China being the second largest economy by nominal GDP and world largest economy by purchasing power parity (PPP) in 2014 has emerged as one of the key furniture market in terms of revenue, top largest furniture exporters and one of the major manufacturers of wooden furniture in world. It had dominated several European wooden furniture manufacturing countries such as Germany and Italy along with other furniture manufacturing nations like Netherland, Canada, Poland, Mexico and United States. The furniture market in China has grown with a CAGR of 10.3% during the period 2010-2015.
China Furniture market has been broadly divided into residential and non-residential furniture market. Observing the growth trend of the China residential furniture market with the non residential furniture market, the residential furniture market has grown with a CAGR of 11.4% for the period 2010-2015.
The furniture products in China domestic furniture market are stockpile majorly through domestic manufacturing and on small scale via import. The imported furniture products majorly belong to the product categories such as Euro-French style furniture, Euro-American furniture, and American Classical style furniture, which are made from different varieties of furniture manufacturing raw material. The imported products are sold via retailers’ sales channel in the domestic furniture market and are sold at higher margins as the furniture is imported on demand and the risk involved in the sales of such furniture is high.
In 2014, China had contributed 38.2% to the world furniture market and is recognized as the top furniture exporter in the world followed by Germany, Italy, Poland, United States, Mexico, Vietnam, Canada, and Netherlands. Low labour cost, easy availability of raw materials, skilled workers, and large forest area are the major reasons which have made China furniture Market, the largest furniture market in the world in terms of revenues and export.
The value chain analysis for China furniture industry includes primary activities which add value directly to the production process in furniture industry and secondary activities also plays an important role.
Bed Room Furniture encompasses of beds, bed benches, book cases, wardrobes, chests, dressers nightstands and others. Bedroom furniture has stood as the highest revenue-generating segment as in the residential furniture sector as items placed in bedroom have been of utmost priority for any customer.
Living room Furniture comprises of products such as coffee tables, sofas, sofa tables, corner tables, chairs, bookshelves, TV stands, ottomans, display cabinets, consoles and upholstered furniture like sofas and overstuffed chairs.
In the year 2015, China residential furniture market has faced widespread demand owing to increasing sales from online channels and increase in demand of furniture due to number of upcoming housing projects, the increase in demand of customized furniture and increase in trend of modular kitchen.
The online sales of furniture had witnessed a robust growth in past few years. The online companies such as Overstock, Dhgate are the renowned online furniture provider in the company.
Contract furniture’s are the sub-segment of non residential commercial furniture sector of China. Such furniture’s are designed and manufactured for commercial sector (offices, shopping malls, waiting rooms, lobbies etc) installation at higher margin rates by medium and large manufacturing players.
The high quality and design of furniture products had increased the international demand for furniture products resulting in the increase in the value of furniture export. Additionally, Easy availability of raw materials for manufacturing of furniture will help in the growth of China Furniture industry in future as easily available resources will lead to lower production costs, better quality of products and also make sourcing easier.
Yihua Furnishing is the leading manufacturer of furniture products in China. The company is offering wide range of timber products in different segments such as youth Bedrooms, dining room, Living Room and outdoor Furniture. The company operates under the following brands Kaylee, Madera, Milo, Latitudes and others. Huizhou Huaya is a leading manufacturer of Home furnishing Products in the country, Specialized in Dining Tables, Coffee tables, Wine Cabinets, Dining Chairs and others.
IKEA group is a multinational group with its presence in more than 40 countries. The company is operating in home furnishing products. IKEA is offering furniture for bedroom, living room, kitchen, dining room, Bathroom and others. Hoba Home offers bedroom furniture, Living room furniture, kitchen furniture and other homer furniture products to the customers.
After decades of development in China furniture industry the market had witnessed a tremendous growth in past few years. It has also been anticipated that the market will increase in future at a CAGR of 5.3% during 2016-2020.
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Ankur Gupta, Head Marketing & Communications