The opportunity in the business of designer fans is huge provided one keeps coming up with new designs. Here is what a new player should keep in mind before entering this segment
Fans in their stylish avatars are no longer three-winged utility items. They have been transformed into intricately designed, multi-winged art pieces, thanks to a handful of entrepreneurs who are making a good business out of it.
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| Photo: Anemos |
For Nipun Aggarwal, the idea of designer fans came up when he was renovating his house in 2003. “I was looking for different ceiling fans and nothing great was available in the market,” he says. As Aggarwal was already in the business of wooden floorings and furnishings, he decided to launch designer fans under the brand name Anemos. But the beginning was not at all smooth for Aggarwal. “Once we tied up with suppliers of such fans, we started marketing them to dealers. To our surprise, no one was interested in selling the product, citing high prices. It was then that we decided to go to the market under our own brand name, Anemos,” he signs. Today, the brand is sold through four showrooms in Mumbai, Delhi, Gurgaon, and Ahmedabad, and Aggarwal expects the business to grow 50% annually over the next five years.
Another player, Prateek Kumar Sah, of The Fan Studio, has a similar story to tell, “We have been manufacturing standard fans since 1955. My father Shishir Kumar Sah, the designer of the Sangati range of fans, thought of adding a design element to his fans as he saw a large void in this market. And thus we came up with The Fan Studio in 2007.” It was started with an investment of around Rs 15 lakh, a large part of which was spent on getting a good showroom in an upmarket area of Gurgaon. The rest was spent on decoration of the showroom and marketing campaigns. Today, The Fan Studio is planning to spread its retail stores to all major metros, and is looking for franchisees.
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Besides the small players, this business has also aroused a lot of interest among the big fish in the domestic fans market. Khaitan, Bajaj, and Usha have already taken initiatives to tap the opportunity. In 2007, Khaitan launched its first Khaitan Fantasy retail outlet to sell designer fans, priced between Rs 7,000 and Rs 1 lakh. At around the same time, Usha International strengthened its tie-up with the US-based Hunter Fan Company to launch the Usha Hunter collection, priced somewhere between Rs 10,000 and Rs 40,000.
The business
The market for designer fans is still in a nascent stage in India. Unlike ordinary fans, designer fans, being luxury rather than utility items, are lifestyle products with a well-defined target customers. The luxury factor also makes this a low-volume, high-price business that is non-seasonal.
One of the reasons for the rise in demand for such fans is the increased spending on interior decoration. Explains Sah, “As times are changing, people are getting more design-conscious. They have a preference for antique artifacts and traditional handwork.” This is complemented by the rising income levels that gives the consumer that extra bit to spend on luxury and designer items. According to an estimate by consulting firm Technopak, in 2006 alone there were nearly 16 lakh households earning US $1 lakh or more a year and spending about US $9,000 annually on luxury items in India. This segment is expected to grow 14% annually. The increased spending potential, retail revolution, and international exposure have resulted in an increasing desire to buy luxury products, and consumers do not mind paying a premium for that. This is also getting reflected in demand for luxury fans in India, which is also witnessing an increase. According to Aggarwal, “From seven to eight models in January 2006, we are currently displaying 45 models. From paltry stocks and fans against order, we now have approximately 1,000 fans in our stock.”
| Entry barriers for new players |
| Niche market Presence of established players Innovative designs Marketing challenges Current economic slowdown |
What makes the business work?
Design: Design is the USP of this business and players constantly have to experiment with designs and materials to create innovative models and ranges. For example, The Fan Studio has come out with the Classic and the Contemporary ranges. “The Classic range has hand work all over the fan body using different styles and materials,” says Sah. “In the Contemporary range, we have kept very austere designs with finishes like chrome, brushed aluminum, etc. We also have fans made of modern materials like Stainless Steel 316 (Marine Grade).” On the other hand, Anemos has experimented with the blades (some designs have single blade while others have numerous blades), lighting (from direct to subtle and diffused lighting), etc.
What is the inspiration behind these designs? “Anything can serve as an inspiration—a crumpled piece of paper, a work of art, a beautiful tea set—anything. High design has a lot to do with art and I think that it’s important to train oneself to look at the world through an artist’s eye. I regularly expose myself to unusual experiences, attending museums, shows and traveling.” says Mark Gajewski of G Squared Art, an international player in the designer fans business.
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