Furniture Outlook India 2020 |India Home Furniture Market

1
India Furniture Market Report 2020 Ken Research
2

• The furniture market in the country has been
  immensely driven by a substantial growth in the
  real estate, tourism and hospitality sector over
  the years. In FY2015, the furniture market in
  India clocked revenue worth INR billion which
  increased by from INR billion in FY2014.
  The furniture market has experienced a
  substantial growth in the last few years. There
  are several factors which have led to this growth
  such as surge in real estate and housing
  activity, increasing growth in the information
  technology and services sectors, growing
  affluence both in the urban and rural areas and
  higher proportion of middle class Indians
  aspiring for better lifestyle. Additionally, the
  import of furniture from countries such as China,
  Malaysia, Indonesia and Bangladesh is also being
  driven by the urban affluent households. The
  organized furniture market has been observed to
  grow from in FY2010 to in FY2015

3

• The establishment of MNCs in metropolitan cities
  in the country has also impelled the sales of
  office furniture, thereby aiding the overall
  market growth in the last few years The Office
  segment in the furniture market has garnered
  of the market revenues as observed in FY2015
  which is relatively smaller proportion of the
  furniture market in the country. Over of the
  office furniture is covered by contract furniture
  which is customized by various organized stores
  especially in big retail chains In FY2015, hotel
  furniture accounted for a share of in the
  overall sales of furniture in the country
  garnering revenues worth INR billion. The major
  reason for its low demand is that most of the
  furniture in offices, hotels, cafes and industry
  are contract furniture and this demand is majorly
  catered by unorganized sector while a minor share
  is also catered through customized furniture from
  organized retailers.

4

• The retail sales of home furniture products
  through organized retail outlets in India
  generated revenues of INR million in FY2015
  and represented a CAGR of during the period,
  FY2010-FY2015. Companies such as Godrej
  Interio, Home Center, Nilkamal, Durian Furniture,
  and Style Spa among others have grabbed
  significant positioning in the domestic organized
  home furniture market. In spite of the fact that
  of the furniture market belongs to the
  unorganized players, the growing western culture
  in the country coupled with increasing consumers
  preference for branded products have given a
  considerable surge to the branded furniture
  segment in the recent years. In order to cater to
  the mounting demand of branded furniture in
  India, the competition amongst the organized
  players has further intensified.

5

• The arrival of international brands from Italy,
  Germany, Sri Lanka and other countries has
  brought a change in consumer perception and has
  resulted in the purchase of more expensive
  furniture products, which have in turn propelled
  the overall revenues of the market. However, a
  large number of Indian citizens have still opted
  to purchase customized furniture from carpenters
  at highly competitive prices. The employment of
  on-site carpenters has provided Indian customers
  with the flexibility to customize design, wood
  material and make any modifications to the
  product as necessary at their comfort. The growth
  of the organized home furniture industry has
  played a key role in the development of the
  overall furniture market in India. The future of
  this industry has been expected to witness an
  increase in number of foreign brands in the
  country.

6

• Along with that, more number of companies in the
  organized segment will look forward to provide
  additional services such as customization, free
  home delivery and more. Moreover, with the
  substantial growth of the Indian e-commerce
  industry, many players have entered the online
  market for the sale of furniture products.
  Companies such as Pepperfry, Urban Ladder and
  Fabfurnish have revolutionized the sale of home
  furniture products in India by not only providing
  significant discounts but also through value
  added services such as free product demos,
  customizations, complete home solutions and
  others. Bedroom furniture held of the total
  revenue of home furniture market in India, as
  recorded in FY2015. Bedroom furniture has stood
  as the highest revenue-generating segment as
  furniture items placed in bedroom have been the
  utmost priority for Indian customers.

