India Laminate Market Forecast
The relevance of research
Laminate is one of the most popular floor coverings in India. The subject of this study is the Indian laminate market as part of the flooring market. The laminate market in this study is understood as a set of enterprises that form the supply of the market, the number of consumers that form the demand of the market, as well as the relationship that arises between sellers and consumers
Purpose of the study
Analysis of the state of the laminate market in India, assessment of the market size, analysis of competitors, as well as identification of factors affecting the laminate market
Content
Chapter 1. Key Components of the Laminate Market
1.1. Market size
1.2. Laminate Market Growth Rate
1.3. The ratio of imported and domestic products in the market
1.4. Volume and dynamics of laminate production
1.5. Imported laminate. Volume and dynamics
1.6. Export of laminate. Volume and dynamics
1.7. Share of exports in production
Chapter 2. Economic characteristics of the market
2.1. Laminate Market Trends
2.2. The main problems of the industry
2.3. Estimation of the number of buyers and their financial capabilities
2.4. Estimated consumption per capita
2.5. Analysis of sectoral indicators of financial and economic activity
2.6. Compact location of industry companies in certain regions
2.7. Laminate Market Life Cycle Stage
Chapter 3
3.1. Economic components
3.2. Social Components
3.3. Technological components
3.4. Political Components
3.5. STEP analysis of the laminate market
Chapter 4. Assessment of the degree of competition
4.1. Scale of competition (local, regional, national, global)
4.2. Number of competitors and relative market shares of the largest competitors
4.3. Competition from substitute products
Chapter 5 Industry Forecasts
5.1. Analysis of the impact of recent crises on the industry (the global crisis of 2008 and the currency crisis in India in 2014)
5.2. Analysis of the impact on the state aid industry at the current date
5.3. Assessment of the extent of the impact of the crisis on the analyzed market. Barriers in the laminate market
5.4. Prospects and growth drivers for the laminate market
5.5. Forecast for the development of the laminate market in the context of the current economic crisis
Chapter 6 Forecasting Methodology
6.1. Methods for forecasting key industry indicators
6.2. Sources of information for forecasting
6.3. Timing of forecasting
Research excerpt
Chapter 1. Key Components of the Laminate Market
1.1. Market size
Laminate is one of the most popular flooring in India.
By definition, it is a multi-layer laminated flooring consisting of wood-based boards, the surface of which is covered with a polymer film:
- the top layer is a lamination film made of acrylic and melamine resin, which serves as a protective coating of the material against abrasion, damage, and fading of the decorative layer;
- a decorative layer that imitates a wood pattern, marble, parquet, tile or any other texture - this is a paper layer with a pattern applied to it;
- base - wood board (various types of chipboard and fiberboard).
- the bottom layer is a waterproof layer of melamine, which is stabilizing, giving stability and rigidity to the panels, protecting them from deformation.
Despite the fact that the laminate consists of several layers, its thickness is only 6-12 mm, while their soundproofing properties directly depend on the thickness of the plates.
The main distinguishing feature of the laminate in comparison with other floor coverings is its high strength and resistance to various kinds of influences, which is achieved through the use of a laminating film as a surface coating. Made on the basis of acrylic and melamine resins, it has high resistance to abrasion, as well as other mechanical and chemical influences. At the same time, the film thickness varies for different brands of laminate, which is an indicator of its wear resistance. This allows you to use different laminate in different rooms - bedroom, hallway, kitchen, office space. Among other things, the laminate can imitate any textures and patterns. In particular, this flooring can easily imitate parquet, while the quality of the laminate is higher, since the varnish coating of the parquet cannot be compared in quality with the acrylic-melamine film of the laminate. Thus, the laminate combines all the best qualities - beauty and aesthetics, quality and durability, environmental friendliness and reliability.
According to the laying method, the laminate is divided into two types: adhesive and glueless or castle.
Also, the laminate differs in classes that determine the wear resistance of the flooring. According to European standards, the laminate has the following classes:
21 - designed for non-intensive use in residential areas.
22 - used in residential premises with an average intensity of use.
23 - for residential premises with intensive use - in kitchens, hallways.
31 - for commercial premises with low traffic.
32 - used in commercial premises with medium traffic, for example, in offices.
33 - for commercial use in areas with high traffic intensity.
