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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