The emergence of more and more high-rise buildings and apartments with small area making it difficult for using large furniture will be one of the factors driving the Ready-to-assemble (RTA) or “knock-down” furniture market to grow more in the near future.
RTA furniture helps to optimize small housing spaces. The growing consumer demand for this product has led many companies to transform their business models. Among them, Hem, an e-commerce giant, offers flat-packed furniture with beautiful, Scandinavian designs.
The choice of over 83% of Millennials
In October 2018, Nitori Company, in collaboration with Välinge Innovation AB, produced a new range of RTAfurniture with click furniture technology (N-Click). This N-Click product cuts down on nuts and bolts when assembling furniture because parts are easily connected by snapping together. N-Click was immediately well received by the product's high customizability.
Right after N-Click, Tylko, an online retailer, also launches RTA furniture. Items such as shelves, bookcases, wardrobes, shoe racks, TV stands, chest of drawers and wall-mounted storage cabinets... sold on Tylko are popular with users. It meets the storage space requirements, brings a spacious feeling to the house, and is very convenient to disassemble and customize according to the customer's interior space.
Not stopping there, the fact that manufacturers in the industry are investing extensively in improving technology to reduce production costs, so the price of RTA furniture is quite suitable for mid-range customers. RTA furniture is less expensive because it is manufactured in parts only, so the costs incurred to assemble the product are minimized.
Furthermore, the flat packing facilitates saving transportation space, helping manufacturers save costs significantly, and at the same time can reach more users, expanding the online channel coverage in the furniture market. According to statistics in the US, 83% of Millennials have purchased different products in the RTA furniture segment. Demand for RTA furniture is largely driven by the younger consumer segment due to a shift in preference towards space-saving furniture.
The advantage of wood in RTA furniture
Wood is the market's leading material in producing RTA furniture and holds a 54.9% market share. This material has become a staple in the home furniture segment thanks to its long durability and good shape. RTA furniture products are manufactured using different wood materials such as artificial wood, sheesham wood, solid wood, bringing high aesthetics to the product.
The home furniture segment accounts for 66.7% of the global RTA furniture market share. In recent years, the price of conventional furniture has increased, helping to expand the market segment of low-cost RTA furniture. However, according to industry experts, ease of transportation is one of the key factors driving sales of RTA furniture.
RTA furniture is so well received that manufacturers have to strive to foster innovation to accommodate even the affluent consumer segment. The fact that Moooi B.V. introduced a range of high-end RTA furniture for the upper-class is an example.
Besides home furniture, the office application segment is expected to expand at a Compounded Annual Growth rate - CAGR of 5.7% from 2019 to 2025. The increase in the number of startups in developingcountries like China, India and Vietnam have affected the RTA furniture market, as they will have less investment costs. In addition, easier in transportation also boosts the importance of RTA furniture in the office application segment.
The big brands
The global market is highly competitive in nature. Top players operating in the market include IKEA Systems B.V., Dorel Industries, Ashley Home Stores, Steinhoff International, Tvilum A/S, Simplicity Sofas, Home Reserve, Sauder Woodworking, Fabritec (EUROSTYLE), and Bush Industries... are focusing on expanding their product portfolio in order to meet consumer demand for RTA furniture products.
Europe dominates the global RTA furniture market, accounting for 34.8% of the market share in 2018. The preference for portable and flexible furniture in countries such as France, UK and Germany is leading thecontinent's market. Europeans prefer assembled kitchen furniture. The shift to corner kitchens to make more efficient use of space is a major driver of the market in this area.
The RTA furniture market in Asia-Pacific is expected to expand at the fastest CAGR, up 6.9% from 2019 to 2025. Two-person household growth trend in Asian countries such as China, Japan and Indonesia has urged consumers to invest in RTA furniture. Besides, the developing real estate sector in countries such as China and India also increases the need for remodeling and adding style to homes.
Source: Go & Noi That, GrandViewResearch