At the end of 2016, RBC Market Research analysts conducted a large-scale study of the Russian furniture market. The study includes an analysis of key market indicators and trends, the results of surveys of representatives of the main players and a sociological survey of furniture buyers.

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The situation on the furniture market

At the end of 2014 – beginning of 2015, some markets (including the furniture market) experienced record levels of sales: buyers were afraid of devaluation and bought durable goods (furniture, household appliances, electronics, etc.). Since then, consumer demand has been falling: in 2015, furniture sales in Russia decreased by 9.9% compared to 2014, amounting to 419.8 billion rubles. In 2016, the volume of retail sales continued to decline – it fell by 5.3% (to 397.6 billion rubles).

At current prices, sales volume demonstrated, although minimal, but still positive dynamics due to a significant increase in prices for furniture products on the Russian market. The same cannot be said about the volume of the furniture market in manufacturer and import prices: until 2014, the dynamics remained positive, but in 2015 there was a noticeable decline (by 7.3%). This happened both due to a serious drop in imports and due to a reduction in domestic production.

The trade margin of furniture retail stores has been steadily growing since 2012, and at the end of 2015 it increased even more significantly - to 85.2%. In other words, some furniture manufacturers continue to pass on part of their costs to customers.

The furniture market is very dependent on exchange rates: most components have to be purchased abroad. This is simultaneously a driver of both inhibition and growth. The crisis situation of the last two years has motivated players to optimize production and adapt the best practices of Western markets. In addition, if in the premium segment the fittings from leading world-famous manufacturers have nothing to oppose to the domestic market, then in the “average minus” category it provides good competition to the Western market.

Currency fluctuations, the subsequent rise in prices for goods and services, the fall in incomes of Russians and the decline in consumer demand have adjusted the strategies of many players. They had to optimize production processes, update the range, improve branding and loyalty programs - all this had a positive impact on the efficiency of the domestic furniture market.

New solutions

The economic crisis is forcing players to come up with new ways to develop their business. For example, an interesting trend has emerged in the primary real estate market: furniture companies, in partnership with developers, are creating ready-made solutions for new apartments. This format of work is beneficial for furniture manufacturers: furnishing apartments in new buildings allows players to maintain production volumes and not lay off workers.

This option is especially interesting for buyers in the “economy” and “economy plus” segments: it allows them to save time and money when moving into a new apartment. Furnishing is 40-50% cheaper than buying furniture yourself in a shopping center: the cost of furniture does not include rent for space, the salary of the seller and other elements.

Consumer habits

According to an analysis by RBC Market Research, already 152 out of 305 (that is, about 50%) online players have their own websites, but not all online stores offer the opportunity to fully purchase goods - many are still so-called “display windows with prices.”

Some players bet on . Thus, at the beginning of 2016, one of the largest retailers on the Russian furniture market, Hoff, launched its own online store in St. Petersburg (deliveries were carried out from a Moscow warehouse). At the end of the first half of 2016, the volume of online sales increased by 46.9% to 974 million rubles and amounted to 12.5% ​​of total sales.

According to RBC Market Research, today 21.6% of Russians make furniture purchases on the Internet.

Macroeconomics: slowing down the rate of decline

Since 2013, there has been a slowdown in the growth rate of furniture production (in real terms there has been a decline). For comparison: in 2009, furniture production decreased by 30%. The largest decline in production in the first quarter of 2016 was recorded in the kitchen furniture segment, and the minimal decline in the furniture for offices and institutions segment.

In physical terms, in the first quarter of 2016, the production of cabinets decreased by 22%, tables by 16%, and wooden beds by 13%. In the sofa segment, there was an increase of 15.4% compared to the first quarter of 2015.

Import of furniture

In 2015, furniture imports to Russia decreased by 45.8% compared to 2014. From non-CIS countries - by 48%, and from CIS countries - by 36%. In the first quarter of 2016, the decrease in foreign supplies of furniture to the Russian market was 44.1% compared to the first quarter of 2015 (from non-CIS countries it decreased by 41.4%. From CIS countries - by 56.7%).

In dollar terms, furniture imports fell by 46% in 2015, and domestic production by 37%. In the first quarter of 2016, the decrease in imports was 44%, and domestic production decreased by 22%.