The subject of this study is the Indian laminate market as part of the flooring market. The laminate market in this study refers to the totality of enterprises that form the supply of the market, the number of consumers that form the demand of the market, as well as the relationship that arises between sellers and consumers.
1.2. Laminate Market Growth Rate
Laminate market growth rate in 2014-2021 allow us to state that the market is in a stagnation stage with the prospect and potential for further growth at multidirectional growth rates, this is indicated by a positive trend in the development of the construction industry, which determines the growth of the markets for building and finishing materials, which include laminate as a floor covering.
Diagram 1. Dynamics of the laminate market volume, 2014–2021
The dynamics of the volume of the Indian laminate market in physical terms during the study period has an ambiguous development trend, which is due to the growth of domestic production with an increase in exports and a decrease in imports.
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1.3. The ratio of imported and domestic products in the market
The share of imports in the laminate market in India is low during the study period and amounts to ...% ...
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1.4. Volume and dynamics of laminate production
Chart 3. Laminate production volumes in India, 2014-2021
According to the calculations of GidMarket analysts, the volume of laminate production in India in 2021 amounted to ...
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It should be noted that the dynamics of production volumes does not correlate with the dynamics of the volume of the domestic laminate market in the study period, since the volume of the market in this case, with an increase in production volumes, an increase in exports is observed, and the share of imports in the market is insignificant and tends to decrease. Further, a detailed examination of the import and export indicators shows that the share of exports in production is quite significant, respectively, the work of Indian manufacturers is equally directed to the domestic and foreign markets, which entails an increase in imports with an increase in demand for laminate in India .
1.5. Imported laminate. Volume and dynamics
The share of imports in the laminate market during the study period is small, has an ambiguous trend, while a pattern can be traced - with an increase in the production of laminate in India, the volume of exports also increases, which often entails a slight increase in imports to meet domestic needs.
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1.6. Export of laminate. Volume and dynamics
Chart 5. Volume and dynamics of laminate exports, 2014–2021
During 2014-2020 India's laminate export volume has a clearly positive trend...
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1.7. Share of exports in production
The share of exports in the production of laminate in India during the study period has been increasing annually ...
It should be noted that with an increase in laminate production in the study period, the share of exports also increases ...
Chapter 2. Economic characteristics of the market
2.1. Laminate Market Trends
The Indian laminate market is primarily influenced by consumer preferences regarding flooring design. In 2021-2022 The influence of the following trends in design is noted:
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Changes in consumer design preferences have an impact on the demand for laminate: demand will be higher for collections that are currently in trend, respectively, manufacturers are working on changing design, developing new collections, changing technologies for the production of popular solutions (laminate of different sizes, changing locks for laying a Christmas tree).
From the above, the following conclusions can be briefly drawn:
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It is also worth noting that in physical terms, the Indian laminate market will definitely continue to grow, for several reasons: an increase in production volumes, which is due to the launch of new production lines by existing market players; growth in the rate of delivery of residential and commercial space; carrying out repairs in housing of the “old stock”, which is due to the transition of part of the population to remote work and the desire to create a more comfortable, at the same time working, environment in a house or apartment.
2.2. The main problems of the industry
The main problems of the industry, at the moment, experts attribute the disruption of supply chains, disruption of banking ties and the dependence of laminate manufacturers on the supply of spare parts for imported equipment at Indian factories.
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In fact, we can say that large and medium-sized forestry enterprises, at least in the medium term, will not be able to change anything in their production chains and will operate the existing equipment, resolving the issue with spare parts or with equipment suppliers who will continue to work in one way or another in the Indian market, or will be forced to look for parallel import channels to supply the necessary standard components, and, following the example of large timber companies, will create their own machine shops or will place orders for the production of spare parts from Indian metalworking companies.
2.3. Estimation of the number of buyers and their financial capabilities
During 2019-2021 India's population shows a slight negative trend.
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2.4. Estimated consumption per capita
Chart 9. Consumption in the laminate market per capita, 2014-2021
The volume of per capita consumption in the Indian laminate market is highly correlated with the dynamics of the market volume, since the producer price of laminate in the Indian market has increased annually, with little change in population. Along with this, the dynamics of consumption volume has a steady positive development trend, which is facilitated by price changes and high demand.
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2.5. Analysis of sectoral indicators of financial and economic activity
Let us consider the sectoral indicators of financial and economic activity of the industry of production of laminate and similar laminated materials, wood-based panels from wood and other lignified materials in general, which includes the activities of enterprises for the production of laminate, to determine the sustainability of the industry and enterprises operating in it.
