Furniture: A growth oriented industry
- May 10, 2017
Africa constitutes 16.36% of the total world population and contributes 3% to the world Gross Domestic Product (GDP). Africa is a huge pool of population, which is projected to expand and grow rapidly. By 2050, 2.4 billion more people are expected on the planet out of which 1.3 billion are expected to be born in Africa. The majority of the world’s population growth is expected to take place in Africa. It is said that where there is population, there are enormous opportunities. Business opportunities is one the aspect of this broad spectrum of opportunities. With the growing population in Africa demand for home and office accommodation is simultaneously increasing. When people move into a new home, they need a bed to sleep on, wardrobes for their clothes, chairs, a dining table, sofas, kitchen cabinets and all kinds of furniture. Like households, offices also buy a lot of furniture too. Africa’s rapidly growing urban population and their spending capacity, along with the growing economy are the primary reasons why furniture business is enjoying the best time of its life.
Total furniture imports into Africa amounted to US$ 3.6 billion in the year 2013. Ten main furniture importing African countries (each of them importing over US$ 100 million of furniture in 2013) are Angola, Morocco, Libya, Nigeria, Algeria, Kenya, Egypt, Ghana and Sudan.
Urbanisation process is expected to be very rapid, particularly in Sub Saharan Africa and large urban areas will be the frontiers of economic growth with important implications for the increase of furniture consumption. Despite political instability and relative poor infrastructure level in some areas, there is evidence of numerous urban centres, which offer potential for growth for the furniture market. These cities are increasingly diversifying their economy. In recent years, huge investments have been made in real estate, tourism and hospitality industry, culture and entertainment, which have boosted demand for the furniture sector. More and more number of people are moving to cities from villages, in order to seek better medical facilities, education, sanitation and employment opportunities.
At the current rate of growth, more than 500 million Africans will move to cities by 2030. As the population in African cities and towns increases, this will naturally create a profound and genuine need for real estate; residential accommodation, office space, hotels and schools everywhere in Africa. Office buildings, hospitals, schools, luxury hotels, premium guest houses, residential apartments and societies, shopping malls and theatres are being constructed everywhere in African cities. As this trend of more people moving into new homes and establishing new business offices continues, furniture will be required. When new schools are built, desks and chairs will be needed. New hotels often require skillfully designed beds, stylish wardrobes and various other fixtures and fittings. This is just a short glimpse of a rewarding business stream which is waiting to be explored. Several African countries have good potential for developing their furniture industry, both for internal consumption and for exports. The more promising prospects are in South Africa, Egypt, Morocco and Nigeria, but also Namibia, Tunisia, Kenya, Zimbabwe are possible candidates for a relevant expansion of their furniture production.
The global economy is prophesized to grow by 2 to 3 percent between the years 2011- 2020. Africa is projected to grow approximately by 6%. The reason behind these projections is the rising middle class in the African cities. These people are the dwellers, who migrates from the rural areas and villages to the cities for employment prospects. This class includes salaried job holders, small and medium scale business owners. The expansion of middle class has led to the increased demand in the high-class furniture. The icing on the cake is that this middle class consists of educated people, who have good taste and their own respective choices when it comes to purchasing furniture. Agyei, the owner of a custom made furniture showroom in Accra, Ghana says “People have realized the importance of high-quality furniture. Of course the significance of being an attractive piece of furniture can’t be denied”. The changing taste of Africans in terms of home decors and furniture is a boon for Africa’s furniture industry. Agyei further says “Furniture occupy space of your house, but good and attractive furniture occupy space in your heart. Furniture is something that convert a house into a home”. The growing demand for furniture is currently an asset for the furniture exporters. In the quest to reserve best class furniture for themselves, Africans are providing an edge to the imported furniture. Amadou, the sales manager of a French furniture showroom in Senegal bsays “customers have a keen interest and desire for imported furniture. The sales for the imported custom made furniture has been increasing since the last 3 years”. In order to start up furniture business in Africa, one should know the needs and demands of the customers being targeted. Some buyers are more concerned about beauty, quality and durability of the furniture, and will pay high prices to get furniture that meets these requirements. Some other buyers are highly influenced by cost and their choices are restricted to the price of the furniture. They will love to have beautiful and high quality furniture only if it can fit into their budget. Some customers prefer imported furniture and some prefer the local one. The key to succeed and make money is the ability to fulfill the needs and taste of buyers.Some of the countries like Nigeria, in order to develop the local furniture industry and to create the employment opportunities introduced a ban on the imported furniture. In countries like these, it is advisable to form joint- ventures with the local manufacturers. There are certain advantages which one could get in forming a collaboration with local manufacturers. It will provide you a platter of the information about the latest market trends, taste, opportunities and much more. Not much research and development would be required. Furthermore, setting up a business in a jointventure with local manufacturer would prove to be cost effective as compared to establishing one’s own enterprise. The bottom line is that the projected sure shot increase in the demand for residential and commercial accommodation is the engine to accelerate the growth of furniture industry in Africa. It’s the perfect time to invest in!
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