In 2015, the ratio of imports and domestic production in the Russian furniture market began to change dramatically. Thus, until 2014, there was a decrease in the share of domestic products and an increase in imports. In 2015, the shares of sales of domestic and imported furniture were equal. In the first quarter of 2016, the share of domestic production exceeded the share of imports. The Ministry of Industry and Trade plans to increase the share of domestic production to 60% by 2020

Main trends

Acceleration of import substitution in the “medium” and “economy” segments. With a general decline in demand, imports decreased more significantly than domestic production (production by 13.6% in 2015, imports by 44%). In the first quarter of 2016, the decline continued - by 17% and 44%, respectively.

Continued decline in the share of the shadow sector in the volume of Russian furniture production (from 42% of total production in 2012 to 30% in 2014)

Increase in prices for both imported and domestic furniture. Due to the high share of imported components used in furniture production, the increase in prices for domestic producers in 2015 amounted to 24% (according to Rosstat)

Furniture retail: results of 2015 and forecast for 2016–2017

The decline in retail furniture sales in 2015 was more significant than in the DIY segment. In real terms, sales fell by 13%, in nominal terms, due to increased product prices, sales did not change. In 2009, the decline was less significant (10% in real terms).

Key retail trends:

Declining demand and purchasing power in all market segments, including the mid-high and high segments.

Changes in consumer behavior, expressed in the transition to a model of saving and saving, reasonable consumption (reducing impulse purchases, increasing the importance of the price-quality ratio)

Market consolidation on the part of both manufacturers and retailers is intensifying

Market leaders

The furniture market is one of the least consolidated segments of retail trade. The top 10 networks account for about 30% of the market. In 2015, the growth rate of revenue of market leaders significantly exceeded the growth of the market as a whole. Thus, sales in comparable Hoff stores increased by 6.9% in 2015 (+21.4% in 2014). In fiscal 2015, IKEA maintained its revenue growth rate at the level of 2014 (14.7%).

The IKEA company remains the undisputed market leader in Russian furniture retail. Its share is 22% of the entire market. Also, according to MA Research, in 2016 the share of the top 10 players will reach 35–40%.

In 2016, the influence of negative factors on the market will continue (decrease in real incomes of the population, inflation, high rates of consumer and mortgage lending, decrease in housing construction volumes). We can expect a decline in the furniture retail market by at least 8% in real terms

Anti-crisis strategies of furniture retailers

Optimization of networks, closure of ineffective stores. Only very large trading companies with a stable financial position can plan expansion.

Containing product prices, reducing the share of imported goods in the assortment, switching to products from domestic producers.

Revision of the assortment and introduction of economy and mid-price segment models, entry into other segments.

The development of own brands, the development of domestic production - furniture from Russian manufacturers has gained a significant advantage over imported products and has become more competitive in the “economy” and “mid-range” segments.

High-quality development, internal optimization, increasing the efficiency of business processes and individual stores.

Using various sales channels (offline, online).

Marketing cooperation between companies, joint promotion of brands.

M. A. Research specializes in researching retail and consumer goods markets; transport and logistics services, cargo transportation and other areas of business.

* The calculations use average data for Russia

This market analysis is based on information from independent industry and news sources, as well as official data from the Federal State Statistics Service. Interpretation of indicators is also carried out taking into account data available in open sources. The analytics includes representative areas and indicators that provide the most complete overview of the market in question. The analysis is carried out for the Russian Federation as a whole, as well as for federal districts; The Crimean Federal District is not included in some reviews due to a lack of statistical data.

GENERAL INFORMATION

The need for furniture is one of the main human needs; At the same time, it is characterized by a long service life and high maintainability. Thus, with a decrease in overall solvency, a person can painlessly refuse to purchase new pieces of furniture by increasing the service life of the old one.

As an object of entrepreneurship, furniture is of interest primarily to small and medium-sized businesses. Most often today, entrepreneurs choose the production of cabinet (modular) furniture - kitchen sets, wardrobes, etc. Such production is characterized by relative technological simplicity compared, for example, with upholstered furniture.

