The COVID-19 pandemic has affected just about every sector especially gatherings at large-scale events. The furniture suppliers to these events also find these to be harsh times for the micro-economy of this sector.
The growth of the furniture industry has traditionally been thought of as unstoppable. This is because sales can come from traditional channels or through the private sector and events, commercial office spaces, restaurants, hotels etc. The logic behind this assumption is that rising expenditures on listed sectors expand the revenue of the furniture industry as almost no brand across industries goes without the basic need for furniture. In this way, the furniture industry is one of a kind that supports the other sectors of society.
One of the major segments to be hit by the pandemic is the wood business, which requires a strategic algorithm of ethics, craftsmanship, dedication, patience and discipline. Its market has always been on an upswing for various brands, but the lockdown has slowed down business.
In the last couple of weeks, the internal audit teams of many Indian brands noticed a gradual decline in revenue from the event management sector due to the complete derailment of its season. For all furniture brands, this has caused the termination of many bookings and sales have been low. Further, across the industry, the bookings and deals that had to be finalised in the upcoming months have been more or less cancelled due to biohazard reasons. Essentially, the industry is facing its worst nightmare with no guaranteed stability. The continued decline in sales due to the pandemic will make it difficult for brands/sectors to have the upper hand anytime soon in sales.
However, even during the present crisis, many brands and thought leaders in the industry are looking to innovate with what they believe will be the key driving force in the months to come: eco-friendly furniture. According to many studies, 46 percent of the growth in this market will be seen in the APAC(Asia-Pacific) region with market growth accelerating at a CAGR of almost 6 percent. In fact, the studies also show that the incremental growth of the industry in USD, between the years 2018-2023, was found to be $ 22.32 billion.
Although the market is fragmented between major and minor suppliers of office furniture, the trending demand for eco-friendly furniture will offer immense growth opportunities in the coming months. Further, to make the most of this trend, market vendors will focus on the growth prospects in the fast-growing segments, while maintaining their positions in the slow-growing segments.
Finally, brands have also started identifying an increasing consumer preference for multifunctional and customised furniture as one of the prime reasons driving the office furniture market growth during the next few years. The identification of these trends was made after careful study of the market size, trends and industry analysis.
Finally, however, experts saw an industry-wide decline in output by 10 percent in the first three months of this fiscal year. But the manufacture of wood reused in packing and construction saw an 18 percent jump. It could also have been helped by an 8 percent rise in exports in that period. This means that government intervention may help in creating an upswing in sales for various brands. By encouraging exports of readymade furniture, the government will not only allow the industry to grow during a slump, but it will also pave the way for future deals that can be made with foreign brands. Therefore, allowing the opening of a bilateral channel of communication and opportunities of collaboration between the Indian and the global brands. This, we believe, could provide the right stimulus that our industry has been waiting for this past couple of weeks.