Snapshot of UAE Online Furniture Market
The sale of furniture products online is a relatively new concept in the UAE region owing to its small scale operations where the customers prefer to buy products by visiting the stores and facilitating transactions. Despite having an internet penetration of ~% in the region with an approximate of 8,515,420 internet users, online sales of furniture contributed to mere ~% of the market revenues which were evaluated at AED ~ million for the year of 2017. Online players have been facing stiff competition from brick and mortar stores all across the country, which offer a wide variety of products at competitive prices.
Snapshot of UAE Home Furnishings Market
Furnishings products are more or less complimentary goods that are demanded along with furniture. Lately furnishings market has been growing along with the furniture market. The UAE Furnishings Market recorded a growth at a CAGR of ~% from 2012 to 2017. The demand for barbeques and garden sheds saw an increase due to the rise in barbeque restaurants and the ability of charcoal barbeques to produce flavorful and better results than gas barbeques. IKEA has been the most popular brand amongst the expatriate for the procurement of furnishing items while the local population on the other hand preferred traditional style of furnishings.
How is the Competition Scenario in UAE Home Furniture Market?
The furniture market of UAE was observed to be mildly fragmented due to presence of large number of domestic and global players with similar product offerings. Single proprietorships and family-owned corporations are common in the industry. Some of the major furniture brands are owned by the expat population, along with foreign investors. Furniture products of various price segments, inclusive of cheap, mid-segment and luxurious/premium products are designed by several manufacturers to cater to the needs of the ever expanding customer base of all classes. Over the years the competition between the domestic and international players has intensified owing to the increase in demand for furniture and furnishing products in the UAE region. It has been observed that manufacturers and retailers are trying to differentiate themselves by targeting a particular customer segment based on purchasing power of customers.
The unorganized sector has been posing stiff competition to the existing and new organized players entering the space owing to the ease in availability of raw materials and cheap skilled labor in the region. However, organized players have been successful in marketing modern furniture products largely to the emirates of Abu Dhabi and Dubai.
What is the Future Outlook for Furniture Industry in UAE?
The furniture industry of UAE is expected to grow from AED ~ million in 2017 to AED ~ million by 2020E with a CAGR of ~% for the same time period. The reason for the increase in revenues from the furniture industry of UAE can be attributed to the fact that increasing nuclear families being welcomed in the region, as more people adapt to nuclear families, the requirement of residential spaces would also increase which would lead to an increase in the demand for furniture products in the region. The furniture demand in the region will rise also because of new fashion trends in furniture. This will also lead to higher replacement of furniture products thereby increasing the demand for furniture and furnishing products. The development of key projects like Caesars Palace, Fairmont and others will lead to the development of the tourism industry; this in turn will foster the growth of furniture industry.
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