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Profitability before tax is an economic indicator that characterizes the ratio of gross profit to revenue, in other words, how much profit is in each ruble from services sold.
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The current (total) liquidity ratio is a financial ratio equal to the ratio of current (current) assets to short-term liabilities (current liabilities). This is the most common and commonly used measure of liquidity. The ratio reflects the company's ability to repay current (short-term) liabilities at the expense of current assets only. The higher the indicator, the better the solvency of the enterprise.
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The absolute liquidity ratio is a financial ratio equal to the ratio of cash and short-term financial investments to short-term liabilities (current liabilities).
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2.6. Compact location of industry companies in certain regions
To determine the compactness of the location of companies in the industry, consider the number of enterprises producing laminate in the states of India, according to Rosstat, which will indicate a high concentration of companies in this region.
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In other words, four enterprises have production facilities in the Moscow region, the production facilities of other market players are located in the Republic of Tatarstan, Smolensk, Nizhny Novgorod, Tomsk and Kostroma regions. Consequently, the most compact market players are located in the Moscow region, both in terms of the number of enterprises and in terms of the revenue of such enterprises.
2.7. Laminate Market Life Cycle Stage
The laminate market in India has reached a stage of maturity, close to saturation. The maturity stage represents the stage of stability in terms of demand, technology and level of competition.
The maturity stage is characterized by a stable level of sales with a slowdown in growth rates. The product reaches its peak of sales and provides a stable income due to the formed consumer base with the prevailing, at that moment, preferences. The level of profit at the stage of maturity may decrease slightly. To maintain and increase profit levels, it is necessary to: increase investment to maintain sales levels, reduce prices and promotions, with a deep price reduction for large buyers, regular customers, conduct research and development to stimulate a new stage of growth.
The maturity stage is the longest of all life cycle stages. It is characterized by stable consumption, popularity and wide representation of the product - all this ensures a stable level of sales over a long period.
The level of competition in the market becomes maximum and stabilizes, which, in the face of slower growth, creates a more aggressive struggle for existing consumers. A high value at the stage of maturity gets the speed of the company's reaction to the actions of competitors.
At this stage, the average price level is formed, and each market participant has an established price positioning. Price competition is decreasing, the role of the product brand is increasing, and sales promotion by lowering the price is short-term.
The breadth of the assortment at the stage of maturity does not increase, but undergoes a number of modifications and improvements to existing proposals. All changes in the range are aimed at maintaining the relevance and modernity of the product, by tracking trends in consumer preferences and technologies. The emergence of new technologies, the improvement of previous approaches at the stage of market maturity are characteristic.
Chapter 3
3.1. Economic components
Gross domestic product (GDP) is one of the most important macroeconomic indicators.
It reflects the market value of all final goods and services intended for direct consumption, which were produced for a certain period (quarter, year) in all sectors of the economy on the territory of the state for consumption, export and accumulation, regardless of the nationality of the factors of production used.
GDP is expressed in national currency, or (if necessary) converted into foreign currency at the exchange rate, and can also be presented at purchasing power parity.
Chart 14. India's GDP evolution, 2013-2021, available period 2022
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3.2. Social Components
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Changing consumer habits - in recent years, an increasing number of Indians use the Internet to find the necessary information, receive government and other services, which affects the change in habits: people prefer social networks and news feeds to reading newspapers and magazines, personal meetings are replaced by communication in instant messengers , purchases are made in online stores with delivery, etc. Such changes have a direct impact on the laminate market, as well as on the building materials market in general - citizens began to buy more online during the pandemic in 2020, which increased the demand for home delivery of goods. After the lifting of restrictions, delivery has not lost its popularity, which should be taken into account by companies working with the retail segment. As for the wholesale segment, online purchases are also relevant here: the possibility of online ordering, exchanging documents in electronic form is important, which affects the speed of the transaction and provides a certain convenience.
3.3. Technological components
Dependence on foreign suppliers of components for equipment for the production of laminate, which is mainly produced abroad;
The development of online trading is a definite plus for the convenience of ordering and paying for goods, as it reduces the time to find a supplier and a buyer. Placing an order makes the process of paying for goods and exchanging documents more convenient;
The laminate manufacturing process is constantly being improved, technological modernization of laminated panels is taking place (improving the functionality and wear resistance of interlocks, endowing the boards with thermal and sound insulation characteristics, improving the resistance of the entire coating to liquids, etc.), improving the appearance of the laminated floor (using various design solutions , creation of material structure, variation of shapes and sizes of finished products). However, the pace of technological change in the market can be considered moderate.
