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ETHOPIA CAN SET UP FURTHER TEXTILE FACTORIES Photo: Pixabay
15.05.2018

ETHOPIA CAN SET UP FURTHER TEXTILE FACTORIES

  • Sudanese and Chinese investors want to secure raw material supplies

Nairobi (GTAI) - Ethiopia has further successes in attracting textile companies: One British company is planning to invest USD 100 million, one Chinese company even plans to invest USD 220 million. This means that the textile sector is increasingly becoming a self-starter, as donors increasingly want to supply domestic industry with pre-products. Meanwhile, those who invest should not only raise the financial means, but also the raw material cotton, according to market experts.

  • Sudanese and Chinese investors want to secure raw material supplies

Nairobi (GTAI) - Ethiopia has further successes in attracting textile companies: One British company is planning to invest USD 100 million, one Chinese company even plans to invest USD 220 million. This means that the textile sector is increasingly becoming a self-starter, as donors increasingly want to supply domestic industry with pre-products. Meanwhile, those who invest should not only raise the financial means, but also the raw material cotton, according to market experts.

The Ethiopian textile and clothing market has two new entrants: the British Intrade Co. UK Ltd. and the Chinese Wuxi No. 1 Cotton Investment Co. Ltd, Intrade intends to build a textile and clothing factory in the Mekelle Industrial Park (Tigray Regional State), which was opened in July 2017. Initial cost estimates are around USD 100 million. Intrade is an offshore company of the Sudanese Mahgoub-Sons Group. The company has reached an agreement with the Ethiopian Investment Commission to invest USD 200 million in three projects. The textile project is to be completed in 16 months.

Security of supply for cotton is becoming an issue
The Sudanese group is not only interested in textile production, but also with lucrative supply transactions for its own cotton. They have the capacity to supply 500,000 tons of long staple quality cotton annually, Wagdi Mirghani Mahgoub, Managing Director of Intrade says. The supply of raw cotton has become an increasing problem for the emerging Ethiopian textile industry since some Asian countries ordered export stops for the raw material, including the PR China and India. The African Plantation, which cultivates 33,000 hectares of agricultural land in Sudan, also belongs to the Mahgoub-Sons Group.

However, Wuxi No. 1 Cotton Investment has announced the second and larger textile investment of 2018: a textile factory will be opened shortly in the Dire Dawa Industrial Park. In a first phase, USD 80 million are planned, followed by further investments totaling USD 140 million. The company intends to install state-of-the-art textile machines to produce and supply goods for the demanding markets in Europe, Japan, South Korea and Southeast Asia. According to their own statements, partners are leading world machinery brands. Wuxi is already pursuing a project in the Ethiopian city of Adama and also has plans to grow cotton in Ethiopia.

Ethiopia is considered the first textile address in Africa
"Clothing companies are nomads," an industry consultant knows, "they go where it is cheapest for them. If wages and ancillary costs rise too much in countries like Bangladesh or the PR China, the caravan moves on." South of the Sahara, only Mauritius has made a name for itself as a producer of high-quality clothing. Attempts to establish larger-scale textile and clothing companies in Namibia and Lesotho have so far been unsuccessful. Meanwhile, Kenya and Ghana have production conditions that are far too expensive.

Ethiopia offers several advantages at the same time: Wages and ancillary costs are extremely low and far below those in China. The US Centre for Global Development found out that a worker in Ethiopian sweatshops earns an average of USD 909 a year. In Bangladesh, however, it is US$ 835 and in Tanzania and Kenya even US$ 1,776 and US$ 2,118 respectively. Another advantage: Ethiopian seamstresses are considered to be extremely hardworking and reliable. In addition, there is a tradition in textile and clothing production as well as in leather processing and thus there is a basic pool of trained specialists.

Infrastructure is making huge progress
Meanwhile, the supply of domestic cotton and leather needs to be expanded, because in the drought years 2016 and partly 2017 the supply of cotton was insufficient. The government is cooperating and is increasingly listening to the needs of producers. The infrastructure is currently undergoing sustained improvement, in particular the transport routes to the neighboring seaport of Djibouti, from where Europe can be reached more quickly than from the Far East. And, last but not least, the Ethiopian capital Addis Ababa has a capable air traffic hub with a dozen direct flights to the EU, including Frankfurt and Vienna. In addition, there is a modern air freight center.

Just as important as the delivery routes are the comparatively modern production conditions in the newly emerging industrial centers throughout the country. Everything here is "Made in China": fences, access controls, roads, electricity and water supply, waste and sewage disposal, workers' settlements. From a European perspective, this may look like Chinese dominance, but from an Ethiopian perspective it creates jobs, feeds families and earns foreign exchange. Under better working conditions than in Bangladesh, experts mean.

