At present, India is the world’s 14th-largest furniture market, with the sector said to be worth some US$17.9 billion in 2015. In the same year, a total of 10,476 importers were engaged in shipping furniture to India, with Italy, Germany, Spain, China, Korea, Malaysia, Indonesia, the Philippines and Japan the primary sources for such items.
In 2016, with 75,930 tonnes, China was the largest single source of India’s imports of furniture and home furnishings. In second place was Malaysia with 13,004 tonnes, while Italy took third with 9,441 tonnes.
Overall, furniture imports from China, in particular, are seen as only likely to rise. This is largely because such items are highly-regarded by importers for their competitive pricing, which frequently even undercuts that of locally produced alternatives.
The furniture sector in India makes a marginal contribution to the Gross Domestic Product (GDP), representing about 0.5 percent of the total GDP. The major part of this industry, approximately 85 percent is in the unorganised sector. The remaining 15 per cent comprises of large manufacturers, such as, Godrej & Boyce Manufacturing Co. Ltd., BP Ergo, Featherlite, Haworth, Style Spa, Yantra, Renaissance, Millennium Lifestyles, Durian, Kian, Tangent, Furniture Concepts, Furniturewala, Zuari, Truzo, N R Jasani & Company, V3 Engineers, PSL Modular Furniture, etc.
Furniture Industry Composition
As with the global market, home furniture is the largest segment in the Indian furniture market, accounting for about 65 percent of furniture sales. This is followed by, the office furniture segment with a 20 percent share and the contract segment, accounting for the remaining 15 percent.
Home furniture in India is available in a wide range, to cater to different customer needs. A typical middle class urban Indian home has five rooms (including kitchen and bathroom). About 25 percent of the urban population live in homes with five rooms or more, while 45 percent live in houses with three rooms or less. About 16 percent is estimated to live in single-room homes. The type of furniture used depends on the customer’s affluence and taste. The rich and upper middle class is typically very attentive to design and quality, so price is rarely a determining factor. In general, European style furniture is only found in homes of the urban upper class. Demand for furniture of international standards is limited to the larger cities. It is also estimated that the wealthier classes do not change furniture very frequently; the average life of a piece of furniture is about 20 years and some craftsmen’s pieces are used for as long as 50-70 years. Colonial furniture is still very common in India, but the trend seems to be declining slowly.
The office furniture segment caters to the commercial and office space. This segment has witnessed rapid growth in recent years, in line with the growth in the Indian economy and subsequent demand for office space. The thrust on real estate and office construction is expected to sustain in the near future, indicating continued growth for the furniture industry.
India is also one of the largest importers of office furniture, with the country accounting for just under one-fifth of global imports in the sector. In total, office furniture accounts for 20% of the country’s furniture sales, with the expansion of the sector having been driven by the country’s increasing number of domestic clerical businesses, overseas-invested companies and technology parks. The growing popularity of B2B e-commerce platforms has also contributed to the rise in import levels in this sector.
The contract segment caters primarily to hotels and its growth is consequently linked to growth in tourism and development of new hotels. There are around 1,200 hotels in India in the organized sector. More than 10 percent of these are in the 5-star and above categories.
Materials used for furniture
Various types of raw materials are used for furniture making in India. The key raw materials include wood, metal and plastic, with bamboo and cane also being used in some cases. Wood accounts for nearly 65 percent of all furniture made in India. This includes several types of indigenous wood (Walnut, Sandalwood, Teak, Sheesham, Deodar, Ebony, Redwood, Rosewood, Red Cedar, Rubber Wood and Sal), as well as imported wood (soft and hard wood). India imports wood from various South East Asian countries such as Indonesia, Malaysia and Myanmar. It also imports MDF (Medium Density Fibreboard) boards from Europe.
The furniture market is projected to cross $ 31 billion by 2024. It is growing at a rapid pace due to rising disposable income, expanding middle class and growing number of urban households. In addition, the anticipated rise in tourism and hospitality sectors is also expected to spur the furniture demand in the country. Western and Southern region would continue to be the leading revenue generators due to expanding distribution network of furniture manufacturers in these regions. Uttar Pradesh, Kerala, Punjab, West Bengal and Andhra Pradesh are the major suppliers of wood, which is the most widely used raw material in the country’s furniture market.
India furniture market stood at $ 21 billion in 2018 and is projected to grow to over $ 31 billion by 2024, exhibiting a CAGR of around 7% during 2019-2024, on account of growing real estate and hospitality industries. Other key factors expected to drive the market are increasing government investments in infrastructure development and rising demand for luxury and premium furniture from certain consumer sections. the anticipated rise in tourism and hospitality sectors is also expected to spur the furniture demand. Additionally, rising disposable income is influencing expenditure on comfortable lifestyle, which is expected to provide growth opportunities to furniture market players in the coming years.
The growth is driven by various attributes such as rising trend for modular and state of the art furniture among the population living in urban cities, growing urbanization in Indian states, rising demand for durable and hybrid seating furniture. Moreover, the rising growth of wood industry in India further compensates the price of furniture. On the back of these factors, the furniture industry is expected to propel in India. Further, the rising trend of online and mobile shopping in India is envisioned to bolster the demand for furniture through online channels.
Various furniture companies such as Pepperfry, Urban ladder and others are creating huge demand from these online channels. Apart from this, the demand for low cost plastic furniture is also increasing in commercial sector. The ease of business doing policies in India gives rise to new businesses across the country. In addition, these increasing numbers of small and medium businesses further boost the demand for low cost plastic furniture products.
Rapid urbanization in India and growing demand for modular and compact furniture is expected to positively impact the growth of furniture market in near future. Further, growing urbanization in Indian states such as Gujarat, Maharashtra, Tamil Nadu and others is supporting the culture of housing societies. Moreover, the corporate sector in India is uplifting on the back of ease of doing business reforms introduced by the government. These factors are believed to bolster the growth of India furniture market.
Further, growth of real estate sector in India is anticipated to boost the demand for modular furniture in urban areas in India. Apart from this, rising investment in retail sector by various national and international entities is anticipated to foster the growth of furniture market in India. Moreover, technological advancements such as availability of high speed internet networks such as 4G and spiked absorption of smart gadgets are boosting the e-retail sector in India. These advancements further provide ease to the customers to buy furniture through online channels. In addition, the rising number of smartphone users across the country and online shopping is encouraging the furniture industry players to introduce their products through online channels.
Apart from this, 100 percent FDI policy for townships and settlements development project is attracting more foreign investors in the real estate sector which increase the quality of residential apartments. Further, rising demand for high-end and western style furniture is envisioned to bolster the growth of India furniture market by the end of 2024.
However, the low cost furniture products offering by unorganized players further decrease the revenues of major market players in India. Further, the unorganized players sell their product through local shops which decreases the cost of branded furniture. The high cost of quality and durable furniture in India is the major restraint for furniture industry. The high cost of wood and leather further increase the cost of overall furniture product.
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