The Indian furniture industry is considered as a non organised sector, where handicraft production accounts for about 85% of the furniture production in India
India is a land of wonderful and marvelous artistic work of wood which is being appreciated worldwide. The rich Indian handicraft and beautiful traditional attributes of art and design have established a reputation for Indian furniture industry in the nation and worldwide to be appreciated by people. There are exceptional designs, rich, compact and luxurious trends and, not the least, the supreme quality have given elegance to the furniture segment in the traditional as well as modern aspect.
Tradition is making lots of developments in the Indian furniture market is to make a luxury lifestyle statement. The old ‘charpais’ (string beds), inlaid ‘door jambs’, handcrafted cupboards, ornate swings, and the good old wooden chairs and takht (divans), old-fashioned round tables with bloated legs and ornamented master beds are back in furniture stores — and in homes as well. Often wood is recycled, culled from old discarded furniture and crumbling ‘havelis’ (traditional Indian mansions) in the villages and former princely chiefs that are bring pulled down by real estate developers to make ways for high rises.
The Indian furniture industry is considered as a non organised sector, where handicraft production accounts for about 85% of the furniture production in India. The furniture sector makes only a marginal contribution to the formation of GDP.
Now, the furniture market in India has historically witnessed a prolific boom in the country. There were a number of factors which have led to a growth in furniture demand in the Indian households in the last few years. The growing economy of the country has encouraged the spending capacity of the people, which in turn has impelled the sales of branded furniture items in the market. The growing phase of infrastructure and real estate market has also augmented the demand for furniture products in the country. In the organized retail segment, the market is occupied by leading companies such as Godrej Interio, Home centre, Nilkamal, Durian Furniture, Style Spa among others, which have over the years grabbed significant positioning in the domestic market. Furthermore, the entry of international brands and increasing brand awareness amongst Indian inhabitants in the recent years has led to the emergence of furniture retailing in India.
The furniture market in India is highly fragmented with majority of the revenue being generated from the local players. In the recent years, moulded plastic, wrought iron, board and bamboo furniture have been widely purchased by the households in India. In order to cater to the rising requirements of online shopping in the country, a number of companies have stepped afoot in the online channel of furniture market in the last few years. 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 Indian furniture market, which has grown at a CAGR of 17.2% for the period FY’2008-FY’2013, will incline at a compounded annual rate of 13.0% from FY’2013-FY’2018. Heavy demand of household items including furniture and furnishing products from the urban class has historically been conducive to the growth of furniture market in India. This trend is expected to grow in the future as well, as greater number of people has been migrating to the urban areas in order to raise the standard of living and earn more income.
For long, furniture retail in India has mostly been unorganized. As much as 80% of the industry, according to various estimates, is run by standalone stores and individual carpenters. Besides a few organized players like Evok, Home Stop and HomeTown, there are no brands in the organized brick and mortar furniture retail space that have managed to build a large chain of stores. (Sweden’s IKEA could be a game changer, when it opens its first store in India, possibly in Hyderabad.)
Instead, a clutch of online furniture sellers have emerged in the last few years, offering a potential new business model for an industry that is bound to grow as India’s middle-class widens and spending rises.
The market is led by Pepperfry, Urban Ladder and Fab Furnish, three online furniture retailers founded in 2012. Part of their success is offering two things that traditional furniture typically don’t: A wide variety of modern designs, and the convenience of delivery and assembling.
Another reason is the cost of retail space.
The online players have caught the attention of venture capitalists. Urban Ladder raised $20 million (Rs 122.6 crore) earlier this year, in addition to a $6 million funding it had secured in an earlier round. Pepperfry has raised about $29 million (Rs 177.8 crore) so far. The furniture retail industry has been pegged at 13 billion (Rs 79,683.5 crore), with online contributing less than $100 million (Rs 613.2 crore). But the estimate differs, since a large part of the industry is unorganized. Chopra estimates that it’s a $20 billion (Rs 122,590 crore) market in India overall. His startup alone is looking to touch about $65 million (Rs 398.6 crore) in turnover this year.
Pepperfry had set itself that target last year.
The organized furniture retail industry is growing at the rate of 20% year-on-year, according the Association of Furniture Manufacturers and Traders. Shah, for one, isn’t particularly bothered about online retailers in the long-term. That’s partly because online stores besides selling some of their own designs provide another outlet for these manufacturers to sell.
Sellers are looking to get smaller retail spaces and are looking to either tie-up with existing players or set up their own stores. Future Group has tied up with Pepperfry to sell some of their products through the site. Home Stop has its own online store. Pepperfry being a marketplace has also given other furniture retailers an opportunity to sell online.
Finally, there’s also the fact that much of the growth will come from India’s smaller cities. Fab Furnish, for example, makes 30% of its sales to customers in Tier 2 and Tier 3 cities.