Global Statistics Representing Online Furniture Market Scenario
Furniture is one of the fastest-growing segments in retail e-commerce as the consumers have become more inclined towards buying multi-purpose, foldable, and technology-driven furniture through e-commerce sites on account of comfort, heavy discounts, and trendy designs. Online shopping has become hassle-free as users can easily return and exchange the products. Some of the key e-commerce platform to buy genuine products include Amazon, Flipkart, Pepperfry, Urban ladder, Snapdeal, and Woodenstreet. Rising penetration of smartphones and increasing spending on online shopping are some of the factors driving the market growth.
In the last few years, technological advancements such as augmented reality, IoT, virtual reality, machine learning, and mobile technology have completely revolutionized the online furniture business. Today, a number of players are launching their own online platform and are entering into partnerships with the e-commerce retail stores to strengthen their distribution network. In developed nations, leading furniture brands are offering customization, which is gaining popularity amongst various consumer groups. Augmented reality offers the consumers to browse the furniture at the comfort of home, which not only increases the convenience of furniture shopping but also offers the buyers to learn more about the product. For instance, the IKEA Place app lets the users preview over 2,000 furniture pieces by virtually placing the items at home and scaling the cataloged items to fit the room before purchasing the furniture.
Global online furniture market was valued at USD 81,702 million in 2018 at a CAGR of 20.2% during the forecast period 2019–2026
Wood Is the Most Preferred Material In the Online Furniture Market
Today, numerous materials are available in the online furniture market, including wood, metal, and plastic. However, the demand for wooden furniture has been witnessing significant growth as it offers a better shelf, enhances aesthetic appearance, resilience, and structural integrity. Apart from this, growing preferences for eco-friendly products, increasing awareness about environmental crises like global warming and pollution, an abundance of raw materials, and rapidly growing construction sector are some of the factors driving the market growth. In 2016, the wood treatment segment generated about USD 34,599 million in 2018 and is expected to reach USD 137,220 million by 2024.
By application, the online furniture market is segmented into hospitals, offices, and contracts. The office segment comprises of office desks, office chairs, and storage. It caters to the commercial and office space. The increasing rate of employment and revolution of the industrial infrastructure has driven the demand for office furniture in recent years. As per the India Brand Equity Foundation (IBEF.org), corporate or office furniture represents around 15% of the total production value. The global organized furniture industry is expected to witness a 20% Y-o-Y growth on account of rapidly advancing consumer markets and construction of new business bays, especially in the developed regions, such as North America and Europe.
Growing Adoption of Luxurious Furniture
North America is dominating the online furniture market and will continue the same during the forecast period. This can be attributed to the growing popularity of digital-first retail. For the record, digital-first retail offers a diverse range of designs, styles, and patterns to choose from. It also offers the ability to compare the product in terms of prices and specifications. In line with this, several companies such as Ikea and Wayfair have already started providing online discounts and offers to increase the customer base. In the U.S., in January 2020, Furniture of Dalton—a Georgia based furniture store—launched its first online website. Similarly, Amazon started its standalone site Amazon Home, which solely offers home decor, specific items, kitchen & dining, bed & bath, and garden & outdoor. In line with this, several start-ups have started introducing creative and unique furniture using advanced technologies to sustain in the cut-throat competition. Recently, Nova LifeStyle has developed a piece of furniture that can monitor, record, and deliver user data to key medical care providers.
In Canada, the customers are more inclined towards purchasing luxurious furniture instead of minimalistic. Pallister Furniture is offering a turnkey approach in designing by creating a dedicated branded display to make the showrooms and offices more appealing. Similarly, a number of government initiatives such as the First Time Home Buyers Incentive (FTHBI) is assisting the buyers in making payment, which is indirectly encouraging the customers to buy more furniture.
In Mexico, the furniture manufacturing sector is witnessing a significant surge. This can be attributed to the rising preference of apartment living and increasing number of offices. It is also backed with a robust furniture industry that hosts around 40 different international businesses specializing in furniture and interior design. Additionally, Ikea’s investment in Monterrey has boosted market growth to some extent.
Asia Pacific is the fastest growing online furniture market on account of the rapidly growing population, increasing expenditure power, and rapid industrialization. As per CSIL 2017, Asia Pacific accounts for about 54% of the global furniture production.
In China, the customers are more inclined towards buying eco-friendly furniture made from natural and chemical-free materials. Additionally, more customers are willing to buy furniture for their children to build an eco-friendly environment for their development. As per the National Bureau of Statistics China, total sales of furniture manufacturing enterprises in the first three quarters of 2018 was accounted for around USD 83,400 million. Similarly, several companies are planning to set up manufacturing bases in China, owing to low labor costs, abundance of raw materials, and ease of shipping.
India’s furniture market is also showing promising opportunities in the field of the online furniture market. This can be attributed to the rising middle-class population, growing advancements in information technology and services, an increasing number of smartphone users, and the presence of e-commerce giants such as Flipkart, Amazon, and Ikea. Recently, Flipkart started its private-label Perfect Home for the furniture market. Similarly, a number of furniture start-ups such as Pepperfry and Urban Ladder are flourishing in India. The companies are opening up online portals for designers, enthusiasts, and entrepreneurs to pitch in their ideas and suggestions about furniture for creating customer engagement.
Some of the prominent players in the online furniture market include Ashley Furniture Industries, Ekornes, Inc., Herman Miller Inc., Inter IKEA Systems B.V., and Steelcase Inc.
Online Furniture Market Segmentation
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