The main materials used in furniture production are natural wood, fiberboard, chipboard, MDF, metal, plastic, glass, natural and artificial stone, etc.

SECTIONS OF OKVED

All furniture production is included in subclass 36.1 of OKVED and has the following division:

36.1 – furniture production;

36.11 – production of chairs and other seating furniture;

36.12 – production of furniture for offices and trade enterprises;

36.13 – production of kitchen furniture;

36.14 – production of other furniture;

36.15 – production of mattresses.

In fact, all these areas are relatively equivalent and influence the overall picture in the group to the same extent. Therefore, in further market analysis, subclass OKVED 36.1 will be considered.

ECONOMIC SITUATION ANALYSIS

Today in Russia, according to various estimates, from 5,100 to 5,800 enterprises are engaged in furniture production, of which approximately 500 are large and medium-sized. The bulk of production is concentrated in the Central and Volga Federal Districts, which account for more than half of the total production volume in the country.

The market can be roughly divided into two main niches: household furniture and furniture for public buildings. Moreover, if in the 90s of the 20th century the share of the latter was about 15-20%, then by 2014 it increased to 40% of the total volume. Also, according to experts, in recent years there has been a slowdown in market growth, which is most likely due to overproduction in this sector given the fact that more than 55% of furniture in Russia is imported. The availability of production technologies and the once high profitability of business have given rise to a permanent increase in the number of market players and increased competition. However, the factor of the falling value of the ruble in relation to world currencies makes its own adjustments. In the coming years, we should apparently expect a significant decline in the share of imports; and a depreciation of the ruble may well lead to an increase in the competitiveness of Russian-made products in foreign markets.

However, for the domestic market the situation hardly looks rosy. If back in the crisis-free year of 2012, the main reasons for purchasing new furniture were the need to replenish the furnishings of the apartment and the need to replace furniture that was out of order (in total - 66% of respondents’ answers), today hardly anyone thinks about replenishing the furnishings, and furniture that has fallen into disrepair undergoing renovation.

Experts identify the following main market trends:

Prospects for further market growth, even with a slowdown in growth rates. This forecast, however, does not take into account force majeure factors - sharp fluctuations in exchange rates, structural changes in the Russian economy due to internal and external influences, etc.

Reducing the share of shadow business in the industry due to the impact of the crisis on small handicraft enterprises, including due to the high credit burden.

Reducing the share of the premium segment in favor of standard and budget ones.

Reducing the share of imported products.

The Internet as a furniture sales channel is losing popularity.

ANALYSIS OF DATA OF THE FEDERAL STATISTICS SERVICE OF THE RF

Figure 1. Dynamics of financial indicators of the industry (OKVED 36.1) in 2011-2015 (I-III quarters), thousand rubles.

Figure 2. Dynamics of financial ratios of the industry (OKVED 36.1) in 2011-2015 (I-III quarters)

Figure 3. Volume of production in the industry (OKVED 36.1) in 2011-2015 (I-III quarters), thousand rubles.

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According to Rosstat, the dynamics of production volume in the industry does not change significantly from year to year; from 2011 to 2014 there was some increase in the indicator. Based on the results of the first three quarters of 2015, production volume amounted to 69% of the result of the full year 2014 in monetary terms. Revenue is at the same level - 70% in 2015 of the 2014 result, with strong growth in the period 2011 - 2014. Profits, after peaking in 2013, decreased by 21% in 2014; the profit result for the first three quarters of 2015 is 96.5% of the full year 2014. The drop in profit in 2014, with a stable increase in sales volumes, was caused by an increase in production costs and a decrease in profitability indicators - gross profitability, return on sales, return on costs, etc. The increase in production costs was largely justified by the imposition of sanctions from the West, as well as fluctuations in exchange rates - a large share of components imported from EU countries, as well as China. However, the 2015 figures exceed those of 2014; If nothing unexpected happens in the country’s economy in the fourth quarter of 2015, then we can talk about some stabilization of the industry’s financial indicators.

The behavior of indicators reflecting the use of borrowed capital is characteristic. In 2014, as can be seen from the diagram, the autonomy coefficient increased significantly, the ratio of debt and equity capital decreased - entrepreneurs refuse to use bank loans due to high lending rates. On the other hand, banks are more selective in choosing the organizations they lend to.

