MUMBAI: The musical instrument (MI) business is a small but vibrant segment of the industry. The MI segment is pegged to grow at 12-15 per cent in the next 2-3 years and become Rs 500 crores by 2017.
The segment is characterized by a handful of well-known names like Furtados and Bhargavas and a host of other similar stores stock a whole gamut of musical instruments. These (usually) family- initiated stores that dot the cities and smaller town around the country have served music lovers a means to channelize their creative urges for generations.
Before the mid-90s’, when foreign brands were out of reach for most, these stores provided musicians and beginners with affordable guitars albeit ones that left much to be desired in terms of finish and quality.
Radioandmusic.com gets readers an inside story of one such MI store. Located in the busy eastern suburb of Vigyan Vihar in Delhi, ‘Arvind Music Hub’, opened in April 2011, has already attracted a sizable local clientele.
“Initially we used to sell only western musical instruments like guitars (both acoustic and electric),keyboards, synthesizers, drum sets, violins, pianos and their accessories with pro-audio equipment like amplifiers, pedals, processors,” owner Arvind Nagpal said.
Initially, people were excited at having a music store in their locality.
“Initially a lot of customers used to just check out our shop as they were excited at having a music store in their vicinity. But as the word spread and due to advertising, serious customers started coming. The first few months were tough and sales were discouraging but later it started picking up.”
People who had earlier gone to Lajpat Nagar and Darya Ganj- two centres to buy MI- started going to Nagpal’s store because of the ease and convenience, and his extensive range of instruments.
Prices in these areas are not significantly less than shops in other areas as the retailers are all dealers and buying from companies or their authorized distributors. In branded products, the difference in price varies as per the discount the retailer gives to the consumer from time to time.
“As such there is no fixed business model as a norm but varies from company to company. Ideally they want decent sales and timely payment as agreed upon, if they give you credit. We also learnt during the course of business a lot of other items that the customer used to ask for like mixers, midi keyboards, monitor speakers, microphones, headphones and DJ equipment,” he pointed out.
Following the local populace’s gravitation towards his store, Nagpal increased his stock of instruments and brands to meet demand- his line which was dominated by Furtados was expanded quickly to include popular brands like Kaps, GB&A, Jimm, Yamaha, Fender and Ibanez. Nagpal also became authorized dealer for Casio, Yamaha, Korg and Roland, for keyboards and synthesizers.
Sales of Arvind Music Hub are driven by two verticals; sales of imported western musical instruments which account for over 80 percent of sales. Indian products account for the rest.
In this segment, demand for foreign made instruments (especially in western musical instruments) far outweighs demand for Indian instruments, as most of the brands are manufactured outside India and then imported.
There are few Indian brands when it comes to guitars notably ‘Givson’ and the quality of the imported instruments is superior as compared to the Indian ones and so are the prices. Contrary to perception in the musical industry, Chinese goods are (also) better in quality and more expensive than Indian goods, especially in guitars and keyboards. Most of the foreign brands like Yamaha, Fender and other known brands have their set ups in South East Asian countries and around China.
Another sales driver is the Indian musical instrument- almost all derived from Indian made instruments. In the Indian instruments like harmonium, sitar, tabla etc are basically all made in India.
Nagpal’s core clients are young students from schools and colleges and executives who still have passion for music.
Setting up a showroom is however a little more than stacking the place with guitars, amps, gadgets and expecting them to fly off the shelves. It involves getting the interior designing right, finding the right suppliers, stock selection, choosing your staff and like all retail business location is of paramount importance in terms of visibility, surrounding areas, accessibility for clients.
“Setting up a musical is a viable proposition- no special licenses are required to run a musical store just sales tax registration certificate-but it takes a lot of time, at least 2-3 yrs- and patience to recover your cost. Plus it’s difficult to match the variety and service of the established players in the industry but slowly you learn,” Nagpal said.
A challenge that MI stores face collectively is the import duty and VAT that can price a product out of reach of customers.
I think the government should reduce Import duty and VAT on imported instruments and also should encourage foreign brands to set up manufacturing base in India so that the prices are not directly affected by import duty and the ever depreciating rupee, which will make it affordable for most Indians to buy western musical instruments, plus India can become a hub for exporting instruments especially in our region and the middle east who now buy from China and other south east Asian countries.”