India Home Furniture Market Outlook to 2028

India Home Furniture Market Overview

The Indian home furniture market stood at USD 23.9 billion in 2023, reflecting steady growth attributed to rising urbanization, increasing disposable income, and changing lifestyle preferences.The compound annual growth rate (CAGR) from 2018 to 2023 was 18.5%, reflecting an upward trend.

The Indian home furniture market is highly fragmented, with several key players including Godrej Interio, IKEA India, Pepperfry, Urban Ladder, Nilkamal Limited.These companies are known for their extensive product portfolios, innovative designs, and strong distribution networks.

In 2023, IKEA India announced the opening of its third store in India, located in Bengaluru. This new store is part of IKEA's strategy to expand its footprint in India and cater to the growing demand for affordable and stylish home furniture. The Bengaluru store spans over 500,000 square feet and offers more than 7,000 home furnishing products.

India Home Furniture Current Market Analysis

The northern region of India, particularly cities like Delhi, NCR, and Chandigarh, dominates the home furniture market. This dominance is attributed to higher income levels, a growing urban population, and increased housing development projects in these areas.

Rapid urbanization and the development of new residential projects are key drivers for the home furniture market. India’s urban population is expected to reach 600 million by 2031, up from 377 million in 2011.

The increase in disposable income among the Indian middle class has led to higher spending on home furnishings. India’s GDP per capita increased from $2,045 in 2018 to $2,202 in 2023, reflecting greater purchasing power

India Home Furniture Market Segmentation

The Indian home furniture market can be segmented by various factors like material, distribution channel and price point.

By Material: India Home Furniture market is segmented into different materials like wood, metal, plastic and others (upholstery, glass) etc. Wood is a dominant segment, it is generally perceived as a strong, long-lasting material which makes it a favorable choice for furniture that needs to withstand daily use. Consumers often associate wood furniture with quality craftsmanship and timeless design.

By Distribution Channel: India Home Furniture market is segmented into distribution channels like online, offline (organized retail) and offline (unorganized retail). In 2023, offline (unorganized retail has dominated the market. Setting up a small furniture store or workshop requires minimal investment when compared to establishing a large-scale organized retail store.

By Price : India Home Furniture Market is segmented into price into Budget, Mid-Range and Luxury. Budget point dominates the market. A large portion of the Indian population falls under the middle-income or lower-income categories. This translates to a high degree of price sensitivity when it comes to furniture purchases.

India Home Furniture Market Competitive Landscape

Company

Establishment Year

Headquarters

Godrej Interio

1897

Mumbai, Maharashtra

IKEA India

2013

Bengaluru, Karnataka

Pepperfry

2012

Mumbai, Maharashtra

Urban Ladder

2012

Bengaluru, Karnataka

Nilkamal Limited

1934

Mumbai, Maharashtra

The competitive landscape of India Home Furniture market can be summed up in the following way:

Godrej Interio: Godrej Interio is one of the largest and oldest furniture brands in India, known for its extensive range of home and office furniture. It holds a significant market share due to its reputation for quality and innovation. In 2022, the company reported a revenue of INR 2,500 crore (approximately USD 334 million) in FY 2022.

Pepperfry: Pepperfry has revolutionized the online furniture market with its wide range of products and customer-centric services. The company's extensive online presence and physical studios have strengthened its market position. Pepperfry’s gross merchandise value (GMV) was reported to be over USD 500 million in 2022.

Urban Ladder: Urban Ladder’s focus on premium and customizable furniture has attracted a niche customer base. The company’s innovative designs and strong online presence have contributed to its success. Urban Ladder was acquired by Reliance Retail in 2021 for INR 182.12 crore (approximately USD 24.4 million).

India Home Furniture Market Analysis

India Home Furniture Growth Drivers:

Urbanization and Housing Development: The rapid urbanization in India has significantly boosted the demand for home furniture. According to the Census of India, the urban population is projected to increase from 377 million in 2011 to 600 million by 2031. This urban expansion is accompanied by a surge in housing development, with new residential projects driving the need for modern and stylish furniture. The Pradhan Mantri Awas Yojana (PMAY) scheme, which aims to provide affordable housing to all by 2022, has sanctioned over 11.3 million houses under PMAY (Urban), further fueling the demand for home furnishings.

