Forecast for the development of the kitchen furniture market
The relevance of research
Kitchen furniture is the second largest segment of the home furniture market, second only to upholstered furniture and accounting for about a fifth of the market.
The kitchen furniture segment is one of the most difficult segments of the furniture market in India to evaluate, due to the relatively large “grey” (illegal) sector. A significant volume of unrecorded sales is determined by the work on the market of a large number of small, including ""garage"" manufacturers, who manufacture custom-made kitchens according to individual projects.
Purpose of the study
Analysis of the state of the kitchen furniture market, assessment of the market volume, analysis of competitors, consumers, as well as identification of factors affecting the market
Content
Chapter 1. Economic characteristics of the kitchen furniture market
1.1. Market size
1.2. Market Growth Rate
1.3. Market trends
1.4. The main problems of the industry
1.5. Industry life cycle stage
1.6. Estimation of the number of buyers and their financial capabilities
1.7. Estimated consumption per capita
1.8. The pace of technological change and product innovation
1.9. Sales channels
1.10. Compact location of industry companies in certain regions
Chapter 2. General economic environment
2.1. Economic components
2.2. Social Components
2.3. Technological components
2.4. Political Components
2.5. STEP-analysis of the market
Chapter 3. Assessment of the degree of competition
3.1. Scale of competition (local, regional, national, global)
3.2. Number of competitors and relative market shares of the largest competitors
3.3. Competition from substitute products
Chapter 4 Industry Forecasts
4.1. Analysis of the impact of recent crises on the industry (the global crisis of 2008 and the currency crisis in India in 2014)
4.2. Analysis of the impact on the state aid industry at the current date
4.3. Studying scenarios for the development of the industry in terms of quarantine in connection with covid-2019
4.3.1. Single Quarantine Scenario (according to the Chinese release schedule)
4.3.2. Scenario of two quarantines
4.4. Analysis of existing cases of business restructuring in the industry
Chapter 5 Forecasting Methodology
5.1. Methods for forecasting key industry indicators
5.2. Sources of information for forecasting
5.3. Timing of forecasting
Research excerpt
Chapter 1. Economic characteristics of the kitchen furniture market
1.1. Market size
Kitchen furniture is the second largest segment of the home furniture market, second only to upholstered furniture and accounting for about a fifth of the market.
The kitchen furniture segment is one of the most difficult segments of the furniture market in India to evaluate, due to the relatively large “grey” (illegal) sector. A significant volume of unrecorded sales is determined by the work on the market of a large number of small, including ""garage"" manufacturers, who manufacture custom-made kitchens according to individual projects.
The study carried out an analysis based on data on the production, import, export, etc. of kitchen furniture based on data from official statistical sources (excluding the illegal sector).
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1.2. Market Growth Rate
The dynamics of the volume of the kitchen furniture market in India during the period under review had a wave-like character.
At the end of 2014 – beginning of 2015, some markets (including the furniture market) experienced a record level of sales: buyers were afraid of devaluation and bought durable goods (furniture, household appliances, electronics, etc.). At the end of 2015, the market volume remained at the level of 2014. At current prices, the volume of sales showed a minimal, but still positive dynamics due to a significant increase in prices for furniture products in the Indian market. In 2016, consumer demand decreased by …% compared to 2015, amounting to … billion rupees. This happened both due to a serious drop in imports, and due to a reduction in domestic production.
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Diagram 1. Dynamics of the kitchen furniture market volume, 2014 - 2019, billion Rs.
1.3. Market trends
Consider the trends in the main components of the volume of the kitchen furniture market in India.
The dynamics of the production of kitchen furniture in the period under review in terms of value was generally linear. However, in 2015 there was a decrease in growth rates compared to 2014 (growth rates of …% and …%, respectively). In 2015, the growth rate in physical terms amounted to only …%, which indicates an increase in production in value terms only practically due to price growth. The impact of the crisis, a decrease in the solvency of the population, and, as a result, a decrease in demand, led to a decrease in the production of furniture by domestic enterprises. In 2016, the decrease in physical terms amounted to …%, and the increase in prices allowed the volume of production to decrease only by …% in value terms.
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Diagram 2. Dynamics of the volume of production of kitchen furniture in India, 2014 - 2019, million Rs.
1.4. The main problems of the industry
Furniture market experts believe that there is no furniture industry in India, as there are no enterprises that would fully ensure the technological cycle of furniture production. Most companies assemble from imported components. According to experts, in such conditions it is not yet possible to talk about the full development of the industry.
