Just as German kitchen giant Nobilia put the finishing touches to their Open House in September, KBB Review’s Tim Wallace spoke to Nobilia’s head of export, Matthias Keudel who says that “the UK market is like a pear…”
Nobilia has been growing every year for the last 20 years, so we didn’t really feel the global recession. We felt it in some markets but not overall.
Last year in Germany we grew at 6-7% and overall 13-14%. But certainly in the last couple of years some markets have been difficult. At the moment it’s eastern and south eastern Europe – Greece, Hungary and Rumania – and the Italian market isn’t easy although we’re actually growing there because of new customers. But whatever we lose in some of those markets we can by far offset with growth in other markets.
Where are the big growth opportunities?
China is very interesting for us. We are now number three in the Chinese market, one and two being local players. We are the largest importer of german kitchens into China. We do huge projects, we’ve done one project for 4,900 kitchens, all installed within four months.
It’s really a huge volume market and it’s become very important for us. So that’s the big growth factor, but Brazil and India? Not really. Russia yes, it’s interesting for us but not the most interesting. Most of our export still goes to the countries round Germany – especially France where we’ve had a lot of growth in the last few years.
Do you find it surprising that Nobilia has continued to grow in a tough climate?
Yes, it’s surprising but where Nobilia is very strong is in value for money. In boom times everybody can sell, but in difficult times only the good ones can sell. In difficult times there’s a lot of change in the market and if you have a good offer you might be able to grow with new customers. That’s what’s happening in a lot of markets like Spain for example.
How much has your UK market been affected by the downturn?
Certainly the contract market was hit. Since the downturn we’ve lost 50% but we gained part of it back. In the London area business is very good, that’s always been where the majority of our contract business is based, but outside it’s almost non existent.
But retail wise we’re doing fine. We only started our UK retail activities in the last five years so there’s a lot of growth in there. We want to be in the middle of the market with the best value for money, that’s how we’ve achieved our 30% market share in Germany for example.
The UK market is certainly the market in Europe with the highest potential for our product. British people like Germany quality. Our problem in the past was that we had to find the right partners, we’ve now found them.
Are you feeling the effects of the mid-market squeeze?
I see it totally differently. From our perspective the mid market doesn’t really exist in England. To us, there’s a cheap flat pack low spec market which is huge – Wickes, Ikea, B&Q, Homebase, not the best quality. Then you have exclusive studios that sell you a German product for £20-30,000.
There’s a market in the middle with players like Magnet but it’s not as big. So if you look at the German market, it’s like an onion, the biggest is in the middle, but the British market is more like an egg timer or a pear with the biggest part at the bottom. So from our perspective the mid market never existed.
There are no multiple chains in the middle market. And in the bottom of the market the competition is purely on price so nobody makes any money.
Appliances are a much bigger part of a customer’s budget these days. Has that affected you?
We have an opposite trend, we sell the kitchen together with the appliance, it’s part of our business. because we have a good relationship with companies like BSH and Electrolux and we have the volume they give us private label. Certain appliance brands you can only get through Nobilia. Not many players have the volume to do that though.
Any observations from the show?
Most of the stands are dark, ours is bright and white. Most of the other are closed off, we open ours up and say, ‘please come in’. Most of the kitchens at the show are over-designed, a lot of the Italian brands do that. Italians are known for the design and the Germans for quality. We try to show kitchens that you can actually sell to a customer.