Godrej & Boyce opens its first experience store as Ikea knocks

Godrej & Boyce (G&B) is taking the experience store concept to beat the competition heating up in the organised home solutions space at a time when Swedish major Ikea has been expanding aggressively in India.

Tapping the growing business opportunity, G&B’s new format christened ‘One Godrej’ will offer customers the entire gamut of home solutions products including- furniture, security, consumer durables, electronics and appliances, under one roof.

It’s first such store has opened for patrons in Thane and the company plans to invest Rs 50 crore for seven more experience centres across key markets in the country by 2022.

Speaking to DNA Money, Nyrika Holkar, executive director, Godrej & Boyce, said, the company has established a strong footprint in the lifestyle space with its portfolio of consumer durable businesses. “We believe there is a significant opportunity for Godrej to provide greater value by offering a comprehensive solution for homes. Consumer-facing businesses from across the group have consolidated their channels to provide services and products on a common platform called One Godrej by U&Us. We have been at the forefront of the home interior and durables markets in India and with continued customer focus and innovation we expect a compounded annual growth rate (CAGR) of 25% from these lines of businesses over the next three years,” she said.

Godrej & Boyce Mfg Co Ltd is part of the Godrej Group, which is one of India’s largest engineering and consumer products groups.

When asked if G&B’s new strategy is aimed at taking on Ikea, who has been expanding aggressively in India? “We believe there’s a lot of excitement now with new players entering the industry. Since a large percentage of the market is unorganised, we have a huge potential to leverage our expertise in this market. Besides, providing a hassle-free one-stop solution will be a great proposition to the consumer. We have a value proposition for the different segments of the market and this will be one of our strategies to address the home solutions space,” Holkar said.

Spread across 3,000 square feet the One Godrej concept will be backed by expertise from G&B’s interior design and project execution vertical operating under the banner U&Us. The company currently operates seven design studios across Mumbai, Pune, Hyderabad and Bangalore and plans to increase this number to 50 across 20 key markets in India by 2025.

Currently, the U&Us format does a business of Rs 20 crore, however, G&B is expecting the One Godrej and U&Us studio combination to grow manifold and deliver a turnover of Rs 1,000 crore by 2025.

The studio has completed 600 projects till date and has a quarterly run rate of six projects. We are now tying up with real estate firms and that’s a new strategic direction that we are taking in the business as we were primarily doing individual homes earlier. The entire gamut of services is offered in partnership with other mechanical electrical and plumbing (MEP) service providers.

“While our costs will be 15% more, the idea is that we would have a fixed budget so the customer doesn’t have any budget overruns, something that customers face in a conventional project,” Holkar said adding that quality of products used and services offered during the project execution will be ensured by the company.