By Reena Mital
NEW DELHI, India–To meet growing international demand, the Indian handmade rug industry has turned its focus to building efficient supply chains and design skills.
A variety of India-based companies are making investments to enhance overall capacities, design studios and product portfolios, and to set up distribution networks in the United States.
Among the companies making such investments are Obeetee, which is expanding its dye-house capacity, as well as sprucing up its inspection and packaging facilities in order to impart various new finishes and looks to its rugs; Jaipur Rugs, which is setting up the necessary production and sourcing networks for its planned move into furniture exports; Global Overseas, which is adding 100 looms to its existing capacity, bringing it to a total of 400; Samara Carpets, which is increasing its dye-house capacity and also working on its design studio, with plans to bring out at least 30 to 40 new designs per week; Vishnu Carpets, which is setting up a second facility to enable the manufacturing of 70,000 square feet of “shaggies” per month; and Waziri, which is investing in enhancements for its design studio.
“International buyers are demanding newer products, themes and concepts, evident at the recently concluded High Point show in the U.S.A.,” said Aditya Gupta, director of Sharda Rugs. “Slowdown in the U.S. economy has led retailers to make their sourcing more efficient, and Indian exporters are ready to meet these new demands.”
According to Gupta, “Pricing is one area that exporters can work on, but offering commodity products would mean getting into competition with China and losing.”
To combat this, Gupta added, “Exporters are adding value to improve realizations, and more importantly, to create interest and demand among U.S. buyers for a product where consumer spending can be easily put off, or shifted to a low-priced item. We are trying to give them a reason to buy something new and different.”
This has led to companies sprucing up design studios, tying up with Indian and international designers, and aggressively tapping the traditional craft skills of India to adapt the same into floor coverings. This has become more important today as U.S. retailers are increasingly buying direct from suppliers across the globe.
“Retailers, to reduce supply-chain costs, are sourcing directly from suppliers across countries,” Gupta said. “They thus demand something innovative and a coordinated approach to home furnishings. As against this, importers and wholesalers work more on pricing. This has also led Indian exporters to set up distribution and warehousing facilities in USA, thus moving into the market, and offering customized service to retailers.”
Floor covering exporters are offering related products, too. Case in point is Jaipur Rugs’ plan to offer furniture in the next couple of years and Sharda Rugs’ move to export leather rugs, bath rugs, bean bags and other products. This is aimed at offering a one-stop shop to buyers, offering coordinated concepts, while utilizing the same distribution channels and rationalizing logistics costs.