FURNITURE INDUSTRY

IN INDIA
INTRODUCTION
◦ The India Furniture Market is anticipated to reach USD 32.61 Billion by 2018 by registering a CAGR of 13.38% during the forecast
period i.e. 2018-2023. Moreover, the market is expected to garner USD 61.09 Billion by the end of 2023. Further, the India furniture
market is anticipated to achieve a Y-o-Y growth rate of 14.30% in 2023 as compared to the previous year.

◦ The technological advancements such as availability of high speed internet networks such as 4G and spiked absorption of smart gadgets
is 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.

◦ The players such as Pepperfry, Urban ladder and others are generating significant revenue through online platforms. Also, the rising
trend of online shopping is pushing the manufacturers like Godrej Furniture, Nilkamal etc., to introduce and sell there furniture
through online space. For instance, leading offline retailer of readymade furniture products named @Home, which is a flagship brand of
Nilkamal Pvt. Ltd, has launched its online shopping portal for the exclusive range of @Home furniture, furnishings and home d'cor
items.

◦ The wooden furniture is anticipated to continue its dominance during the forecast period in Indian furniture market and expected to grew
with a CAGR of 11.32% during the forecast period i.e. 2018-2023. Although, the growth of nuclear families, impact of western culture
has affected the demand for wood furniture and changing taste and preferences for different king of furniture is pushing the growth of
market and interest of customers is diverting towards using different material like leather and glass and making them a lucrative segment
in the coming future.
◦ The India Furniture market is further segmented by sector into residential and commercial. Residential segment accounted for
USD 20.65 billion in 2018. Further, India residential furniture market is expected to grow at a CAGR of 14.16% over the
forecast period i.e. 2018-2023. Moreover, the market of residential sector is expected to achieve Y-o-Y growth rate of 15.08%
in 2023 as compared to previous year.

◦ India is a country with a huge population of urban dwellers and the demand of furniture items from the urban houses is huge
and adding to the growth of furniture market from residential sector of India. There has been a significant growth in the real
estate sector based upon rising demand for residential property in the country along with the change of existing furniture from
the established ones.

◦ The India furniture market by commercial sector is anticipated to achieve a CAGR of 11.97% during the forecast period i.e.
2018-2023. Commercial sector is further sub-segmented into non contracting and contracting. Non Contracting segment in
India is expected to grow at a CAGR of 13.32% over the forecast period i.e. 2018-2023 and expected to achieve Y-o-Y growth
rate of 14.17% in 2023 as compared to previous year.