Rise in Disposable Income: The increase in disposable income among the Indian middle class has led to higher spending on home furnishings. According to the World Bank, India's GDP per capita rose from $2,045 in 2018 to $2,202 in 2023. This rise in income levels has enabled consumers to invest more in enhancing their living spaces with better quality and aesthetically pleasing furniture. The growing middle-class population, expected to reach 583 million by 2025, further supports this trend.

E-commerce and Online Retail Expansion: The proliferation of online retail platforms has revolutionized the home furniture market in India. E-commerce giants and dedicated furniture websites have made it easier for consumers to access a wide range of furniture options from the comfort of their homes. This growth is supported by increased internet penetration, which reached 48.7% in 2020, and the convenience of online shopping.

India Home Furniture Market Challenges:

Raw Material Price Fluctuations: Fluctuations in raw material prices, particularly wood and metals, have impacted profit margins. Over the past two years, metal prices have seen fluctuations of up to 15% due to global supply chain disruptions and inflationary pressures.

Raw Material Price Volatility: Fluctuating prices of raw materials such as wood, metal, and foam can significantly impact production costs and pricing strategies for furniture manufacturers. For instance, the price of teak wood, a popular material for furniture, increased by approximately 15% between 2020 and 2023 due to supply chain disruptions and increased demand. This volatility poses a challenge for manufacturers in maintaining profit margins and competitive pricing.

Competition from Unorganized Sector: The presence of a large unorganized sector offering low-cost furniture alternatives poses a challenge for organized players in maintaining market share and profitability. These local players often operate with lower overhead costs and can offer competitive pricing, making it difficult for organized brands to compete on price alone.

India Home Furniture Market Government Initiatives:

Pradhan Mantri Awas Yojana (PMAY): The Pradhan Mantri Awas Yojana (PMAY), launched in 2015, aims to provide affordable housing to all by 2022. Over 11.3 million houses have been sanctioned under PMAY (Urban) as of 2023, significantly boosting the demand for home furniture as new homes are furnished. This initiative supports the growth of the furniture market by driving housing development and increasing the need for home furnishings.

Smart Cities Mission: The Smart Cities Mission, launched in 2015, promotes sustainable and inclusive development, leading to increased urbanization and demand for modern furniture solutions. As of 2023, 100 cities have been selected for development under this mission, with an allocated budget of INR 2.05 lakh crore (approximately USD 27.7 billion). This initiative has spurred the demand for innovative and stylish furniture in urban areas.

Goods and Services Tax (GST) Reform: The implementation of the Goods and Services Tax (GST) in 2017 has simplified the tax structure for the furniture industry, reducing tax complexities and improving ease of doing business. The unified tax regime has benefited the organized furniture sector by lowering compliance costs and facilitating smoother inter-state trade. This reform has encouraged investment in the sector and supported market growth.

India Home Furniture Future Market Outlook

The Indian home furniture market is expected to continue its growth trajectory in the coming years. The market is also expected to see a shift towards more organized retail, with established players and online platforms expanding their reach.

Future Market Trends

Sustainable Furniture: The demand for sustainable furniture is rising as consumers become more environmentally conscious. The Indian Green Building Council reports that the market for green-certified products is growing by 20% annually. This trend is driving manufacturers to adopt eco-friendly materials and practices, thus expanding the market for sustainable furniture.

Smart Furniture: The integration of technology in furniture is becoming increasingly popular. A survey found that 35% of Indian consumers are willing to pay a premium for smart home products, including furniture. Features such as built-in charging ports, adjustable settings, and smart home integration are driving the demand for smart furniture, which is expected to grow significantly in the coming years.

Overall, the future of the Indian home furniture market is promising. The market is expected to witness healthy growth, driven by various factors.
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