According to the ideas of the Ethiopian government, the country is undergoing a transformation process: away from an agrarian-based economy and towards an industrial state. By 2025, the country is expected to reach middle-income status and to become Africa's largest industrial production hub. To achieve this, Ethiopia is investing heavily in roads, railways and power generation, health and education, urban and rural development and the creation of industrial clusters.

Customs advantages in the USA and Europe
Ethiopia has so far benefited from the African Growth and Opportunity Act (AGOA) of the USA, which, for example, allows savings of 16.8 percent in import duties on cotton trousers and 30 percent on synthetic shirts. Ethiopia also has duty-free access to the EU market under the Everything but Arms initiative. Fears that US President Donald Trump might stop AGOA have not yet come true.

Ethiopian exports of textiles, clothing and leather products
(including footwear; in US$ millions)

SITC-Commodity Group
 2014 2015 2016
61 Leather and leather goods    97.51    98.20
78.63  
65 Yarn, fabrics, finished textile products and related articles  39.34  39.12 29.61
84 Clothing and apparel accessories  55.53  77.94  68.25
85 Shoes         
 33.88
 37.69  43.80
Total 226,26 252,95  220,2

Source: Comtrade

German exports can be expanded
German sales representatives of technology for the textile, clothing and leather industry are not yet well positioned in Ethiopia. According to preliminary figures from the Federal Statistical Office (SITC 724), only EUR 2.84 million of relevant technology where sent to Ethiopia in 2017, though 169 percent more than in the previous year.

Ethiopian imports of machinery, equipment and parts for the textile and leather industries
(SITC 724; in USD millions)

Supplying Country 2014    2015 2016
Total 131.30 170.51 111.10
.. PR China  43.87  42.40 62.07
..Italy 6.38 11.75 11.72
..Japan 4.40 10.11 6.89
..Turkey   4.86 19.14 4.92
..Other Asian countries, not specified 1.85 1.87 4.11
..India  6.07 6.49 3.06
..Germany 9.22 9.08 2.44

Source: Comtrade

 

Source:

Martin Böll, Nairobi (GTAI)

Foto: Pixabay
08.05.2018

IN INDONESIA DEMAND FOR TEXTILE MACHINERY STAGNATING

  • Clothing exports stagnate
  • Shoe production becomes more important
  • Investment in modern technology necessary

Bonn (GTAI) - The Indonesian textile industry faces strong regional competition. Since their demand for machinery and clothing exports peaked about five years ago, the industry's exports have stagnated. Nevertheless, the archipelago is important for international market participants at least as a second location alongside the major producing countries. In the meantime, the country has developed into an important shoe manufacturer and is further expanding its production capacities.

  • Clothing exports stagnate
  • Shoe production becomes more important
  • Investment in modern technology necessary

Bonn (GTAI) - The Indonesian textile industry faces strong regional competition. Since their demand for machinery and clothing exports peaked about five years ago, the industry's exports have stagnated. Nevertheless, the archipelago is important for international market participants at least as a second location alongside the major producing countries. In the meantime, the country has developed into an important shoe manufacturer and is further expanding its production capacities.

Indonesia is one of the top 15 clothing exporters. Over the past decades, the archipelago has continuously increased its production and thus created a growing demand for textile machinery. But the market has been stagnating for five years: exports are at around USD 7.5 billion per year, and imports of textile machinery have fallen from USD 1 billion per year to only around 800 million US dollars.

The most important supplier of textile machinery is the PR China, which has expanded its import share to around 30 percent in recent years and displaced Japan from first place. According to Indonesian import statistics, the German delivery ratio fluctuates by 10 percent.

The Indonesian textile association API cites the lower demand for clothing, especially from the USA and Europe, as the reason for the weak export development. About half of industry exports goes to North America. The largest customers are Japan, Germany, South Korea and the United Kingdom. What the association does not say: Bangladesh, Vietnam, India, Cambodia and Myanmar have all significantly increased their clothing exports in the past five years.

Indonesia's import of textile machinery *) (in USD million)
2007 360.5
2008 580.9
2009 339.9
2010 641.1
2011 952.1
2012 1.021.7
2013 973.8
2014 940.2
2015 804.3
2016 822.9

*) SITC 724
Source: UN Comtrade

Shorter production cycles
Indonesia's textile companies must therefore invest in order to remain competitive. Even though, according to API, more than half of the member companies are already technologically advanced, many market participants still have an outdated machinery. And especially against the background of fiercer competitive conditions, this is a decisive disadvantage. According to the association, larger fashion chains insist on ever shorter delivery times. Where the producers used to have three months, today it is only three weeks.

Regional competition is also a problem for manufacturers. The archipelago has good conditions for a labor-intensive industry such as the textile industry. Wages are low - outside the conurbations - and the labor supply is inexhaustible (also because many men work as sewers in the factories). Nevertheless, the country has not yet managed to become serious competition for the main export countries of cheap mass-produced goods.