◦ The demand of furniture have been observed to majorly generate from the northern and southern India. Southern region
continues to be the leading revenue generators during the forecast period i.e. 2018-2023 on account of expanding distribution
network of furniture manufacturers in the region. Kerala is among the major supplier of wood which is widely used raw
material in the country's furniture market. The region is anticipated to maintain its dominance by 2023.
THE POTENTIAL OF FURNITURE
MARKET IN INDIA
In FY’2015, the furniture market in India clocked revenue worth USD 19,833.0 million which increased by
17% from USD 16,951.3 million in FY’2014. 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. The furniture manufacturers in the country have increasingly catered to the urban
middle class requirement for stylish home in compact apartments. Additionally, the import of furniture
from countries such as China, Malaysia, Indonesia and Bangladesh is also being driven by the urban
affluent households.
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. The rising number of commercial projects along
with a greater spending on the infrastructure has also provided an enormous growth to the furniture
market in the last few years.
The market has grown from USD 13,972.9 million in FY’2012 to USD 15,185.4 million in FY’2013. The annual
revenue of Indian furniture market amounted to USD 12,949.2 million in the FY’2011, a double digit
growth of 26% from USD 10,280.4 million in FY’2010. Increasing presence of malls in metropolitan cities in
India along with surge in entrepreneurial business environment majorly in the services and
manufacturing industry such as BPOs, KPOs, LPOs and other consumer driven businesses were the
primary growth drivers of furniture market in India during the period FY’2010-FY’2011. However, in the
succeeding years, the market growth rate slowed down to single digit and recorded 7.9% and 8.7%
growth in FY’2012 and FY’2013, respectively. Gradual increase in prices, increasing cost of wood and
metal along with declining revenue per square feet of retail outlets were some of the major reasons for
the slowdown in the growth rate. Overall, the revenue of the Indian furniture market grew at a CAGR of
14.0% for the period FY’2010- FY’2015.
ORGANISED & UNORGANISED
FURNITURE MARKET
The furniture market of India has been predominantly driven by the unorganized segment which has
comprised of a gamut of independent retailers, local carpentry shops, numerous SMEs and
wholesalers. Indian customers have traditionally employed on-site carpenters in order to install furniture
in their respective homes and offices. This has helped the customers to customize designs based on
their preferences, unlike the predefined readymade furniture models offered by the branded
companies. Owing to this, the unorganized market has continued to flourish in the Indian furniture
space.
However, the arrival of various international players and increasing number of branded furniture
players’ establishing their base in the domestic market has been witnessed in the last few years. The
organized furniture market has been observed to grow from 8% in FY’2010 to 20% in FY’2015. The
increasing organized retail establishments in the country along with the surging demand for branded
products due to rising income levels has led to many brands foraying into the furniture market, thus
catering to the rising demand of the masses.
The growth over the time period FY’2010-FY’2015 has been steady as more number of people has been
attracted to branded furniture. The urban working professionals who have preferred to spend less time
and effort on the preparation of an appropriate design for their products have favored to visit branded
retail stores to purchase the products.
MARKET FUTURE PROJECTIONS
India Organized Furniture Market
Segmentation on the Basis of End User by
Revenues in Percentage (%), FY’2015
HOUSING SEGMENT
Home furniture is considered as a basic necessity in a household. The Indian middle-class household
has been generally observed to comprise of five rooms, inclusive of kitchen and bathroom. In the year
2011, 32.1% of urban households have been observed to live in one and two room houses.
It is the largest segment of the furniture market in the country and it has witnessed a consistent rise in
the last few years. In FY’2015, it contributed a share of 62% in the furniture market revenue. There were
a number of factors which has escalated the demand for home furniture items in the country in the
recent years. The rising number of residential housing complex launches and increasing demand for
high end furniture items in the households due to rising spending capacity has aided the growth of
home furniture market in the last few years. Furthermore, the concept of fully furnished apartments has
also propelled the institutional sales of home furniture items; this has resulted into increased
contribution of home furniture in the overall sales volume. The ingress of "Ready to Live" furniture
solutions for new residential schemes and housing projects have been gaining massive traction in the
last few years, thereby, driving the sales of home furniture in the country. In FY’2015, home furniture
segment generated revenue worth USD 2,459.3 million.
OFFICE SEGMENT
The Office segment in the furniture market has garnered 19% of the market revenues as observed in
FY’2015 which is relatively smaller proportion of the furniture market in the country.
The rising demand of furniture from modern workspaces which includes IT-ITeS ,BPOs, KPOs and LPOs
services have also played a significant role in augmenting the sales of the overall commercial
furniture in the recent years.
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.
Moreover, the improving economic situation has also provided a strong driving force to the growth of
various industry verticals such as healthcare, retail, consumer goods, education and others, thus
leading to greater number of commercial establishments, in turn impacting the sales of office
furniture.
The commercial spaces absorption in the country's top eight cities rose 32% to 17.9 million square feet
in 2015.
Bangalore has the highest office space absorption with 174% year-on-year growth in 2015, followed
by Pune at 162% which further has raised the demand of contract office furniture at these areas.
HOME FURNITURE PREFERENCES
The demand of home furniture segment has varied across different income levels. For instance, a high
income class person always prefer branded furniture with high quality wood such as teak, sheesham or
mango as an alternate wood.
They generally prefer products with fine finishing such as veneer coating which makes furniture more
attractive. High income group prefers quality and durability; price is not the major criteria for this
income class. Additionally, higher income class generally resides in mansions and villas with fine
finishing and hence do not sacrifice on spending a high price on furniture products.
Additionally, before purchasing the furniture products, this income group considers the furnishing of the
whole house and matches the designs accordingly so that their furniture products can well adapt the
home environment. On the other hand, middle income class which consists of small businessmen and
working class people has specific budget constraints.
Hence, these people keep budget as their top priority and at certain times compromise on the designs.
The major demand in this group comes from cheap priced furniture such as MDF, particle board,
rubber wood and others which can last for around 5 to 7 years. It has been observed that this income
class generally looks out for the furniture which can be easily moved or dismantled due to instability of
work location.
For example an IT consultant employee in Bangalore may look at the furniture which can easily be
moved from one place to another anytime in case the person has to switch his place of work or city
which is quite common in MNCs these days. Also these people do not consider the furnishing of the
entire house while purchasing the furniture but just look at the nearer surroundings. For example, to
purchase a dressing table they will only consider the bedroom furniture and design of the bedroom
furnishings while the higher income class considers the furniture and furnishings of the entire house.
This income class has also been observed to use very less imported products; however this trend has
been steadily changing due to rising personal disposable incomes of the households.
On the other hand, the lower income class in India does not prefer purchasing branded furniture due
to low budget and generally contact local carpenters to make furniture or opt for cheap and low
quality furniture from a local retailer.
