launch the Bombay Dyeing Sabyasachi Tao
collection.”

“Krishna Mehta plans to come up with his exclusive range of designer home
textiles”

OBJECTIVE :

The objective is to determine the fashion consciousness among the

customers regarding home furnishings and the increasing inclination of the
designers to capitalise on this segment.
With the disposable income increasing the capacity of the consumer to
exercise choice in every sphere is increasing. Consumers now use their
houseses as a palette for their expressions.

GLOSSARY

Home furnishing

A field dealing with products for interior design and decoration, such as upholstery, rugs
and carpets, or bedding,furniture,lighting and other decorative items

Home textile

A field dealing with soft furnishing but doesn’t include furniture ,lighting and decorative
items

Home décor

home decoration or decor is the art of decorating a home so that it is

attractive, easy to use, and functions well with the existing architecture.
The goal of home decoration is to provide a certain "feel" for the room; it
encompasses applying wallpaper, painting walls and other surfaces,
choosing furniture and fittings, such as light fixtures, floorplans and
providing other decorations for the area such as paintings, sculptures and
carpets

Household textiles

Household textiles include bath linen (bath maths, bath rugs, towels,
washing gloves, etc.), bed linen (bedspreads, blankets, pillowcases, quilts,
sheets, etc.) and kitchen linen (table linen, dish towels etc.).

Furnishing textiles

It includes window covering (curtains and drapes), wall and ceiling

coverings, upholstery, other household products (rags, mops, soft floor
covering (carpets and carpet underlays), mattresses, pillows and
quilts,decorative pillows, throw rugs, etc.).
 Bibliobraphy

www.india home furnishing exporter.com

www.india-export.com

www.google.co.in

www.china.org.cn

www.ksa-technopak.com

apparel online-journal

CITI reports

Textile view