Furniture Industry

Global Furniture Market The global furniture market can be broadly categorizes into four categories – domestic furniture, office/corporate furniture, hotel furniture and furniture parts. Globally, domestic furniture accounts for 65 per cent of the production value, whilst corporate/office furniture represents 15 per cent, hotel furniture 15 per cent and furniture parts 5 per cent. 1. Indian Furniture Industry As of 2006, the Indian furniture market is estimated to be worth IIS$ 7,922 million.

Of this, wooden furniture accounts for IIS$ 1,358 million. About 11 per cent (IIS$ 152 lion) of this (wooden furniture) is imported and imports are growing at 50 to 60 per cent every year. India was the largest furniture importer in the world in 2004-05, with a 17 per cent share in the furniture imports worldwide. The furniture sector in India makes a marginal contribution to the Gross Domestic Product (GAP), representing about 0. 5 per cent of the total GAP. The major part of this industry, approximately 85 per cent is in the unrevised sector.

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!

order now

The range of indigenous furniture available in India, includes both residential and contract system furniture. Manufacturers in India usually use a three-tier selling and distribution structure, comprising of the distributor, wholesaler and retailer. 1. 1 Furniture Industry Composition: As with the global market, home furniture is the largest segment in the Indian furniture market, accounting for about 65 per cent of furniture sales. This is followed by, the office furniture segment with a 20 per cent share and the contract segment, accounting for the remaining 15 per cent. ) Home furniture Home furniture in India is available in a wide range, to cater to different customer needs. The type of the furniture used depends on the customer’s affluence and taste. 2) Office furniture 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. 3) Contract segment The contract segment caters primarily to hotels and its growth is consequently linked to growth in tourism and development of new hotels. . 2 Furniture Industry – Value Chain: The Indian furniture industry covers the entire gamut of activities, from sourcing, manufacturing and distribution, to sales and after sales. The key raw materials used for furniture making include wood, metal and plastic, with bamboo and cane also being used in some cases. Wood accounts for nearly 65 per cent of all furniture made in India. This includes several types of indigenous wood, as well as imported wood. Wood: India abounds in several tree species whose wood is used for furniture making.

Apart from indigenous material available in India, some types of wood are Furniture Industry By sharers-keg in India include Walnut, Sandalwood, Teak, Sheehan, Dear, Ebony, Redwood, Rosewood, Red Cedar and Sal. India is one of the largest consumers of wood in South East Asia. The country has sufficient availability of tropical wood, however, in recent years, growing concerns about the environment and the need for conservation of forests have led to reduction in the supply of wood. 1. 2. 1 Distribution Indian furniture companies operate both, through direct selling in the market and distributors.

Companies with a large local customer base normally sell directly, without involving distributors. The larger companies typically have their own commercial offices and showrooms in all the larger cities in India. . 2. 2 Retailers There are a large number of furniture retailers and franchises spread across the country. While the majority of retailers are small in size and scale, large retailers usually operate in urban markets. With the rapidly growing and transforming retail sector, it is expected that the large retailers will continue to expand their presence, leading to consolidation in furniture retailing in urban markets. 1. 2. Consumers and Key Influences Three observations could be noted here: While decorating a new house: The buying decision is left to a builder/architect/ interior decorator or the owner While renovating a house: The buying decision is made by an interior designer or by the owner While furnishing a commercial complex: The buying decision is made by the builder/architect/interior designer Key Demand Drivers Changing consumer demographics Real estate/housing boom Tourism and hospitality industry growth Critical Success Factors for Furniture Manufacturers in India Good supply chain management Cost minimization Brand management Customization Key Take-Sways for Potential Investors Build the brand Understand the market Focus on the design