One of the problems of the furniture industry is a large discrepancy in the statistics provided by Rosstat and the Federal Customs Service. In many ways, errors in statistical data are due to the fact that today most small businesses do not provide their data to Rosstat. And often they argue this by the fact that they produce furniture to order, and not serial. This also includes the illegal sector, because. take market share by selling low-quality, low-cost products.
In addition, competition with foreign manufacturers is aggravated by the fact that Indian enterprises, unlike, for example, Chinese companies, cannot give a cheap purchase price to retailers.
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Diagram 6. Cost structure for furniture production, %
1.6. Estimation of the number of buyers and their financial capabilities
The dynamics of the volume of consumption of kitchen furniture is determined by trends in the indicator of real incomes of the population (see section 2.2).
According to a study conducted by …, Indians are ready to spend less on furniture than before. At the same time, most of those who want to buy furniture do not plan to spend …
Diagram 8. The amount of spending on the purchase of kitchen furniture,%
In general, according to the 2019 survey, the number of Indians planning to purchase furniture in 2020 remains at the level of 2017 and amounts to almost …
Chart 9. Intention to purchase furniture in 2020, %
Note that there is no pronounced seasonality in furniture sales. In the summer, a small surge in sales associated with the completion of repairs in apartments, which the townspeople often prefer to do in spring or summer. Also, a surge in sales occurs at the end of the year, during sales.
Any furniture is a durable product, it is bought for at least several years. Therefore, the process of choosing and making a purchase decision is lengthy. Future buyers sometimes spend months studying offers on the market, considering, looking for the best options for themselves, getting to know manufacturers. And even when the decision is made and the furniture itself is selected, it may take some more time before the actual purchase. This is due to the fact that furniture is a rather expensive commodity.
1.7. Estimated consumption per capita
The dynamics of changes in the consumption of kitchen furniture has a wave-like character. Per capita rate in value terms …
Diagram 10. The volume of consumption of kitchen furniture per capita, 2014-2019, Rs./person
1.8. The pace of technological change and product innovation
Furniture production in any market niche is a high-tech process that requires a large investment in equipment. The pace of technological change in the market is quite moderate.
Most of the innovations in the industry are in the materials used and how they are processed. Part of the innovative furniture technologies is in the ways of decorating surfaces.
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1.9. Sales channels
According to the … survey completed in July 2019, the majority of buyers (…%) prefer to choose kitchen furniture in …
Diagram 11. Ways to choose kitchen furniture,%
Direct purchase of kitchen furniture takes place mainly in …: …% of respondents purchase kitchen furniture only in …, and …% - both in … and …, and …% - only in ...
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The sale of kitchen furniture to enterprises or institutions is carried out on the basis of confidential contracts, however, some transactions are open in cases where they are carried out through a tender. At the same time, the organizers of procurement through a tender are equally both state and commercial organizations.
1.10. Compact location of industry companies in certain regions
The largest share in the production of kitchen furniture is occupied by the Central Union Territories (…%) and the Volga Union Territories (…%). Together, these federal districts account for …% of all kitchen furniture production in India. Production in these Union Territories is close to the most attractive and concentrated sales markets.
Diagram 13. Compactness of location of companies in the industry across the Union Territories, 2019, %
For 2014-2019 Production increased the most in the Central Union Territories – by …%, North Caucasian Union Territories – by …%, Siberian Union Territories – by …%. At the same time, in the Far Eastern Union Territories there was a decrease in production by …%.
Table 3. Structure of kitchen furniture production by Union Territories, billion Rs.
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2.5. STEP-analysis of the market
Let's consider the main factors influencing the market and, accordingly, the demand in the kitchen furniture market.
Table 9. STEP analysis of factors affecting the kitchen furniture market
In general, the impact of macro factors on the kitchen furniture market in India is currently assessed by GidMarket as …
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Chapter 3. Assessment of the degree of competition
3.1. Scale of competition (local, regional, national, global)
The main volume of the Indian kitchen furniture market is formed mainly by domestic products, which currently account for about …%. For the period 2014-2019 the share of foreign-made kitchen furniture was …%-…%.
Diagram 23. The ratio of imported and domestic products in the Indian market,%
In general, a favorable situation has formed on the market for the Indian manufacturer: furniture production volumes are growing, while the share of imported products is decreasing.