Figure 4. Share of Russian regions in total production in monetary terms in 2011-2015, %

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As mentioned above, the main volume of products in this industry is produced in the Central Federal District and Volga Federal District - according to Rosstat, they account for 67-68% of the total production volume. The Southern Federal District is in third place with a large lag. This distribution of forces is achieved primarily through the centralization of production of large market players. The structure of revenue and profit will look similar - the volume of b2b sales is formed directly in the region of production. Distribution of finished products occurs through branded and multi-brand retail chains, most of which either do not belong to the manufacturer or are legally separate from production. All this leaves some scope for small producers at the regional level, who can occupy niches, focusing mainly on the production of furniture to order, which is problematic for federal players due to long logistics, long production times and the relative rise in price of the product. However, this also depends on the specifics of a particular type of furniture - for example, large manufacturers of upholstered furniture, even in the middle price segment, willingly accept individual orders, taking into account the customer’s wishes when choosing the material and completeness of the product. For the premium segment, an individual approach to the manufacture of products is standard.

Figure 5. Dynamics of industry sales profitability by region, 2011-2014, %

Figure 6. Dynamics of industry gross profitability by region, 2011-2014, %

Analysis of the dynamics of profitability indicators by region shows multidirectional trends. For example, the return on sales in the Far Eastern Federal District increased from 2.8% in 2011 to 26.1% in 2014. The Ural Federal District and North Caucasian Federal District also showed significant growth. The same regions also increased in terms of gross profitability. At the same time, other regions showed a slight decrease in indicators.

Based on these data and available market information, it is quite difficult to draw clear conclusions regarding the reasons for this situation. It is likely that regions, due to relatively low competition, local manufacturers and retail chains have the opportunity to set high trade margins; large players located in the Central Federal District and Volga Federal District, with a decrease in profitability, provide additional revenue by increasing sales volumes.

DIRECTIONS-CLIENTS

The main clients of direction 36.1 are:

51.15.1 – Activities of agents in the wholesale trade of household furniture;

51.47.11 – Wholesale trade of household furniture;

51.64.3 – Wholesale trade of office furniture;

52.44.1 – Retail trade in furniture;

52.48.11 – Retail trade of office furniture.

Let's analyze revenue indicators in these areas. For type of activity 52.48.11 there is no data in Rosstat.

Figure 7. Dynamics of revenue from activities in wholesale and retail trade of household and office furniture in 2011-2015, thousand rubles.

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As can be seen from the presented diagram, the growth in retail sales of household furniture in monetary terms in 2013-2014. was significant. To a certain extent, this correlates with the growth in its production volumes in the same period. The difference lies in the dynamics of indicators, which may be due to an increase in the share of imports in the period under review, a change in the ratio of the level of wholesale and retail prices, etc. Unfortunately, Rosstat does not keep statistics in physical terms.

As for the indicators of wholesale and retail trade in the first three quarters of 2015, they are expected to be at the level of 73-75% of the indicators for the full year 2014. Thus, taking into account statistical data according to which the peak of sales occurs precisely in the fourth quarter of each year, there is every reason to assume that sales volume will support the positive trend of recent years.

The situation in the office furniture niche is not so clear; it is characterized by a strong decrease in sales volume in 2014 (by 79%), but in the first three quarters of 2015 the figure has already reached 71% of the 2013 volume. Here, demand is regulated by the general situation in the business, the degree of its health: the decision to purchase new furniture is usually made when opening new offices, moving, expanding, etc. In most cases, funds are allocated last for updating office furniture.

SUPPLIER DIRECTIONS

Considering the variety of materials and technologies used in furniture production, it is not possible to single out any representative group of suppliers. These include various woodworking industries, the production of MDF, chipboard and fiberboard, the production of artificial stone, leather production, etc. Considering that the products of these areas of activity have a much wider application than the production of furniture, an analysis of their indicators will not be able to provide a complete picture in the industry under consideration.