3.4. Political Components
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The Government of India has been stimulating an increase in housing rentals in India in recent years, which, in turn, stimulates the growth of the building materials market, including laminate;
the production of laminate in India is regulated by state standards (24 GOST), however, GOST for laminate as a finishing material was developed not so long ago, for a long time the laminate was tested for compliance with the requirements of GOST 4598-86, while the activities of manufacturers are not subject to licensing and mandatory certification , however, the presence of certificates for manufactured products confirms the quality of products and helps to establish sales in large networks or in export directions.
3.5. STEP analysis of the laminate market
Based on the analysis of the factors affecting the laminate market in India, there is a predominantly positive effect of the main number of factors on the market, and, accordingly, on demand.
Chapter 4. Assessment of the degree of competition
4.1. Scale of competition (local, regional, national, global)
According to experts and participants in the woodworking and laminate production market, the market as a whole is mature and competitive. The largest laminate manufacturers have fairly large market shares, as the volume of imports in the Indian market is negligible.
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Among the main competitors in the laminate market are full-cycle companies - from wood processing to laminate production, while some Indian manufacturers are part of large international companies and receive raw materials from woodworking enterprises located abroad, but also part of such companies.
The level of competition in the market as a whole is quite high, which is due to the availability of laminate substitute products (other floor coverings), in this case, the end consumer makes a choice according to several parameters: first of all, this is the ratio of price and quality, then availability in promotion and sales channels .
4.2. Number of competitors and relative market shares of the largest competitors
In the Indian laminate market, there are nine Indian companies operating in the production and sale of laminate and wood-based panels, as well as foreign companies. The main activity of the largest companies is the production of plywood, wood veneered panels and similar laminates, wood-based panels and other lignified materials. Since the share of imported products on the market is small, the largest importers of laminate and flooring are not among the main market participants.
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8 companies can be considered the largest in the laminate market - these are companies that have stable annual revenues in all areas of activity, the products of such companies can be ordered online on the websites of enterprises, through a dealer network or purchased in stores of large federal chains selling building and finishing materials, except In addition, manufacturers are exporters of laminate and other products of their own production.
The market shares of the largest market operators are calculated based on the volume of laminate production by such enterprises in 2021 (calculated by GidMarket analysts).
The market leader is...
4.3. Competition from substitute products
Laminate refers to floor coverings that are used for decoration of premises for various purposes. The decision on choosing the type of flooring should be determined by a number of factors, primarily the functional purpose of the room in which this or that type of flooring will be used. Consider the main types of flooring as laminate substitute products.
- Parquet is the most prestigious and common type of flooring for the home.
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- Ceramic tiles are the best flooring for the kitchen, where the likelihood of water and grease getting on the floor increases significantly.
- ...
- Linoleum is the most common type of flooring, until recently most often found in standard apartments.
- ...
- Another type of floor covering belonging to a number of artificial materials is PVC.
- ...
Chapter 5 Industry Forecasts
5.1. Analysis of the impact of recent crises on the industry (the global crisis of 2008 and the currency crisis in India in 2014)
In 2020, many markets felt the impact of the pandemic and the onset of the economic crisis, the laminate market in India was no exception, but the crisis in 2020 affected it to a lesser extent than the tourism, entertainment, catering, and transport industries. In 2021, the influence of many of the trends of 2020 continued, while in February 2022, in connection with the military operation in Ukraine, a new stream of sanctions hit India, which affect the economic situation in the country and Indian markets, respectively.
Consider the impact of recent crises (the global crisis in 2008 and the currency crisis in India in 2014) on the industry and the laminate market in particular.
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5.2. Analysis of the impact on the state aid industry at the current date
Forecasting the development of the laminate market in India is impossible without an understanding of the economic situation in the country, as well as the measures taken to support business in the face of the strict sanctions policy of a number of countries.
The Government of India has proposed a number of measures to support the economy and business, adopted by the Parliament of India and approved by the President.
