Marble Becomes the Millennial Rich Man’s Way to Say, “I Have Arrived”
The operating income of top Indian ceramic tile companies has grown by 16% in the last four years…What you see is that homeowners are willing to spend like never before.
80% of Stonex marble sales are from aspiring homeowners
Saurav Agrawal, director of Stonex India Pvt Ltd, one of India’s top 3 merchants, writes:
Buying one’s own home is possibly the largest investment that a person makes in his lifetime. Your home is your status symbol, and its locality, size and interiors are considered a reflection of your station in life and an extension of your personality. We continuously try and portray the best possible image of ourselves through the cars we buy, the home décor we chose, the appliances we use and through the walls and floors of our houses. According to a report by CARE Ratings, the operating income of top Indian ceramic tile companies has grown by 16% in the last four years. View this in the backdrop of the growth of the Indian economy at large, which has been within the bracket of 4-8% (depending on which bodies’ research you read) in the past 4 years. What you see is that homeowners are willing to spend like never before. This growth can be attributed to government programmes (Smart Cities Mission, Atal Mission for Rejuvenation and Urban Transformation), more affordable home loans, and positive consumer sentiments.
Within home décor, the niche segment is marble flooring and walls, which too has seen exponential growth in the last decade. Since the time of Shah Jahan, marble has been used as a status symbol to convey affluence and grandeur. The luxurious feel of a 5 star accommodation comes from the marble used extensively and lavishly.
The story of marble consumption in India may well illustrate the growth of the Indian economy. For example, in the early 2000’s, most of our sales (Stonex India deals in imported marble), were to institutional customers – builders and hotels. But today, there is a growth in the percentage of retail customers who don’t think twice about purchasing tiles worth Rs. 6000/sq ft. Today, 80% of Stonex India’s sales are for people’s home floors and walls. This coincides with the impact of the 1991 reforms which had just started to make an effect on the purchasing power and the lifestyle aspirations of Indians at the turn of the century. What better way to announce ones arrival in life than to build yourself a grand house, with marble flooring and tiles?
Another interesting trend we see is the growth of consumers from Tier 2 towns – Coimbatore, Surat, Lucknow, Chandigarh, Ludhiana and the like – reflecting the economic potential as well as aspirational purchasing, that comes from India’s smaller manufacturing towns. Businessmen, rich farmers, merchants and entrepreneurs from manufacturing towns have travelled to metro cities or travelled abroad, seen the houses and hotels, and want to replicate the look and feel of luxury. We see that the maximum number of Mercedes Benz sold in India are in Chandigarh. Can luxury marble be far behind?
Not even the rich like being ripped off...
However, the purchase experience of luxury marble is not as smooth as buying a Mercedes. One of our customers from Durgapur said that purchase of marble was difficult business. He came to us in frustration, because the the actual shopping experience had left him desolate. Like other unorganized sectors, the marble market is plagued with too many hassles, regardless of the spending power of the customer. Though large (Rs. 5000 crore), marble market is very unorganized and similar to buying fish at a Mumbai fish bazaar. There are issues of transparency, quality and standards. How is a layman to differentiate Italian Michael Angelo marble from Makrana marble? The highest quality Michael Angelo marble can be sold at Rs. 3000 per square feet. But how is the layman to know he is not being cheated? These are high value customers, who will spend lakhs of rupees for quality and they don’t deserve to be shortchanged. That’s when we decided to make changes of standardization, quality control and fixed price for the millennial buyer.
Like any evolved business, you need to provide a differentiated purchase experience and services in order to attract the customer, develop the relationship with him for him to spread word of mouth goodwill about you. In order to do this, you need to convince the customer of transparency and value. One of our customers, Arvind Sachdev, president of commercial operations at The Lalit Hotels told us that, “We have a longstanding relationship with Stonex India, not just because of the product, but because of their desire to standardize the marble market.”
We are Indians and we expect value for money regardless of purchasing power – it’s ingrained in our purchase practices. One step towards fixing standards in an unorganized industry is by declaring a true value price so that customers have at least one point of reference. This is a small step towards transparency and standardization of a market which operates in the Stone Age, whereas the consumer has moved into the 21st century.
We believe that companies across industries will have to move towards organized, transparent and standardized buying processes in order to woo millennial customers. Apart from just providing the lowest costs, companies will have to provide a differentiated service experience in order to retain customers in a cut-throat market.
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