CONCLUSION

In conditions of rising exchange rates and a focus on import substitution, the furniture production market is so far showing a fairly confident growth trend. The positive dynamics are also confirmed by the indicators of trade areas, primarily the wholesale and retail trade of household furniture as the most representative area.

Taking into account the significant increase in profitability indicators in certain regions, especially those geographically remote and isolated from the centralized production of large players, such as the Far Eastern Federal District and North Caucasian Federal District, perhaps these regions are the most interesting from the point of view of investing in furniture production.

However, against the background of the development of negative trends in the country’s economy, caused by both internal and external factors, one should not expect further rapid growth of the industry in the coming years.

Denis Miroshnichenko
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Recently, many forecasts and opinions about the future of the Russian furniture market have been discussed. I offer you my point of view.

Main results 2013/2014

The market volume fell by about 5%, but due to the growth of new companies (both large and small), the revenue of the “old” players fell more strongly. In principle, the market, in my opinion, remains at a high level - 700 billion rubles per year.

Manufacturers are reducing the number of their own stores, but at the same time they are actively encouraging dealers to open their retail formats through franchises. Question: if factories fail to make stores profitable, how will dealers do it? Their margin is 20-40% less than that of the supplier.

Independent retail chains (without their own production) are shrinking or leaving the market because they cannot withstand price competition with manufacturer chains. The trend for online sales is fading, since Yandex has raised advertising prices tenfold over the past 3 years, and the whole idea of ​​“cheap” promotion is gone. Now 99% of online projects are operating at a deep disadvantage.

The market is accustomed to the waves of crisis. Typically, a crisis occurred once every 5 years and lasted a year. The market lost 20-30%, and then over 4 years it more than made up for what was lost. 1998, 2003, 2008, 2013... Many believed that in 2014 the market would begin to grow again. He hasn't grown up.

Furniture market 2015/2016

There will be a drop of 15-20%. Profitability will decrease, since prices for materials will rise along with the exchange rate, and the market will not allow prices for furniture to be raised in the same way. Imports will suffer the most. Players who have been operating at a loss in recent years will be washed out of the market.

The market will quickly consolidate - successful companies will begin to increase their market share even more actively.

Which strategy should manufacturers choose?

Become specialized. Learn to do one thing, but better than all others (better quality, cheaper, faster). The average manufacturer has an average monthly revenue of 50 million rubles, which he makes from hundreds (sometimes thousands) of assortment items. But to receive these 50 million per month, it is enough to produce 150 sofas or 250 cabinets per day. Moreover, THE SAME sofas and cabinets, which you should be able to make better than everyone else! With a smaller area, fewer staff, no defects and at a better price.

Take the helm. To produce several articles (even for 100-200 million rubles), you do not need to hire “stars” from the market. You need to delve into all the details of your production yourself. If this doesn't suit you, look for another business. 99% of business problems are internal, and therefore no one can solve them better than the owner.

Be adequate. The current times are most difficult for those who started in the 90s with a profitability of tens of percent and are nostalgic for those times. But we must acknowledge the reality: this will never happen again. Tens of percent can only be earned from a monopoly, but the furniture industry will never become a monopoly. Therefore, first you need to set yourself a goal - for example, an income of 3 million per month. For such an income, you need to have a revenue of 100 million per month, make 2-3 articles, supervise 100-300 personnel, work with costs daily. And then you won’t be afraid of any crisis.

How has the economic situation affected the development of the furniture industry? What kind of furniture have they started to produce more, what new furniture stores have been opened recently?

The rise in the dollar exchange rate could not but affect the situation in the furniture industry, because the cost of components, both imported and domestic, increased accordingly. The issue of import substitution has become especially acute recently. This is an opportunity to reduce the cost of the finished product and, accordingly, make it competitive.

