Introduction: Luxury Furniture was something that only the wealthy could usually afford and primarily still is, although there has been significant increase in the capacity for those who can afford to obtain luxury furniture. Rising disposable income and the effect of cultural globalization have boosted the demand for luxury furniture and moved the demand center from the hospitality sector to the homes of individuals. While the hospitality sector was the predominant market for luxury furniture, there is now an increasing desire for consumers to purchase luxury furniture. This is further supplemented by the growing use of luxury furniture in Spas which is one of the key markets for industrial sale of luxury furniture due to the high reliance on aesthetics.
Market Overview: The luxury furniture market is expected to grow significantly in the upcoming period with the market valued at USD 23 Billion in 2017 and to be worth over 30 Billion by the end of 2023. This gives it a modest CAGR of 4.6%. The market is poised to grow faster beyond 2025 owing to increasing standards of living and an expected growth in consumer disposable income. A major demand segment in luxury furniture is the use of art based furniture and recycled furniture, both of which are expected to be worth over USD 2 Billion by 2020. The luxury furniture market is expected to be one of the key drivers behind the growth of the furniture market. With increasing emphasis on design and comfort, luxury furniture is poised to have major increase in industrial as well as commercial demand. The main channels for sale also play a crucial role as most luxury furniture is unique and the originality becomes a major selling point, hence, brands focus on the extent of differentiation they can offer in their design aiming to create design that cannot easily be replicated or to use materials that are rare for the construction of the furniture. Primary sales channel works through the distributor as many times, manufacturers deal with industrial sales majorly. Although the manufacturer winds up having higher margins despite mostly having lower prices than the distributor. Although the largest contributor to the market will be in the European region, the market is expected to experience high growth primarily in the Asia pacific and the Middle East region. Emerging economies are expected to be participants in the luxury furniture market in the long term
Key Drivers: The main drivers behind the luxury furniture market in any region are relatively similar, the primary driver being the increase in disposable income. Growing changes in lifestyle along with cultural and financial growth of the population have led to the market demand for more unique and authentic furniture which has originality attached to it. Another key driver is the increased demand from the hospitality sector owing to the increase in construction of luxury hospitality facilities in Asia and Europe. The other key driver is the emergence of the furniture art market where the entire focus is on the design of the furniture.
Competition Scenario: Some of the key players in the global luxury furniture market include Muebles Pico, Nella Vetrina, Laura Ashley Folding PLC, Henredon Furniture Industries, Inc., Giovanni Visentin srl, Iola Furniture Ltd., Turri S.r.l, Herman Miller, Inc., Heritage Home Group LLC and others. Companies born to serve the made to order requirements are now opening their stores in different geographical locations to provide buyers creative designs that go well with time. Besides this, many furniture manufacturers are partnering up with artists or interior designers to create and offer a luxury range of furniture.
Opportunities: There is a major opportunity for authentically designed furniture which is commercially viable. Although there are antique pieces of furniture, due to the requirement of functionality unlike wine, most furniture required to be used does not increase in value with time. The primary selling point for furniture luxury is the functionality and the design coupled with the extent of comfort. Most luxury furniture is manufactured using wood and that has been the major driver of the wooden furniture market being worth over USD 6 Billion in the year 2017.
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Ankur Gupta, Head Marketing & Communications