Top urban furniture markets
Cities are geographic concentrations of people, skills, economic activities and capital infrastructures, which are making them the key actors of the world economy’s growth. Cities began to emerge as strategic places for the new world economy because of their specialized differences and knowledge. Companies willing to increase and extend their activities in a new market cannot disregard the development and peculiarities of the cities within a country.
A SELECTION OF 30 WORLD CITIES
CSIL worked on the selection of 30 world cities which are deemed to offer the best business opportunities to furniture and furnishings players in the coming years.
The selection was driven by various dimensions, ranging from the number of ultra-rich individuals, the economy and population growth and the level of furniture growth demand, to the capacity to enhance resources through efficient infrastructures, to create a favourable environment for doing business, as well as to offer investment opportunities. Hence, the aim of the study is to shed light on a selection of cities, which are deemed to offer good business opportunities to furniture and furnishings players in the coming years.
If we consider the cities’ furniture estimated market size, it’s clear that the largest cities such as New York, Shanghai, Beijing, and Tokyo are the top furniture markets with a value over US$ 5.7 billion, followed by Los Angeles, Paris, London and Seoul. But if we analyse the furniture demand forecasts over the 2018- 2023 period, it is evident the remarkable growth rates of Chinese and Indian cities (over +50%).
Rising income levels, global economic exposure of the city, population's growth, development of residential and office markets are amongst the factors, which are expected to boost furniture demand in China and India, at faster growth rates than the other geographical areas.
It is worth noting that some cities, both in China and India, are expected to face a strong economic and demographic growth by 2023 (higher than 10% and 50%, respectively), which in turn would be able to significantly push demand for the furniture market.
Shenzhen, also known as the 'instant city', is amongst the youngest cities in China, it has faced a fast urban development and has rapidly become a megacity (over than 10 million of inhabitants). Bangalore and Delhi are other examples of fast-growing cities expected to face an increase in population higher than 10% by 2023.
DESIGN AND FURNITURE CONSUMPTION
A peculiarity of many selected cities from this area is the rising interest towards design and high-end products.
Beijing’s design industry is increasingly expanding and actively promoted by the city government. Every year a series of events are hosted in the city. Beijing is also home to numerous design institutes.
Shenzhen is well-known for design, hosting more than 6,000 design companies employing more than 60,000 people. On November 2008, UNESCO named Shenzhen a member of its Creative Cities Network and awarded Shenzhen the title of City of Design.
In Bangalore luxury retail has emerged as a new concept in the city with the establishment of UB City at Vittal Mallya Road in 2008.
In 2010, Seoul was designated World Design Capital by the UNESCO.
Also, Hong Kong is a regional design centre providing a rich source of innovative products and design talents. The ‘Business of Design Week’ (BODW) held in Hong Kong is one of the largest annual design events in Asia.
The impressive economic growth experienced by Chinese and Indian cities is a factor to watch. The increasing economic welfare of the cities is expected to boost households’ disposal income and to increase consumption as well by 2023. In these cities, increasing numbers of international high-end furniture brands have adopted multichannel strategies by establishing stand-alone showrooms, speciality stores in high-end furniture retailers, working with multiple regional distributors covering key markets, developing online or online-to-offline channels through reputable retailers or online platforms.
With regard to North American cities, furniture consumption of households is expected to further increase by 2023, but at a slower rate. The North American cities are very attractive for international furniture brands, and the same is true also for Europe.
Cities such as London and Paris are large and mature markets, but they still display credentials, which are likely to boost the demand for the furniture sector in the coming years, although at slower growth rates.
In the Middle East, retail markets in Dubai and Abu Dhabi have been recently attracting a host of new international retailers. Both these cities are increasingly diversifying their economy, shifting from oil-related activities to the service sector. Also, over recent years, huge investments have been addressing real estate, tourism and hospitality industry, culture and entertainment, which in turn have boosted demand for the furniture sector.
Top Urban furniture markets. Potential demand and forecasts for 30 large cities | May 2019, I Ed. , 79 pages - 30 world cities to focus on in order to see where the international furniture and furnishings players can find good business opportunities in the coming years.
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