So, what's happening in the furniture industry lately?
The Federal State Statistics Service published data for the first months of this year, according to which no decline was recorded in the furniture and slab sectors.
Thus, the production of chipboard and other board materials in January-February increased by 8.2% compared to the same period last year, the production of individual pieces of furniture, in particular wooden kitchen cabinets, also increased, the production of wooden beds remained at the same level, only production decreased chairs

It is interesting that the Southern Federal District shows an increase in furniture production - new workshops are being launched, and this applies to the majority of furniture enterprises. And this is at a time when the consumer market is not in the best condition, and some foreign companies are reducing their production or moving their business out of the country altogether. The peculiarity of the region is that there are quite a lot of entrepreneurs here, this is also reflected in the formation of local budgets; in some regions the share of small businesses in the budget is 80%. It is this factor that shapes the stability of the consumer sector in the region.
Previously, small-scale furniture production was more developed in the Southern Federal District, furniture production was focused on the needs of the local market, but now large manufacturers have appeared that produce modern furniture.
One of the most popular industries is the production of upholstered furniture. According to experts, more than 2 thousand private entrepreneurs are engaged in the production of upholstered furniture, and the turnover is clearly greater than that of large companies operating in this industry. Not only the production itself has been developed, but also sales channels. Products are sold both through our own furniture networks and by independent networkers.
In addition, the south of Russia is a promising area for the production of solid wood furniture, thanks to the established raw material base.
As for the production of cabinet furniture, the advantage here is on the side of large manufacturers. In total, more than one and a half thousand enterprises are engaged in the production of cabinet furniture.

Have there been fewer new furniture enterprises that have decided to start operating? Their number has decreased, but, nevertheless, new players in the furniture market are appearing even in these difficult economic times.
Thus, the Swedish IKEA has unfrozen the construction of new hypermarkets and is ready to invest significant funds in them. According to the company's management, within 10 years they plan to invest about 2 billion euros in the construction of new and reconstruction of existing shopping centers. By 2025, the company plans to increase the number of shopping centers to 25. Large cities such as St. Petersburg, Moscow, Krasnoyarsk, Saratov, Voronezh, Tyumen, Chelyabinsk, Perm, Volgograd are of particular interest. The company's management associates the opening of new centers only with the allocation of free space by the authorities. Previously, this was precisely what slowed down investors, but now, according to the company’s management itself, they managed to establish business relations with the authorities. Thus, in Voronezh it is planned to build a new shopping center in the near future; a place has already been allocated for these purposes - 117 hectares of land in the Novousmansky district. They plan to spend 180–200 million euros on the project. According to the plan, a new hypermarket with an area of ​​44 thousand square meters will appear in the city in 2017. m.
Also, the issue of building a store in Krasnoyarsk has practically been resolved; the cooperation agreement was signed a long time ago. Another hypermarket will soon appear in St. Petersburg; IKEA plans to invest about 100 million euros in its construction.

Not only the famous brand IKEA is building new furniture stores, but Moscow may have its own furniture street in the near future. Each capital, which positions itself as a fashion center, has its own furniture streets or neighborhoods. In Paris it is the Marais quarter, in Milan it is Via Durini. There are such streets in Hong Kong, Shanghai, New York and other cities. Until recently there was no such street in Moscow. The City Malls PFM company decided to correct this and introduced a new rental project - “Furniture Quarter”. It is planned to form a specialized furniture zone around the Roomer furniture center.
Roomer retail spaces are popular among furniture retailers. The new project will solve the issue of places for new players and attract buyers. The project involves the creation of a street-retail trading zone, where showrooms of furniture and household goods manufacturers will be located.

The devaluation of the ruble and the Polish company Meble VOX are not preventing the expansion and strengthening of Russian retail. She recently opened a brand store with an area of ​​150 square meters in Moscow. m., not far from the Crocus Expo complex in the Tvoy Dom shopping center.

The Hoff furniture chain also changed its trade policy. Russian retail finds itself in a difficult situation; currency devaluation has also led to a decrease in consumer demand for furniture; increasingly, price plays a decisive role when choosing furniture. In the new realities, the leading player in the furniture retail sector, the Hoff company, has replaced some imported furniture with products from Russian manufacturers. As the company's management notes, the furniture industry in Russia is sufficiently developed and is capable of replacing imported products in the mass sector. But sellers will not completely abandon imports. It’s just that some of the products are moving into a different price segment (in the direction of higher prices), but many players in the furniture market had to abandon products that were already quite expensive. Such furniture turned out to be beyond the capabilities of the target audience. This category includes products from such brands as Machalke, Holtkampf, Huelsta.

According to information: info.ssd.su