THE GLOBAL CONTEXT – CSIL FINDINGS

According to CSIL estimates, furniture consumption reached US$ 418 billion in 2012, with almost 50% of the market being in Asia (China, Japan, India, South East Asia) another 25% in Europe and 20% in America.

The trend of recovery in consumption levels is on the way, but according to CSIL forecasts for the coming year, market growth potential varies sensibly across the different geographical areas.

Within this context there are market segments performing better than others and offering opportunities.

According to CSIL data gathering and field research this is true for example for the luxury market where the demand driver is the number of millionaires and for children furniture where two major factors affecting consumption are the number of babies and children and the purchasing power of parents.

According to the United Nations, the population under the age of five in developed economies including the United States, European Union and Japan totalled around 50 million in 2010. The average household disposable income in these developed economies reached US$50,000 or above. The BRIC countries together had some 230 million babies and children under the age of five in 2010, with China and India being the main contributors. This figures, together with the economic booms in the past decades and increased income availability translated to increasing per capita furniture spending (see below), with new opportunities for companies targeting the babies and children segment.

Some figures from CSIL FIELD market research

At a global level, there are estimates for a +30% growth in the next four years in the global market for baby and children products products (baby food, clothes, footwear and accessories, toys, health and personal care products, furniture..), thus making it a fast growing market where, together with opportunities, also competition is increasing and retailing channels are evolving (eg. in the US, youth furniture comprised 4% of total selling space on traditional furniture stores) and consumption patterns are changing (eg. today’s moms are finding new products and gaining parenting advice from online blogs more than in the past).

In particular, demand for children’s furniture is on the rise in China (the number of children aged 0-14 reached 16% of the population), with increasing awareness of the importance of furniture to child development. Beds and tables and chairs accounts for the large majority of children furniture consumption.

According to CSIL estimates children bedroom furniture accounts for around 5% of total home furniture sales in China (15% if considered in quantity).

Around 15% of the children furniture market is made of upper end/luxury items.

The market is largely satisfied by domestic brands but import is increasing too.