Royaloak Furniture, which opened its first store in Bengaluru in 2010, is targeting the launch of its 300th store in India by March 2025. An equal mix of owned and franchised stores, the physical outlets contribute 95 pc of the brand’s sales today, says Vijay Subramaniam, the company’s Founder and Chairman. According to the company, its topline is in the region of Rs.1,000 cr and it has around 160 outlets currently across 150 Indian cities and towns.
The focus is to expand into more tier 2 and 3 markets and also expand internationally, says Subramaniam, in conversation with BrandSutra.
“We will keep opening four to five stores a month and expanding to all the tier two and three cities. Now we are expanding not only in India but also the international market. We are exporting to seven countries now, and will be increasing it to more,” says the Founder-Chairman.
The company started exports in 2022 and had revealed a target of realising 25 pc of its revenue from exports in three years. The latest market it has forayed into is Libya.
Online Sales and Trends
The brand, which started selling online only during the Covid pandemic, sees the online share going up to 15 pc in two to three years, from 5 pc currently.
The offline ticket size, at Rs.55,000, towers over its online counterpart that stands at Rs.10,000.
“Usually online sales are more in entry-level products. You will see all the entry-level price point products will sell online. The mid-segment and premium products would sell more in offline stores,” explains Subramaniam.
The entry level for Royaloak is Rs.8,000 to 10,000 for beds, around Rs.10,000 for dining, Rs. 15,000 for a three-seater sofa and Rs.30,000 for a three-piece set. ,
There is a slight shift though from the entry level wares selling online to slightly more premium offerings, reveals the spokesperson.
“Earlier customers were only buying entry level products online; now they have started buying mid-level products online. Another trend is that they want to experience more. They are visualising their living room with our furniture, comparing how it looks, before coming to the store for a touch and feel of the products,” he adds.
International Products at Affordable Prices
Living room furniture is the single largest contributor to overall sales for Royaloak. The company sources products from 400 vendors in 30 countries. American, Malaysian, Turkish, Italian and (Indian) Emperor collections greet one on the website. The intent is to bring the latest and best selling products from across the world to Indian consumers at affordable prices and also export to the world, underlines the Founder-Chairman.
“Why does the customer buy from Royaloak?” poses Subramaniam, before offering an explanation. The company imports from those countries their fast-selling products and bringing those into India in real time, he reasons.
While the prices of Malaysian products are near affordable levels, American and Italian collections are ‘little premium’.
Is it financially viable for an import-driven model? Scale matters, explains the Chairman. “We are buying in large quantities. We are the biggest importer in India in the furniture industry. Because of our volume, we are able to get good prices and we are passing that onto our customers,” he adds.
Likewise, Indian furniture including those from Rajasthan find takers from abroad and also from India, via Royaloak.
Ad Budget and Profitability
For a company with a topline of Rs.1,000 cr, a declared monthly advertising budget of approximately Rs. 2 cr seems inadequate.
Subramaniam responds, “There are two ways to develop the business. Now the trend, which a majority of startup companies are following, is that they're burning money more and they are acquiring the customer faster. They want to build the brand faster. That is one way. Another is to continuously give a very good quality and international product at an affordable price to the customer. Treat the customer properly after that, give after sales service professionally. Automatically, the customer base will increase. And keep opening stores in every corner of the country in tier two and three cities and automatically you will grow. This is the approach we are following.”
He reasons that with this approach, the marketing budget suffices. It is split evenly between digital and other spends. Digital spends are not just to encourage online sales but also to lure customer walk-ins to stores. Royaloak as a brand is unlikely to splurge on celebrity endorsements or high profile sponsorships. That said, there is a sizeable allocation for digital marketing, notes the Chairman.
Besides retail expansion and exports, the company’s thrust this year will be on home decor, kitchen products and mattresses. The brand wants to bring more American and Italian lifestyle products and sell them – in every corner of the country – at affordable prices.