Asia Pacific grew the fastest for home furnishings globally but still lags behind in terms of per capita spending. There is huge potential for growth due to urbanisation and rising income levels, specifically in emerging markets, that spur household growth and stimulate demand for home furnishings such as indoor furniture. The challenge lies in the high fragmentation due to Asia Pacific’s dynamism in its demographic, consumer preferences and income levels.
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The Asia Pacific market for home furnishings grew the fastest over the review period, with a CAGR of 4%. This is due to the strong performance of emerging economies such as China and Indonesia, household growth in developing markets, and rising income levels across all countries.
Shrinking households and the rising commonality of high-rise apartment living mean that demand for outdoor living has dramatically shrunk, while multifunctional and space-saving indoor furniture such as sofa beds and bedroom furniture with storage are highly sought-after.
The evolving retail channel distribution is most prominent in emerging markets, where deeper consumer segmentation, characterised by rising income levels, have allowed retailers to diversify their channel distribution and expand their market shares.
Shares of home furnishings continue to be highly fragmented due to the sheer size of large markets such as China and India, where regional companies dominate certain states and provinces. IKEA is the only exception, with its entry into the region culminating in the brand dominating home furnishings in the countries in which it is present.
Rising incomes in developed markets such as Singapore mean that consumers are willing and able to pay for higher-priced home furnishings with value-added benefits, while the rural-urban shift in markets such as India and Indonesia will drive demand for affordable and durable home furnishings.