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5.3. Assessment of the extent of the impact of the crisis on the analyzed market. Barriers in the laminate market
As noted earlier, the main problems of the laminate industry are dependence on the supply of imported equipment and spare parts, dependence on prices for raw materials, materials and resources. In the current difficult economic and geopolitical situation, the problems of the industry have aggravated, in addition, experts and market players now include here the violation of supply chains and banking ties. The usual approaches developed over the years stop working, and there is no time to test new hypotheses: each new week can be characterized by a change in market conditions and another change in the structure of demand.
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5.4. Prospects and growth drivers for the laminate market
The Government of India has been stimulating an increase in housing rentals in India in recent years, which, in turn, stimulates the growth of the market for building and finishing materials, including laminate.
In addition, sustainable demand for laminate flooring is ensured by its properties and moderate pricing policy (compared to parquet and parquet boards). In recent years, manufacturers have been trying to improve the functionality and durability of interlocks, to endow the laminate with thermal and sound insulation characteristics, to improve the resistance of the entire coating to liquids, etc. In accordance with popular design trends, there is also an improvement in the appearance of the laminate floor: the use of various design solutions, the creation of material structure, the variation in the shapes and sizes of finished products.
Based on the above facts, the main drivers of growth and development of the laminate market in the near future will remain an increase in the rate of housing commissioning and the demand for laminate among consumers due to its qualities.
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5.5. Forecast for the development of the laminate market in the context of the current economic crisis
The market analysis was carried out on the basis of methods based on identifying trends over time, adjusted for expert opinion in the industry. When compiling the forecast, methods of mathematical modeling, mathematical analysis and statistics were used, adjusted for market trends and expert opinions.
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Chapter 6 Forecasting Methodology
6.1. Methods for forecasting key industry indicators
Modern statistical forecasting methods are used, taking into account the actual dynamics of the industry and the impact of the current and forecast general economic situation.
In addition, when compiling the forecast, changes in real incomes of the population, trends in consumer preferences in a crisis, development forecasts and the degree of impact of other factors affecting the industry are taken into account.
6.2. Sources of information for forecasting
- Industry volume over the past 8-9 years
- Industry dynamics in 2008-2009, in 2014-2021*
- Dynamics of macroeconomic indicators over the past 9-10 years
- Current public assistance plans
- Databases of the State Statistics Committee of India
- Indian Revenue Service databases
- India Customs databases
- Open sources (websites, portals)
- Issuer reporting
- Company websites
- Media Archives
- Regional and federal media
- Insider sources
- Specialized analytical portals
6.3. Timing of forecasting
The forecast belongs to the medium-term category - 5 years (2022-2026)
Diagrams
Diagram 1. Dynamics of the laminate market volume, 2014–2021
Diagram 2. The ratio of imported and domestic products in the laminate market, 2014–2021, %
Chart 3. Laminate production volumes in India, 2014-2021
Chart 4. Volume and dynamics of laminate imports, 2014–2021
Chart 5. Volume and dynamics of laminate exports, 2014–2021
Chart 6. Share of exports in production, 2014–2021, %
Diagram 7. Population dynamics in India, as of 01 Jan. 2013–2022
Chart 8. Dynamics of real income of the population of India, 2013-2021, available period 2022
Chart 9. Consumption in the laminate market per capita, 2014-2021
Chart 10. Profitability before tax (profit of the reporting period) in the laminate industry in comparison with all sectors of the Indian economy, 2016-2021, %
Diagram 11. Current liquidity (total coverage) for the laminate industry for 2016–2021, times
Diagram 12. Compactness of location of companies in the industry in certain regions
Figure 1. Laminate market life cycle stage
Chart 14. India's GDP evolution, 2013-2021, available period 2022
Chart 15. Monthly dynamics of the US dollar against the rupee, 2017 - available period 2022, Rs. for 1 US dollar
Diagram 16. Shares of the largest competitors in the laminate market in 2021, %
Chart 17. Forecast of laminate market size in 2022-2026
Tables
Table 1. Gross Margin of the Laminate Industry Compared to All Industries in India, 2016-2021, %
Table 2. Absolute liquidity of the laminate industry compared to all sectors of the Indian economy, 2016-2021, times
Table 3. STEP analysis of factors affecting the laminate market
Table 4. The main companies participating in the laminate market in 2021
Table 5. Assessment of the impact of recent crises on the industry
Table 6. Analysis of the impact on the industry of the state aid proposed to date
Table 7. Forecast indicators of the development of the Indian economy
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