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11.02.2018
The Market Lived. The Market Is Alive. Will the Market Live?

REFLECTIONS ON THE DEVELOPMENT PROSPECTS OF THE UKRAINIAN INTERIOR MARKET. WITH THE HOPE OF OVERCOMING THE CRISIS.

The company where I work has been engaged in the interior business for 23 years; it has been completing private and public interiors with furniture and home furnishings. Thanks to this, I have an excellent opportunity to observe, analyze, raise questions, try to comprehend what is happening in this area. And to make predictions: sometimes positive, and sometimes … how it turns out.

I remember the “dashing nineties”, we just started. It was a fun time. Nobody knew anything and did not understand anything. Both sellers and buyers who grew up in the era of the Soviet shortage and who had no idea what was happening in the world of interior design were ready to sell and buy any beauty, if only it was different from the “beauty” of the Soviet period. Most people were guided by their own taste. They wanted it to be chic and “rich”: more monograms, more gloss and brilliant gilding (isn’t it beautiful?). By the way, some Italian factories made good money on this, opening special workshops that worked only for the countries of the former Soviet Union. They made all this trash, plastered with furniture paper and plastic decor and varnished to a mirror shine.

There were other players in the emerging market who tried to understand trends and branding. True, we all did not know such words then, but we felt that there was something right in it. Those who wanted to be learned quickly – both sellers and buyers. As a result, in the late 1990s, the first high brands appeared on the market: B&B Italia, Giorgetti, Ligne Roset, Rolf Benz, bulthaup. Interior leaders entered the market slowly, cautiously: the market seemed to be growing, but only a narrow segment was understanding the product. It was almost impossible to explain to the client with money, but without the background (and there were most of them then) why inconspicuous bed by Antonio Citterio costs as a one-room apartment in suburbs. And so it was.

Furniture branding is generally a delicate matter, it is difficult for a non-expert to figure it out. Another thing is Mercedes-Benz, Audi, Chanel, Dolce & Gabbana, Rolex. It was prestigious and cool to possess products of these brands. Nothing needed to be explained here: Rolex is Rolex. Everything was different in the interior market. The market needed to be formed and educated, to introduce brands that have long been known in the West, in a new territory for them. But surprisingly, in this nascent and sometimes not very professional market, it was natural to buy furniture in the interior salon. Come, feel, sit, get information, maybe even go abroad after that and make sure that they buy it too, and then come to the salon and order. Bargain, of course, but to buy in the salon, and not from the “girl” who sits in a room with two dozen catalogs.

It was the right thing to buy in the store, while in the “basement” from some “girl”- well, so-so (unreliable, undervalued, as if you have no money to buy in a beautiful salon). And this situation has developed the market. New stores opened, new brands appeared on the market, and competition grew. The owners of interior salons invested money in business development, tried to surprise with new items and interior space, trained staff from Western partners, worked on improving the service. And the service in the interior business is quite a difficult thing. The interior business is rather a service and commodity business, and not just a commodity one. Yes, we all buy goods as a result: sofas, beds, doors, wardrobes, carpets, kitchens and lamps. But… Only a little bit of all this is bought directly from the store, most of it should be ordered from manufacturers, and before that these items need to be “written on paper”: design, specify, choose finishes and do many more different works to turn the order into a product. The end result depends largely on the quality of this service part. What is surprising, then, with an immature market, buyers understood this better than today. And this understanding developed the market as well, gave it the opportunity to grow, expand the offer, develop the service, improve the quality of the product. When good, high-quality service is in demand in the market, it inevitably appears and lives there. While it is needed, while we are ready for it to pay. Not overpay, but pay.

The situation began to change during the 2008 crisis. Many interior salons could not cope with the crisis, they were closed. “Stores in basements” have flourished – those very rooms in office centers where girls or boys with catalogs sit and are ready to sell everything for minimal money. Former employees of the bankrupt companies came work to such “basements”. How to interest a client, having nothing but a small office with a bunch of catalogs? Of course, with a price! The main idea of such businesses was minimum prices with minimum investments. The plan is very simple: first, the client goes to the salon, where he is assisted with the selection of design, and when the specification is ready, he “announces a tender”, goes to the “basement” and buys there for a lower price. The client is satisfied, the “basement” is satisfied, but the fact that the service provided – assistance in choosing, designing, specifying, etc. – has remained unpaid, it does not matter for him. Nothing personal just business. We are not talking now about the moral side of this question, this is not the topic of my thoughts.

What is today? Compared with the crisis of 2008, the situation has only worsened. The idea of investing a minimum in a business and giving the lowest price is gaining popularity. This is understandable and explainable: the market has fallen, there is less money, everyone wants to buy cheap. Quality and reliability is not a priority today, only the price is important. This is always the case in poor markets, and this is exactly how it is in Ukraine today.

What can this lead to? It’s very simple: if you refuse to pay for quality service, it will simply disappear from the market. It is the unbreakable genre rule. It looks like we’ll go back to the beginning of the 1990s when you had to go abroad to buy designer furniture or interior items. Then it was not yet in Ukraine, but now it may not be, because the client does not want to pay for it. Well, or can not.

Am I exaggerating? Maybe. And yet I hope… I hope that after having been tested by the low price, poor service, high risk of not receiving goods or receiving not what was ordered, there will be a desire to re-establish normal relations between the buyer and the seller in the Ukrainian interior market, as well as understanding that you need to pay for the quality service. Not overpay, but pay.

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