The Indian furniture sector is largely unorganised, where handicrafts comprise about 85% of furniture production. But the introduction of GST, and measures to curb cash transactions and boost transparency, will lead to the transition of unorganised entities into the organised sector.
The Association of Furniture Manufacturers and Traders states the organised furniture segment has been growing 20% annually. It is slated to exceed $32 billion by 2019, as per a World Bank study. During 2014-19, the online home décor market is projected to expand at a CAGR of 50.42% in revenues. The luxury furniture market is expected to increase at a CAGR of 4.1% during 2015-20, to touch $27.01 billion by 2020. However, office furniture category leads the overall industry.
FDI in realty, Housing for All by 2022 and development of 100 Smart Cities will spark higher demand for furniture industry, as will reforms and incentives in retail, hospitality, tourism and hospitals. Other trends are rising disposable incomes and urbanisation, where the focus on aesthetics and urbane lifestyles are leading to higher usage of bespoke furniture.
In the age of automation, skilling has acquired a wholly new dimension. With tastes evolving, people are no longer satisfied with traditional items. The trend is towards sleek, western-style furniture that is aesthetically appealing and has a high degree of workmanship.