On a general note, the trend in the country for furniture products has been highly variable. There has
been the demand of both simple and compact design furniture along with the use of vivid color
combinations as per the preferences of different people belonging to different age, income and
regional groups.
OFFICE FURNITURE
The office furniture in India is primarily demanded with compact and simple style that can be
adapted with the office surroundings. MDF and particle boards are generally not used in office
furniture since they are not durable. Teak and sheesham are also not demanded because of their
high price.
Thereby offices generally demand contract furniture which is made out of a combination of plywood
and board or laminated board.
The preference for office furniture in India is also dependent on whether the office is rented or owned.
The general trend has been that the rented offices go for such furniture which can be easily
dismantled and are cheaper in price while the owned offices or long term leased offices use fixed
and durable furniture which can lasts for long.
It has been observed that there has been the lack of premium grade-A office spaces in Mumbai
during recent years. This will lead to increase in the number of projects coming up for premium office
spaces which in turn would lead to rise in the demand for office furniture, especially the contract
furniture. Grade-A supply is expected to increase between 2017 and 2019 in the Bandra Kurla
Complex (BKC) core business district and secondary business district (SBD)-Central in Mumbai.
Also lack of premium offices has increased the emphasis on high quality furniture. Over 60% of the
office furniture is covered by contract furniture which is customized by various organized stores
especially in big retail chains. Retail chains have to get their furniture customized with respect to the
space and size of any particular store and keeping it in line with the furniture of other stores of its retail
chain.
On the other hand, other furniture products such as chair and tables are purchased on a ready to use
basis. These can be imported or domestically procured. These chairs are particularly of an executive
style. The major demand in the executive chairs is for the revolving type to cater to the comfort needs
of people working in the offices.
Strategic partnership with
retail chains
It has been observed that the big retail chains also tie up with organized furniture dealers to obtain
customized furniture for their retail stores at different locations. The stipulated contract time is 2 to 3
months.
These partnerships help the retail chains to use similar furniture designs in its varied sized stores. These
partnerships are usually dealt by the head office and provided at the retailer’s location after sending
the pictures of retail location or getting the furniture sellers to visit the location and take the
measurements.
After this the furniture company provides the customized furniture within the stipulated time period to
the retail stores.
Corporate partnerships with furniture
retailers
There has also been a trend of different corporate to partner with furniture retailers. As per this
arrangement, the furniture retailers provide the branded furniture to the corporate at cheaper rates
than the retail prices and in return, the corporate provides the retailer with a right to manage every
time the company has to change its furniture or furnishing products.
These retailers also act as architect when the company needs opinion on the required product
changes.
INDUSTRIAL FURNITURE
The furniture used in the industries is generally domestically manufactured or readily available with
industrial furniture retailers. Industrial furniture generally consists of storage cabinets, chairs, tables,
racks, machinery tables and several others.
The demand of the furniture in industries is generally catered through domestic unorganized
carpenters. However, a minor proportion of demand is also catered through ready to use furniture
available with industrial furniture retailers. Industrial furniture is domestically procured rather than the
imports.
The preference in the industrial furniture is for solid quality furniture which is durable for long periods,
termite free and extremely low priced. Fire resistant coated materials are also preferred in industries.
This is due to the reason that the industries require material with high durability so that it could last
longer and being termite free and fire resistant helps it to protect from losses during rain or fire
incidents.
GENERAL STYLE OF FURNITURE IN INDIA
India furniture market has been segmented on the basis of product designs such as modern, classical
and customized. There has been a preference towards modern style of furniture in India. This style is
majorly demanded by young generation since they have seen a classical style of furniture from a long
time, so they have preferred to change the style and hence prefer modern furniture.
Also, modern furniture is compact and is in line with the international trends which have further
increased its preference especially in younger generation. It has been monitored that 60% of the
furniture orders in FY’2015 have been for the modern style of furniture.
Moreover modern furniture is easy to move and disassemble which is highly preferred quality amongst
the working class.
Classical style of furniture is right behind the modern style of furniture, around 30% of all furniture orders
have been traced for the classical style of furniture. There are still a large number of people preferring
classical style of furniture majorly due to its heavy and durable wood.
On the other hand most of the customized furniture has been demanded in the office space which
accounted for 10% of total orders. However, it has been witnessed that there is a slow change in
preference towards customized furniture in the modern homes such as modular customized wardrobes
and modular kitchen.
REGIONAL DEMAND OF INDIA FURNITURE
MARKET, FY’2015
 WESTERN REGION
The demand for furniture has been witnessed to emanate majorly from the western and southern
India. People from western states such as Gujarat & Rajasthan and southern states such as Kerala,
Karnataka, Tamil Nadu and Andhra Pradesh have contributed nearly 61.0% of the revenues
generated.
Sale of furniture in the western region of India was observed to be the highest at 33.0% due to the high
demand of solid wood.
Solid wood materials such as teak and sheesham which are more expensive than MDF and particle
board have been preferred by the local customers as they possess high strength, can withstand high
temperatures and are resistant to dry-wood termites.
Moreover, waxing the surfaces of these materials increases their life and hence they have to be
replaced comparatively less often.
SOUTHERN REGION
Sale of furniture in south India was observed to register second highest revenues in the year FY’2015
with a percentage contribution of 28.0%.
People residing in the southern region of the country have generated a high demand of traditional
and carved furniture items. Old fashioned jharokhas, wooden arches, with traditional carvings from
Patan (Gujarat), Renukunta and Mahabalipuram have been more popular in south Indian states.
However, with a rise in younger and IT-based population in this region, modern style furniture has
gathered a steady rise in demand.
The working population in cities such as Bengaluru and Hyderabad has preferred to make repeated
purchases of furniture due to relocation which is majorly due to change in working place. This has led
to comparatively higher sales of furniture than northern and eastern regions.
NORTH REGION
Northern regions of India have summed 21% of share in terms of sales revenues in the furniture market
in India. These regions have been observed to use furniture made up of lighter wood materials such as
particle board, MDF and plywood.
The cost of furniture items produced from these materials is significantly lower in comparison to solid
wood material. The mindset of the people to use medium quality and lower priced products has been
witnessed to generate a higher demand in north India.
EASTERN REGION
The eastern region of the country which comprises of states such as Assam, Arunachal Pradesh,
Manipur, Mizoram and others have generated a higher demand of light weight furniture products.
Furniture made out of rattan and plastic materials has been observed to be more favoured in eastern
regions of the country as there are easy to move and are available in significant low prices in
comparison to wooden products.
Demand of furniture products from the east India has contributed 18% to the sales revenues in the
Indian furniture market. Moreover, the lower buying capacity of people residing in the eastern regions
has instilled them to opt for such furniture preferences.
USER PROFILE OF FURNITURE IN INDIA

