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Distribution in India. When furniture consumption peaks

2014-04-01

India is one of the main furniture markets in the world, due to a huge domestic market of over 1.2 billion inhabitants. According to CSIL brand new report Furniture Distribution in India, local furniture consumption is expanding rapidly and reached a new peak of US$ 14.8 billion in 2013, over three times higher than in 2002. A further 4%-5% yearly increase is forecasted for the coming two years. Market values are considered at retail prices and include both furniture and furnishings (decorative lighting, mattresses, accessories and other home related items).

Why to go to India?

The first reason is that more and more affluent Indians prefer to buy branded furniture (15% of the market until yesterday, now around 30%). Branded products and increasing imports of low-cost furniture are now challenging India's highly skilled carpentry industry. The second reason is: after recent policies to allow 100% foreign direct investment (FDI) in singlebrand retail, competition is going to be intense in the near future for furniture companies in India. Just to mention IKEA’s Rs 10,500 crore investment (Euro 1.2 billion). China, Italy and Malaysia are the main furniture exporters to India. But also Scandinavian (Bo Concept) and Americans (Maitland-Smith) are opening their monobrand stores over there. The CSIL report focuses on suggested 8 Megacities and 6 Indian States with expected high growth of household expenditure by 2020.

Maharashtra, one of the targeted markets, today hosts around 14% of urban population and represents 22% of furniture consumption (approximately US$ 3,250 million). Future growth for Mumbai, nashik and Pune metropolitan areas is given up to 2020. Mumbai (previously known as Bombay) is the most populous Indian city and the 4th largest one in the world. Known as India’s commercial and entertainment capital (Bollywood), the city generates 6.6 % of India’s gDP and 30% of tax collection, and it ranks 7th in the list of "Top Ten Cities for Billionaires" by Forbes maga-zine. Mumbai is the third most expensive office market in the world, and ranked among the fastest cities in the country for business start-up. Among the largest distributors with headquarters in Mumbai there are: godrej Interio, home Town, @home and Durian.

Andra Pradesh today hosts around 7% of urban population and represents 9% of furniture consumption (approximately US$1,330 million). Andhra Pradesh has the biggest seaport at Visakhapatnam, with feeder services to Europe, Russia, USA and the Asia Pacific area.

Bangalore, known as the Silicon Valley of India, is an IT/software hub. 5th largest Indian city, Bangalore also is home to R&D centres of companies like Airbus, Bosch, Boeing, gE, gM, google, Microsoft, Mercedes-Benz, nokia, Oracle, Philips, Shell, and Toyota. The city is a preferred retail destination after Delhi and Mumbai. Total operational mall space (as for 2012) is 7.65 million sq. m. Mantri Square at Malleshwaram, Phoenix Market, City at Whitefield and Brigade Orion at Rajkumar Road are key regional malls, while The Forum at Koramangala and Royal Meenakshi Mall at Bannerghatta Road are prominent community malls in the city. There are about 25 existing Malls, plus 15 under construction and 15 in the pipeline.

By 2016, Bangalore is expected to witness additional 5.67 million sq.ft. of retail space. Luxury retail emerged as a new concept in the city with the successful establishment of UB City at Vittal Mallya Road. Other high street locations are Lavelle Road and Indiranagar 100 Feet Toad (Viveks, Veneta Cucine). Bangalore is expecting to witness the entry of major brands like Carrefour, WalMart, and IKEA.

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