Market driving factor The interiors industry is currently riding on the boom of the real estate industry which is the second largest employer in India after agriculture. As the interior industry is wide and mostly unorganized we can analyze through the performance of the real estate industry. Hence we can look at the overview of real estate industry. 80% of the real estate is into residential and remaining is into commercial such as retail, hospitality, industries, IT & ITeS, Banking, SEZ, etc.
The growth in commercial properties is giving thrust to the contract market for their bulk needs. According to one market survey home improvements (38%) and leisure holidays (37%) as the two pursuits Indian consumers are willing to indulge in. Many of the world’s leading home fashion brands are available in India through domestic retail outlets . The market for home decor, including accessories, hardware, furniture and furnishings is estimated at USD 14. 4 billion.
Of this, only six percent is organised, representing a tremendous opportunity. Indian furniture market: The Indian furniture market is estimated to be worth Rs 350,000 million. Within this, the wooden furniture accounts for Rs 60,000 million. Of this the imported furniture market is currently worth Rs 6000 million and is growing at 50 – 60% each year. The furniture sector in India only makes a marginal contribution to the GDP, representing about 0. 5 per cent of the total GDP. Organised Furniture Industry and its growth
The furniture industry including furniture hardware and furniture fittings in India is estimated to be around US$8 billion and is expected to grow at a rate that is much faster than its current rate of about 25- 30%annually. The organised segment which comprises of mainly imports and a few Indian manufacturers who are mostly into the office furniture segment accounts for about 15-20% of the total pie. A major chunk of the organised imported segment (80%) comprises of home furniture. The organized sector has shown a healthy growth of about 13-15% last year and is expected to grow even more rapidly.
The growth drivers are the fast paced growth in the construction and hospitality industries and organizedretail and businesses and industries in India. Another growth driver is the demanding and discerningyoung Indian who is no longer satisfied with the old hand-me-down furniture used by his forefathers. The growth in the organised segment is quite obvious from the fact that some major chains andhypermalls have already started stocking furniture and furniture accessories and have had a goodresponse on that front.
Home Furnishing and Furniture Industry Like many other segments of retail, small and local retailersagain dominate this sector. Nearly, 85% of the homefurnishing industry is in the unorganized sector andremaining 15% is in the organised sector and is made up of manufactures and importers catering to the various segmentof the industry. Some of the major segments in furniture industry are residential, office, contract and institutional. There are other segments also based on the application (kitchen, bathroom, bedroom, and others).
Demand factors in the Furniture Sector Real Estate / Housing boom – Housing and Real Estate construction on a rise gradually after the economic slowdown in late 2008 – Expansion of residential and commercial infrastructure across metros and smaller cities Tourism / Hospitality industry growth – Increasing tourist inflow – Demand for hospitality space and infrastructure Consumer demographics – Increasing income levels – Increased consumption of lifestyle products, including furniture. MARKET STRUCTURE