◦ BY AGE ◦ BY INCOME
BY AGE
The age group of 25 – 35 years has been considered as the prime target group by furniture retailers in
India. This age group not only comprises of young married couples but also comprise of young working
individuals who influence their families for purchase decisions.
Moreover, in India, this age group has been observed to change home locations comparatively more
often as per their office location. In the year FY’2015, Indian customers with the age group of 25–35
years generated sales of 55% of furniture products.
The customer age group of 36 – 45 years contributed a share of 32.5% to the total sales in the furniture
market. Customers in this age group have been witnessed as more informed and consider numerous
factors before the purchase of the most appropriate furniture product. The sales of furniture to
customers above the age of 45 years stood at the least with 12.5% share in revenues.
BY INCOME GROUP
◦ The Indian market for furniture products has observed a varied demand from different income
classes. The higher income class has contributed 72.5% to the total revenue in the furniture market.
◦ This has owed to more expensive furniture products purchased by this income group. 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.
◦ The combination of stylish or trendy design has come at a premium price and hence, sales of such
products have resulted in a higher share of the upper income class.
◦ Middle income group has corresponded to a percentage share of 22.5%. Customers in this segment
have given near equal weight to price, quality and durability.
◦ Middle income population in India has been observed to keep a fixed budget for its furniture
products and is willing to stretch it by nominal amounts in order to obtain a better product.
◦ These customers have showcased highly varied behaviour which has been impacted from tertiary
factors such as influence from friends/ family, home budget and other financial obligations.
◦ Customers who are considered in the lower income group were observed to contribute only 5% to
the furniture sales through organized stores.
BY GENDER
◦ Buying furniture is a complimentary decision usually made by couples in a particular household. It is
mainly because of the fact that the males look for the quality and price while females look for the
design and size.
◦ The share of buying furniture is almost similar in both the genders. However, in the recent years the
trend of buying furniture is getting biased towards females.
◦ According to the billing basis, in FY’2015, 55% of the furniture billings were done by females while rest
45% were done by the males.
◦ This is mainly because of the increase in female working population in the country coupled with the
fact that they have also started looking at those aspects such as price and quality which were earlier
looked by the males.
◦ Based on the aforementioned factors the product cycle of the consumers has been
segmented into three parts: 60% of the consumers do not change their furniture
products before 6 years. This percentage also includes the people who refurbish their
old furniture after some time and use them again. 25% of the total furniture purchasers
change their furniture once between ranges of 3 years to 6 years, while only 15% of the
consumers repurchase a particular product before 3 years. These furniture products
generally contain inexpensive furniture or the purchasers in the very high profile who
can afford changing the furniture and furnishing products in short time span.