Intense competition in high-end furniture market

Intense competition in high-end furniture market

Burhanuddin Abe, Contributor, Jakarta

Furniture nowadays is regarded as something that is more than
merely functional in nature. The trend is now moving in the
direction of branded furniture with high quality and elegant,
classy designs. Even local brands have created their own
respectable niches.

Da Vinci, for example, is now the favorite furniture brand of
the rich and famous in Indonesia, and remains the dream of those
who cannot afford its price, which range between tens of millions
and hundreds of millions of rupiah.

Established in Indonesia on Jan., 1995, PT Davincindo started
marketing Da Vinci furniture from its shop in the Duta Merlin
shopping complex in Central Jakarta. Within a couple of years,
the business was flourishing and further branches were opened by
the owner, Tony Vuagh, in Fatmawati and Melawai, South Jakarta,
as well as in Tanah Abang in Central Jakarta.

Currently, the company owns a 32-story building on Jl.
Jenderal Sudirman in the "Golden Triangle" business district of
Jakarta. The towering building houses not only the company's main
showroom but also 40 exclusively designed apartments. Rhenald
Kasali, one of the country's best known marketing experts and a
senior lecturer at the University of Indonesia, said that the
company's steady progress was due to its focused marketing.

"Though having a limited number of customers, they focus on
the niches with the most potential," he said. Another of the
company's strengths is the personalized service and after-sales
service it offers for its high quality, original, imported
furniture. It also provides its customers with interior-design
consultancy services.

Da Vinci sells imported furniture from various countries. From
the United States come such renowned brands as Thomasville,
Henredon, Jeffco, Ferguson and Copeland, while from Italy they
offer Natuzzi, Gasperini, Cappelletti and Turri. And then there
are famous furniture brands like Vidal Grau, Mariner, Vincente
Zaragoza and Movi, for example, from Spain.

In the past few years, local brands bearing foreign sounding
names have flooded the market. Among those offering contemporary
design are Aesthetica, Moye, Vinoti Living, Floral Home, Milenia
and Chantique. Meanwhile, local brands like Sari Karya Furniture
and Kin Furniture have adopted the classical style. Design- and
quality-wise, they have been accepted by the well-to-do, while
still being much cheaper than their imported counterparts.

Vinoti Living is one of the strong contenders in the furniture
business. The company behind the brand, PT Graha Vinoti
Kreasindo, was formed by architect Halistya Pramana. Vinoti
Living merchandiser and head of project division Viki Griffiths
said that the company was established 15 years ago and its brand
image started to grow popular ever since and further in the past
five years. During the starting period Vinoti Living concentrated
on office furniture, but due to consumer demand it had spread its
wings by offering quality household furniture in recent years.

With its original base of office-furniture customers, it has
been quite easy for the company to compete in the household
furniture sector. Apart from word-of-mouth recommendations,
Vinoti has conducted aggressive advertising and promotion
campaigns using various media. The annual promotion budget is set
at more than Rp 400 million (about US$47,000). Vinoti also
participates in house-and-home exhibitions and shows.

With its minimalist designs, Vinoti's products cost less than
the sort of classical items produced by famous local producers.
And its price tags are normally only less than half those of the
imported brands.

From its 8000-square meter plant in Cikarang, West Java,
Vinoti which employs about 600 employees -- almost every three
months -- launches new designs or rework earlier products. Their
range of products cater to every need in the office and household
furniture markets.

While in 1999 the company owned only one showroom, in the
Plaza Senayan mall, South Jakarta, today it has four in Jakarta,
and one each in Bandung, Surabaya, Bali and Singapore. It also
has an affiliated wholesaler in the United States.

Vinoti outlets seal between 30 and 40 transactions per shop
per day, and the total number of items sold normally run to about
2,000. Even in the "quietest" months, at least 50 Vinoti beds are
sold.

Reeza Budhisurya, the owner of Pernique furniture gallery in
Kemang, South Jakarta, said that undoubtedly local brands had
started to dominate the contemporary style category due to their
equally good quality, design and finishing. Reeza, who has
designed the interior of a number of hotels in Jakarta and Bali,
said the minimalist design produced by local players is on a par
with that of the world's leading manufacturers. Local players, he
said, also incorporated a total-interior-package in the sale of
their products, including accessories, works of art, handicrafts,
and exquisite tables and chairs. "They provide added value, which
really increases sales," he said.

Next to Vinoti Living, the other two furniture giants, Moye
and Milenia, are also strong contenders in the furniture business
and are brands that have to be reckoned with in this increasingly
competitive business. Another "specialist" is Aesthetica.

Established in 1998, Aesthetica made its name with exclusive
products for the creme de la creme. With a 4,000-square-meter
plant in Gunungputeri, Bogor, West Java, that employs some 400
people, Aesthetica imports most of its raw materials from Canada
and the United States to ensure the high quality of its products.

Aesthetica furniture was initially marketed personally by the
firm's owner to star-rated hotels in the country. Each
transaction involved between three and four billion rupiah. The
company also operates out of its sales-cum-showroom center in
Plaza Senayan mall, South Jakarta.

Aesthetica in recent years has been expanding its scope to
include the household furniture market. Besides furniture,
Aesthetica also provides interior-design consultancy services as
well as such things as matching floor and wall tiles. Some of its
products are understandably costly, not only due to their high
quality, but also the fact that most are made to order.

Competition in the furniture business involves a never ending
battle. Like the owner of Aesthetica said, the size of his
business today is much reduced compared to what it was four years
ago. Margins are also smaller. Probably this is due to the large
number of brands available, both imported and local -- all
fighting it out to grab a share of the market. Which, of course,
is where the survival of the fittest becomes the name of the
game.

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