7

• The living room furniture was the second most
  important choice as it garnered share in
  revenues for the year FY2015. This segment
  encompasses a wide range of coffee tables, sofas,
  center tables, corner tables, chairs,
  bookshelves, TV stands, ottomans, display
  cabinets, consoles and upholstered furniture like
  sofas and overstuffed chairs. Sofas have been the
  highest selling product in the living room as
  they are the primary items to be placed in the
  living room. They accounted for share of the
  living room furniture market.The dining room
  furniture also includes other items such as bar
  stools, sideboard cabinets, serving carts and
  wine storage units. This segment accounted for a
  revenue share of in the home furniture market
  in FY2015. The average selling price of a dining
  set in a branded showroom is usually in the range
  of INR 35,000 to INR 70,000.

8

• The demand of modular kitchen has bolstered the
  total sales in the market from INR million in
  the year FY2010 to INR million in the FY2015.
  In the year FY2015, nearly 85 of this market
  was governed by the unorganized Johnson
  summarized of the market in terms of revenues
  sector, whereas big players such as Sleek and
  HR. Sale of home furniture in the western region
  of India was observed to be the highest at due
  to the high demand of solid wood. The Indian
  market for home furniture products has observed a
  varied/mixed demand from different income
  classes. The upper class of the Indian society
  has considered cost as a secondary factor and has
  laid emphasis on design and durability of the
  product.

9

• In House Manufacturing Model The operations in
  domestic manufacturing of furniture in India can
  be divided into 2 basic forms, namely, make to
  order and bulk manufacturing. The raw
  materials can be obtained either through the
  local market or through imports from Malaysia,
  Indonesia or China. After procurement of raw
  materials from timber suppliers, the furniture
  manufacturer develops the designs and produces
  the product based on the customer requirement.
  The manufacturer though pays the cost of
  transportation of furniture but transfers it to
  the customer by including it in the final bill of
  purchase.

10

• The requirement is routed to the manufacturer
  through exclusive, franchise or dealer stores.
  These stores retain a gross profit margin of
  and respectively. The wholesalers keep a gross
  profit margin of to cover their costs and sell
  furniture products to a wide range of dealers.
  One of the major draw backs of selling through an
  in-house manufacturing business model in the home
  furniture market is the higher cost of production
  in comparison to imports. Heightened labor
  expenses, raw material costs and operating costs
  in India have reflected higher prices of
  products in comparison to imports from countries
  such as China and Indonesia. Import Based Model
  Import of furniture products has been observed
  significantly in the Indian market. The presence
  of large number of dealers and traders has been
  largely due to the higher fees obtained through
  trading of furniture items in comparison to
  domestic manufacturing. The payment can also be
  taken in installments importers generally pay
  of the total cost at the time of order placement
  and transfer the remaining amount at the time of
  shipment.

11

• The importer charge a margin of , who sips the
  product to the retailer or the exclusive stores
  which further charges a margin of on the
  furniture products. The major drawback of this
  business model is the high turn-around time. In
  case the required piece is not available with the
  furniture dealer/ supplier, it can take
  significant amount of time (several weeks) to
  import it from the source country. This would
  lead to loss of customer interest in the product
  and hence create loss in sales. Moreover, this
  model also possesses a higher risk of furniture
  damage during transportation as products have to
  be delivered through different means (sea and
  land) and require multiple loading and
  off-loading points.

12

• Online Marketplace Model Market place business
  model enables the third party retailers to sell
  and advertise their products on an online
  platform. It has gained its prominence during the
  last few years majorly since the refurbishment of
  ecommerce sector in India. The online portal
  further develops sync with the merchant by means
  of an agreement on partnership, assessment and
  operation model. The product is then sent to the
  market place that acts as a storage place/
  inventory.T he B2B2C Model is useful in the case
  when merchants are located in different regions
  and come together to form an online virtual
  shopping mall. The major profit sources include
  fixed fees from merchants and price charged from
  transaction and additional services.

