The Furniture Industry During Covid-19
How did the pandemic affect the world economy?
The world’s economy has seen some radical changes since the outbreak of the Covid-19 pandemic. There was a significant negative impact on many industries and supply chains all over the world. Some industries are suffering from decreased demand or limited workforce caused by lockdowns and changing consumer habits.
The hardest hit sectors include civil aviation, tourism, and the cultural sectors. Manufacturing, agriculture, and transport were also struggling. The furniture industry itself was hit hard at the start of the outbreak and the early waves. The nationwide lockdowns for the prevention and spread of COVID-19 negatively affected the construction industry, which is the biggest revenue generator of the furniture market. The sudden increase in cases, specifically across Asia and Europe, has further resulted in the shutting down of various furniture production facilities for a temporary period, thereby disturbing the demand and supply chain.
The furniture industry is coming out on top. How?
Despite all the obstacles the world economy has gone through, the furniture industry is doing well in 2021. This is due to various countries lifting their respective lockdowns and because of various governments’ efforts to stimulate their respective economies.
Amongst these efforts were the rush to successfully fund vaccine research and roll them out to the public, while developing new health and safety guidelines. According to WHO, about 1.2 billion vaccine doses have been administered, as of the time of writing this article.
Another stimulant governments are using, especially in the MEA region, is the increased spending on large scale construction projects. Regional governments are boosting construction investments that are in turn exploding the MEA furniture market revenues. Large hospitality industry projects are further contributing towards tourism growth across the region, which will yield promising market growth in upcoming years. Countries like South Africa, UAE, and Saudi Arabia are some of the key contributors to the regional furniture market development.
A prime example of an ongoing large scale construction project in North Africa is the New Administrative Capital in Egypt. The New Capital will host the Presidential Palace, Parliament, embassies, government ministries and other public institutions. With a total area of 700 sq km, this area is expected to be supplemented with:
21 residential districts
100 neighborhoods
Airport
40,000 hotel rooms
900 schools
633 healthcare facilities
The development is estimated to require a capital investment of more than USD 40 billion, a big portion of which will undoubtedly be captured by the furniture market. Construction projects like these are huge on a local scale and there is evidence that furniture market growth is amplified from a global perspective. This fact is reiterated by a Global Market Insights furniture market report covering 21 countries, which states that the furniture market was valued at around USD 609.7 billion in 2019 and will exhibit a growth rate of over 5.4% from 2020 to 2026.
There is a huge opportunity to be captured by the furniture market here.
How to leverage the new digital age to capitalize on the new opportunities?
The impact of the COVID-19 crisis on consumer behavior and manufacturing trends has heightened the importance of digitalization and automation for the furniture industry. Online-savvy consumers seeking personalized shopping experiences and competitive prices are pushing furniture manufacturers to innovate on their existing workflows. Furniture executives should take advantage of advances in technology and communication tools to respond faster to the changes in consumer demand, gain cost-saving benefits, and boost their operational efficiency.
Manufacturers are taking aggressive measures to protect themselves against the downturn. Many furniture companies are achieving cost-savings by boosting their operational efficiency. Digital technology is enabling furniture executives to boost production capacity, fulfill last minute orders, and prevent delays in delivery time without increasing labor costs.
For example, to meet consumer demand for faster delivery, furniture companies are shortening their production cycles. Enabled with cloud-based software that connects their IT system with the cutting room, manufacturers can automatically process customer orders and simultaneously generate cutting jobs with all of the necessary information: material, marker, cutting parameters, offloading addresses and cutting line assignment.
Oftentimes the need to provide a furnishing solution as part of construction or a renovation project can become a tedious and daunting task. In a more digitized post-COVID-19 world where, not only quality and delivery speed are crucial, but also environmentally sustainable. Many consumers are shifting their behavior towards healthier lifestyle habits, thoughtful consumption and the betterment of society through self-improvement. For the furniture industry, the expanding market size of eco-friendly furniture, estimated to reach $59.8 billion (USD) by 2027, best exemplifies the rapid progression of these consumer trends.
How do you match a client’s expectations of style, premium quality, at competitive pricing while optimizing your costs?
The best way to do so is to partner with Sinoalex.
With a cumulative experience of 30 years in the furniture market, Sinoalex provides the highest quality raw materials and furniture with the best value on the market.
At Sinoalex, we specialize in tailor made solutions, bringing life to our clients’ ideas through a range of services from renovation and furnishing to refurbishment of interior and exterior spaces. If required, our services extend to connecting our clients to some of the largest Architect & Interior Design firms in the Middle East & Africa. We ensure well executed, timeless and powerful designs that influence perception, interaction, work & user experience.
