Driven by pent-up and delayed demand, India’s online furniture and domestic market is expected to reach $40 billion over the next five years, according to a new report released on Monday.
Over the next five years, online furniture and home sales are expected to grow at a CAGR of 39%. The online home category includes home decor, furnishings, mattresses, and lighting.
The online furniture category forecasts 3X growth in the number of buyers over the next five years with a 1.8X increase in annual spend per buyer. This will enable 5X GMV (gross merchandise value) growth for the category in FY21-26, according to data provided by Bengaluru-based market research firm RedSeer.
The online furniture category is experiencing strong growth with more and more buyers trusting high priced online furniture shopping.
“Similarly, the online home category is expected to experience 2.5x growth in buyers over the next 5 years, with a 1.3x jump in annual spending per buyer to indicate growth of 4 X GMV,” predicts the report.
In the furniture category, verticals have carved out a place for themselves.
Vertical products dominate the high-end “solid wood” market while horizontal products dominate the “plastic/metal and engineered wood” market.
“The average selling price (ASP) on verticals is 10 times higher for furniture and 2 times higher for decoration than horizontals, indicating the difference in target customers,” the report states.
He added that vertical markets focus on an experience-conscious set of customers, seek choice and product quality over price, and willingness to pay and for online channels is high.
“Verticals with superior omnichannel presence, customer experience, product innovation, specialized supply chain and technology capabilities are well positioned to scale,” the results showed.