13

• In order to establish a furniture manufacturing
  unit in Chakan, Pune, India, there are several
  parameters that need to be considered. Pune has
  been selected as prime location due to its
  central geographical presence and presence of a
  strong industrial base. The usage of both manual
  labor and automated machinery has been most
  widely used in the industry. For the first year,
  the annual production capacity will be near to
  60. The factory floor has been divided in a
  specific proportion in order to facilitate easier
  flow of material and smooth operation. The
  quality of wood used to produce furniture is
  considered of high grade. Human resources have
  formed a critical aspect of every organization.
  In a furniture manufacturing unit, carpenters,
  machine men, polish men, CAD operators and other
  skilled laborers form a vital aspect to process
  wood either manually or through machinery.

14

• Childrens furniture has slowly gained its share
  in the Indian furniture market. The younger
  generation of parents has looked to provide the
  best surroundings for their children at home and
  have generated the demand of specialized
  childrens furniture items. These target groups
  not only have purchased individual furniture
  items, but have also looked to remodel their
  childs room to provide a unique look to their
  room. With an average budget of INR 0.2 to 0.25
  million, these buyers have showcased a mixed
  demand of theme based and non-theme based
  furniture. The overall childrens furniture
  market in India has been observed to grow at a
  CAGR of during FY2010-FY2015 and reached INR
  million in FY2015. This has represented of
  the overall furniture market. Beds and wardrobes
  have been the major products sold in the India
  Childrens furniture market. These two products
  were observed as the most essential products
  purchased by parents.

15

• The mattress market of India has been dominated
  by small and unorganized players which cater to
  nearly of the overall requirement of
  mattresses in the country. The major types of
  mattresses observed in the Indian market include,
  spring, coir, foam and hybrid mattresses. The
  market has been dominated by domestic brands such
  as Kurlon, Sleepwell, Springfit and Nilkamal.
  However, the gradual influx of foreign mattress
  brands such as Tempur and King Koil has
  heightened the competition in the market. The
  revenues generated by retail sales of mattress in
  India amounted to INR million in the year
  FY2015. The popularity of spring mattresses has
  increased over the years as more companies have
  begun to provide springs which cater to varied
  requirements of customers. Coir mattresses were
  followed by spring mattresses which held a share
  of . South India has been considered as a
  production hub of coir mattresses, particularly
  rubberized coir mattresses. The customers in this
  region have been early adopters of good quality
  products and have been shifting towards spring
  mattresses.

16

• The organized home furniture market encompasses
  numerous numbers of players and hence the market
  has been witnessed as highky fragmented. The
  market is moving more towards organised segment.
  This is marked by increasing customer preference
  for readymade, branded furniture. Therefore, the
  share of organized players in the market has been
  observed to grow but still major six players have
  commanded 8 share in the organized home
  furniture market. Style Spa has commanded
  share in the organized home furniture market,
  with revenues worth INR million in FY2015. The
  company had 115 retail stores as on March 31st
  2015.

17

• In order to strengthen their position in the
  market, offline retailers have begun to expand to
  tier-2 and tier-3 stores and have continuously
  updated their product catalogues with new designs
  at cost-effective pricing. These retailers have
  also provided customers free demonstrations of
  re-modeling of their home space through
  consultations with in-house furniture designers/
  experts. The residential real estate market has
  witnessed balanced growth in the last couple of
  years owing to the increasing population and
  growing demand for affordable housing
  accommodation. Major metropolitan cities such as
  Delhi, Mumbai, Kolkata and others have also
  showcased growing demand for luxury housing
  complex such as villas, penthouses and apartments
  in the recent years.

18

• Source https//www.kenresearch.com/consumer-prod
  ucts-and-retail/home-and-office-furnishings/india-
  furniture-market-research-report/8520-95.html
•  Contact Ken ResearchAnkur
  Gupta, Head Marketing CommunicationsAnkur_at_kenre
  search.com91-9015378249
• Website www.kenresearch.com

19
Thank You