Huge Potential in a very Particular Market

It is almost 2024 and it is rather intriguing to see the way the Indian furniture market has come up on the map of the Indian HOME space. About a decade or 15 years back, families would get contractors to make furniture pieces and would not change the same for as long as 30-35 years. The furniture industry has treaded a big leap since then and now stands enormous potential in comparison to the international market. What supports this claim is that Indian furniture market has:

- a positive, quite stable growth of disposable income.

- an expanding middle class. 

- a young population, which increasingly wants to set up their own households.

• further growth of population, which has outpaced China, reaching now more than 14 billion people.

We see since years that home products, including furniture, furnishings, home decor and houseware realize growth rates between 10 and 20 % year by year. Consulting companies like Technopak estimate that the yearly consumption of these home products amount to $30 billion. Quiet a trigger to invest in the furniture business, a trigger for international big players to move in like IKEA has done in 2018. Now they are operating in Hyderabad and Mumbai, till 2025 they aim at more than 20 stores in India.

Fragmented furniture market today

The Indian furniture market is highly fragmented. Thousands of independent small stores sell furniture, and they are usually specialized on a couple of furniture products like chairs and cupboards, or beds and mattresses. The complete range of furniture and other home products, which retailers present in US- or European marktes, are not an Indian format for the time being. Indian furniture retailers are currently too small and cannot mobilize the necessary ressources to present a shopping experience in the total home product look, which IKEA and other furniture palaces are offering in Great Britain, France, Germany or the US. The producing industry is as well highly fragmented. 

From a shopping perspective these Furniture Palaces are a key to reach out to a growing middle class, which is curious to see full ranges of furniture and how it is embedded in total looks at least of complete furniture ranges, but even more attractive in complete home product scenes. The record numbers of visitors at the IKEA shops in Hyderabad and Mumbai indicate that direction for the future of Indian furniture sales.

Competitive middle sized companies

For the future we see less fragmentation and the development or immigration of furniture retail giants. However in such a large market like India, middle sized companies in retail and in production will be in the coming years a very important market bracket. Many cities and regions still have some years of development quitting garage sales to professional furniture shops. Improved middle sized furniture companies will be also in the long run a strong competition to large formats, because they have a high proximity to their customers and a high level of services.

Specifics of the Indian furniture customers

The Indian furniture market has some specifics, which need to be treated very carefully to be succesfull in the coming years :

(1) Small spaces need small furniture.

Usually the Indian household provides only small rooms for complete families. Subsequently the products need to be much smaller than in the US or Europe, if it is meant to tap into the middle class market. Foldable chairs and desks are attractive, intelligent solutions for beds, lots of stowage opportunities.

(2) Service is king

India is a highly service oriented society. Availability and costs of services are in an international perspective extremely competitive. Furniture buyers are accustomed to delivery and mounting services on low cost levels. Not to forget that the service very often indcudes the customization of products, for example to fit them perfectly to the available room.

The customization of furniture has its limits in the US or Europe. There are often modules available, but usually they need to fit to an industrial production. If not, it will be really expensive.  In the US and Europe high costs of products and services led to a quite elaborated “do it yourself” attitude. Consumers buy parts and modules of a cupboard or a bed, transport the more or less handy packages  themselves home and mount the cupboard or bed on their own. The famous question is : « Are you still mounting, or do you live already » with your new furniture. If you want transport and mounting services, it is offered only for more complex furniture, and it is costly.

The Indian preference for a high level of service will remain for the next years, because the availability and cost of services is far more attractive than in the US or Europe. This strenghtens the development of professional medium sized companies, which focus on their customer needs. Large format stores  will be a successful selling format in the medium to long run, however large and by they need to provide an aedequate level of customer focus, including the right products and the right level of favorable services.