During 2014-2019 the volume of kitchen furniture exports was insignificant and did not have a significant impact on the market dynamics. The share of export in production was within …%-…%.
Diagram 24. Share of exports in the production of kitchen furniture, %
Domestic manufacturers occupy …% of the world furniture market, which obviously does not meet the country's potential.
The balance of exports and imports in the kitchen furniture market is negative (the excess of imports over exports) throughout the analyzed period. Thus, the volume of kitchen furniture imported from abroad is greater than that exported from India.
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Diagrams
Diagram 1. Dynamics of the kitchen furniture market volume, 2014 - 2019, billion Rs.
Diagram 2. Dynamics of the volume of production of kitchen furniture in India, 2014 - 2019, million Rs.
Diagram 3. Dynamics of the volume of production of kitchen furniture in India, 2014 - 2019, thousand units
Diagram 4. The volume and dynamics of imports of kitchen furniture in monetary terms, 2014-2019, million dollars
Diagram 5. The volume and dynamics of exports of kitchen furniture in monetary terms, 2014-2019, thousand dollars
Diagram 6. Cost structure for furniture production, %
Figure 7. Life cycle stage of the kitchen furniture market
Diagram 8. The amount of spending on the purchase of kitchen furniture,%
Chart 9. Intention to purchase furniture in 2020, %
Diagram 10. The volume of consumption of kitchen furniture per capita, 2014-2019, Rs./person
Diagram 11. Ways to choose kitchen furniture,%
Diagram 12. Ways of buying kitchen furniture,%
Diagram 13. Compactness of location of companies in the industry across the Union Territories, 2019, %
Diagram 14. Compactness of location of companies in the industry by states of India, 2019, %
Diagram 15. Dynamics of India's GDP, 2011-2019, Q1 2020, % to the previous year, trillion Rs.
Chart 16. Monthly dynamics of the US dollar against the rupee, 2015-2020 (Jan-July), Rs. for 1 US dollar
Chart 17. Dynamics of the inflation rate in India, 2015-2020 (6 months), %
Diagram 18. Volume of retail trade in India, trillion Rs., 2015 - 2020 (6 months)
Diagram 19. Dynamics of the population of India, as of January 1, 2012-2020, million people, thousand people
Diagram 20. Population forecast in India for the period 2021-2024, million people
Chart 21. Dynamics of real incomes of the population of India, 2012-2020 (Q2)
Chart 22. Dynamics of the average interest rate on loans to legal entities, 2014-2020
Diagram 23. The ratio of imported and domestic products in the Indian market,%
Diagram 24. Share of exports in the production of kitchen furniture, %
Chart 25. Foreign trade balance, 2014 - 2019, million dollars
Diagram 26. Structure of kitchen furniture imports by countries in 2019, %
Diagram 27. The structure of exports of kitchen furniture by countries in 2019,%
Chart 28. Shares of the largest competitors in the kitchen furniture market in 2019, %
Diagram 29. Dynamics of the total revenue of the largest manufacturers (TOP-5) of kitchen furniture in India, 2014-2019, million Rs.
Diagram 30. Forecast of kitchen furniture market size in 2020 - 2024 – in case of a single quarantine scenario
Chart 31. Forecast of kitchen furniture market size in 2020 - 2024 – in the scenario of two quarantines
Tables
Table 1. Stages of development of the kitchen furniture market in India
Table 2. Data on tenders for the purchase of kitchen furniture over 1000 thousand Rs., announced from 23.07.20/23.08.20/ to / / .
Table 3. Structure of kitchen furniture production by Union Territories, billion Rs.
Table 4. Expert forecasts for the decline in real GDP in India in 2020, %
Table 5. Industrial production index by state of India (in % of the previous year), 2015 - 2019
Table 6. Dynamics of indicators for the introduction / construction of residential premises in India in 2010-2018, units rev.
Table 7. Urban and rural population in India in 2014-2019, million people, %
Table 8. Weighted average interest rates of credit institutions on loans to non-financial institutions in rupees (% per annum), 2014 - 2020
Table 9. STEP analysis of factors affecting the kitchen furniture market
Table 10. Main companies participating in the kitchen furniture market in India in 2019
Table 11. Assessment of the impact of recent crises on the industry
Table 12. Analysis of the impact on the industry of the state aid proposed to date
Table 13. State support measures for backbone enterprises
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