Office furniture is not only about desks and chairs, but it is about setting the right environment in the workplace. Employees spend the majority of the time of their desks regardless of their hierarchy in any office place.
Therefore, the furniture has to be both comfortable and trendy so that it can uplift the mood of the people. In any case, the good health of the employees also largely relies on the furniture they use.
The height of the desk and ergonomics of chairs affect their sitting position and ultimately their spine health and body posture. Many types of research have been conducted that suggest the right sitting posture and chair ergonomics. In addition, other aspects of office furniture such as dining area furniture and common are furniture have their own importance as these usually create a pleasant ambiance.
A Detailed Guide on Opportunities in the Office Furniture Market
Nonetheless, emerging startups and developing industries across the globe have pushed the demand for office furniture and this has become a global industry in itself.
The global office furniture market is huge and it is also growing pace in both the developing and developed regions across the globe. The office furniture market comprises of 15 percent global market share in the global furniture market.
The majority of office furniture comprises of the elements such as seating, panels, and storage. Talking about the market maturity, the U.S., UK, Singapore, Hong Kong, Germany, Italy, Japan, and Switzerland are considered highly mature regions whereas emerging APAC regions such as Vietnam, Philippines, Malaysia, and India are expected to drive the demand in the near future.
APAC region is on the path of rapid urbanization which has triggered high growth rates in many countries and therefore, the region is likely to drive the demand in the next 5-10 years.
Opportunities in the Global Office Furniture Market:
The global office furniture market is quite dynamic and it follows practices and trends that are different from traditional market dynamics. However, this is still not a business that requires huge capital investments and new entrepreneurs can start a business of their own.
The choice of the domain such as manufacturing or supplying depends on their expertise and knowledge of the market. Here, entrepreneurs have to be mindful of the market dynamics that comprises of numerous factors such as market outlook, supply trends, contract trends, and industry best practices. Entrepreneurs cannot ensure their success in the global market without a thorough understanding of these factors.
- The Key Performance Indicators (KPIs) in the global office furniture market are product service lifetime, maintenance lead time, and service turnaround time. On the other hand, impactful cost components are raw materials, labor, and wages. These 3 factors constitute approximately 70 percent of the total costs. The general contract period in the industry is of 1 year which follows different pricing methods such as Volume-based pricing and Value-based pricing.
- The top global suppliers in the industry are Knoll, STEELCASE, Herman Miller, HNI Corporation, HAWORTH, and Bene. These players form approximately 11 percent of the APAC market whereas the market in the region is quite unorganized in fragmented pockets. Mergers and Acquisitions (M&A) is also a current trend in the industry as the local level distributors and manufacturers are merging with global organizations which also create a huge network of multiple channels.
- Talking about the industry practices and buying and supplying, buyers usually have more leverage due to higher competition in the market and this regardless of the size of the contract. Even for the small contracts of approximately $10,000, buyers have more leverage. The major negotiation factors in a contract are volume buying, buyer leverage, and lead-time flexibility. Due to increasing urbanization and industrialization on a global level, the industry is also witnessing a few emerging engagement strategies such as buyers preferring Original Equipment Manufacturers (OEM) and dealers of global suppliers.
- Entrepreneurs also have to understand that the office furniture industry is a labor-intensive industry and technological innovations are all set for disrupting the industry in a positive way. Automation and mechanized production methods are being opted for increasing efficiency and reducing costs.
- Another important factor that cannot be ignored is environment protection regulations. Increasing environmental concerns have pushed the governments across the globe to implement regulation for recycling, reuse, and waste management. This has become a raging trend in developed markets such as the U.S. and UK whereas similar regulations are being opted in the developing regions such as APAC.
The global office furniture market is growing with a pretty steady pace and the credit goes to increasing urbanization and industrialization.
The rising number of startups and mergers are also driving growth in the industry. Entrepreneurs can capitalize on this opportunity and start a business in the industry.
However, they need to be well-aware of certain dynamics such as market outlook and regulatory compliances as analyzing more and more information is the only way to achieve success.