https://dailyasianage.com/news/158491/way-forward-for-furniture--industry-of-bangladesh
EDEN BUILDING TO STOCK EXCHANGE 13 January 2019
Way forward for furniture industry of Bangladesh
M S Siddiqui
A study (PKSF, 2013) on Bangladesh, observed that furniture sector has a growth rate of 19% per year and contributes 0.29% in the GDP of the country. This labor intensive sector has the potential to stand as a key contributor to the national economy by employment generation and also to become a prime supplier of foreign currency as in the case of apparel industry. About 2 million skilled and unskilled labor force are employed by this sector. Based on the official statistics of Bangladesh, the total furniture manufacturing value added was BDT 86.4 billion in 2016-17. Its net contribution to GDP therefore is estimated to be about 0.5 percent. The sector's contribution to total manufacturing employment is about 9 percent. Considering both direct and indirect engagement, the total employment in the sector is thought to be in the range 1.52.5 million. The furniture has different segments on the basis of base material such as metal, wood, plastic, glass, and other segment including leather, rubber, and hardware components. Furniture production is made in the sector in a wide range such as panel furniture, solid furniture, sofa, seating group, modular furniture (kitchen, bathroom, office, and bedroom), garden furniture, furniture sections and parts, vehicle furniture, hospital furniture, hotel furniture, accessories oriented to national and international markets, the usage of imported product/materials is limited. The end-use segment is categorized into residential and commercial. Residential segment is further categorized into kitchen and dining, living room and bedroom, outdoor, and others. The others segment includes furniture used in bathroom and lighting such as lamps. The residential segment is anticipated to proliferate over the forecast period owing to growing demand for furniture in living room and bedroom coupled with rise in real estate construction projects initiated by governments especially in urban areas.
The global demand of furniture increases with the growth of population and improvement of living standard of the global population. In 2050, the world population is expected to be 9.6 billion, an increase of 38%, from 6.9 billion in 2010. Geographically, 54% of the world's population lives in urban areas, a proportion that is expected to increase to 66% by 2050 (United Nations, 2013). Zion Market Research report find, the global furniture market was valued at around USD 331.21 billion in 2017 and is expected to reach approximately USD 472.30 billion by 2024, growing at a CAGR of around 5.2% between 2018 and 2024. Another study find the global furniture market size was valued at USD 480.7 billion in 2017 and is expected to grow at a compound annual growth rate (CAGR) of 5.1% from 2018 to 2025. The market is driven by various factors such as rising disposable incomes, growth of real estate and hospitality industries, and demand for luxury and premium furniture from certain consumer sections. The fasted growing Asia Pacific furniture market accounted for over 40.0% of the overall revenue share in 2017. For instance, residential segment in Asia Pacific is anticipated to attain a market size exceeding USD 90.0 billion by 2025. Moreover, rapid urbanization coupled with growth of IT industry is expected to positively impact demand. Europe is projected to expand at a CAGR exceeding 5.0% over the forecast period ascribable to the rising tourism industry driving hospitality sector, which is eventually creating demand for luxury furniture. The top five major furniture exporting countries are China, Germany, Italy, Poland, and Vietnam. China is the leading furniture exporting country since 2005 overtaking Italy. Previously, Italy was a major furniture exporter with Germany. Germany and Italy had been competing against each other in furniture export value since 2009. China has risen rapidly compared to Germany, Italy, Poland, Vietnam, and United States. China is the leading domestic market and also leading exporter of furniture. According to statistics of Chinese National Bureau of Statistics, in 2017, the total sales of furniture manufacturing enterprises grew 10.1% year-on-year to RMB905.6 billion, while total profits grew 9.3% year-on-year to RMB56.52 billion. Apart from domestic sales, China's furniture exports also show sustained growth. According to the 13th Five-Year Plan for the Development of China's Furniture Industry, the value of China's furniture exports increased at an average annual rate of 8.8%, from US$38.9 billion in 2011 to US$54.3 billion in 2015. Furniture exports are expected to show an average annual growth rate of 3%-5% during the 13th Five-Year Plan period (2016-2020). Bangladesh is yet to capture a sizable share in the world export of furniture as the country's export in the year 2014 was equivalent to 0.02% of world export. in recent years, reaching over US$ 63 million in 2017-18 and registering a growth of 20 percent over the previous year. The global market is changing very first with test and choice of consumers. The furniture design of the future will be mass customized and respond quickly to changes in customer demands. This will require the use of technology such as virtual reality where customers will buy the experience of a living space rather than just individual furniture. Customers awareness of the environment in the future may be heightened requiring 100% sustainable material (sustainable wood, cork, flax, or hemp fiberboard) in the furniture. The class furniture manufacturers are using high tech design and manufacturing process to serve the changing test of the buyers. Manufacturers are now adopting advanced of digital technology through ubiquitous internet of thing devices, virtual/physical studios, fully body stimulation and green technology through optimum energy consumption, carbon capture, and storage etc.
Furniture manufacturers may transform themselves into living space designers selling living space experiences and limited to very high end furniture for high end customers only as the general population will be able to buy a furniture design to set to smaller living spaces in the cities. In future, buying single furniture would no longer be relevant in the future. Rather, the consumer will buy the experience of designers. As designed furniture requires function and is driven by an objective, the finished product may be able to bring comfort, and gratification towards consumer. The increase in living cost and environmental factors have resulted in smaller, cheaper and more energy-efficient product. The concern for the environment is affecting furniture design. Environmental problems are mostly caused by people. Furniture designers may play an important role by searching new solutions for furniture design and manufacturing that is eco-friendly. In 2050, sustainability in furniture manufacturing would be strictly implemented. The factory must continuously improve in term of engaging renewable energy resources, minimizing waste, and being eco-friendly. Furniture designs need to be more up to date with technology and environmental element concerns which include impact during production, products' operating life, and its recyclability. The houses in cities are becoming smaller and compact. The designers should shift from designing a single furniture concept to designing furniture that adds to a pleasing experience in using a space. Transformable space saving furniture is an innovative approach to furniture design that has a huge potential market. The design of transformable space saving furniture can vary from traditional beds, tables and chairs. Transformable space saving furniture provides small properties with greater space and multiple functions. Bangladesh is now making some low cost furniture and small player in the global market and in process of original equipment manufacturing (OEM) like garment industry. The next way forward is to shift away from OEM to ODM (original equipment manufacturing) and ultimately to original brand manufacturing (OBM). The home furniture in the 2050 may emerge to be: (a) Excessive multipurpose furniture, (b) Intelligent robotics furniture, (c) Furniture with shape shifting materials, (d) Virtual reality community in designing furniture. Bangladesh should get ready with trained manpower and advanced technology and future oriented deign of furniture in order to take due share in the fasted growing furniture market.
The writer is legal economist. Email: mssiddiqui2035@gmail.com