Indonesia's import of textile machinery by supplier countries *) (in USD million; Change in % compared to previous year)
  2014 2015 2016 Change
PR China 279.4 269.2 524.7 -5.4
Taiwan 79.7 86.8 98.3 13.2
Germany 104.5 68.4 93.6 36.8
Japan 163.7 91.3 85.1 -6.8
Korean Rep. 60.5 65.8 57.0 -13.4
India 48.3 43.1 42.6 -1.2
Singapur 37.1 33.4 41.3 23.7
Italy 47.1 39.1 36.3 -7.2

*) SITC 724
Source: UN Comtrade

The archipelago also has locational disadvantages: it is further away from the European sales markets than other manufacturing countries and has a greater distance to China also, which, due to the high wage increases, is increasingly relocating its clothing production to its immediate neighbors. Moreover, in Indonesia, which is comparatively wealthy due to its large raw material exports, the minimum wages of India, Cambodia, Bangladesh or Myanmar cannot be undercut.

Asia's top clothing exporters 1) (USD billion;
change 2016 compared to 2011 in %)
  2011 2016 Change
PR China 153.7 158.2 2.9
Bangladesh 19.2 29.5** 53.6
Vietnam 13.1 22.9** 74.8
India 14.7 17.9 21.8
Indonesia 8.0 7.5 -7.1
Cambodia 4.0 6.6** 65.0

1) SITC 84; 2) Mirror statistics of partner countries
Source: UN Comtrade

Investments at previous year's level
After all, Indonesia has managed to become an important second location for international apparel companies, mitigating risks in major manufacturing countries. Most of the manufacturers are located in populous Java. For the government, further expansion of the industry is important in order to bring the large number of unskilled workers to work.

According to the latest available data from the Federal Statistical Office (BPS), the number of employees in the roughly 2,600 medium and large companies in the sector has increased from 470,000 (2008) to 550,000 (2014). In addition, there are just under 210,000 workers in small and micro companies (2015), most of whom are one- or two-person businesses.

The BKPM investment agency reports FDI of USD 184 million for the first half of 2017 for 494 projects. This corresponds almost exactly to the sum of the same period of the previous year. For the full year of 2016, USD 321 million of FDI had flowed into the sector.

Shoe manufacturers expand capacities
The domestic footwear industry is developing far more dynamically than the textile industry. Indonesia has become the third most important exporter in terms of cheap mass production in a few years, but it is far behind China and Vietnam. After all, the corresponding exports between 2011 and 2016 have steadily increased from USD 3.3 billion to USD 4.6 billion.

Asia's most important footwear exporters 1 (in USD bn, change 2016 compared to 2015 in %)
  2011 2016 Change
PR China 41.7 47.2 13.1
Vietnam 6.7 13.0** 93.5
Indonesia 3.3 4.6 40.5
India 2.1 2.7 31.4

1) SITC 82; 2) General Statistics Office of Vietnam
Source: UN Comtrade

And the signs are still on expansion: In the first six months of 2017, the leather and footwear sector had FDI of USD 187 million, a third more than in the total year 2016. Domestic market participants are also expanding. The Indonesian manufacturer SCI is currently building a new production facility in the central Javanese Salatiga, near the port city of Semarang. It should be completed in October. In the first phase 300,000 to 500,000 pairs of shoes per year could be produced, the maximum capacity is 1 million pairs.
 

Source:

Frank Malerius, Germany Trade & Invest www.gtai.de

THE POLISH FURNITURE INDUSTRY CONTINUES TO INVEST Photo: Pixabay
01.05.2018

THE POLISH FURNITURE INDUSTRY CONTINUES TO INVEST

  • Exports increase
  • Domestic demand rises

Poland strengthens its position as a major furniture producer. Many companies are expanding their capacities. The industry structure is very fragmented. Among the small to large companies, a certain consolidation trend is noticeable. There are also numerous micro-companies on the market. Furniture exports are expected to increase again in 2018, and the demand for housing, office and shop fittings is also growing in the country itself.

  • Exports increase
  • Domestic demand rises

Poland strengthens its position as a major furniture producer. Many companies are expanding their capacities. The industry structure is very fragmented. Among the small to large companies, a certain consolidation trend is noticeable. There are also numerous micro-companies on the market. Furniture exports are expected to increase again in 2018, and the demand for housing, office and shop fittings is also growing in the country itself.

Poland is an important producer of furniture that is heavily exported, especially to Germany. The producers are expanding their capacities: For example, at the end of October 2017 the Austrian company Egger started construction of a large chipboard factory in the south of Biskupiec (Bischofsburg), which is scheduled to start operations in the fourth quarter of 2018. It is being built on 85 hectares of land within the Warmia-Masuria Special Economic Zone (SEZ) and is expected to produce around 650,000 cubic meters of slabs annually.

The value of this investment amounts to almost EUR 240 million. The products are intended for both domestic and foreign customers. They should meet strict environmental standards and be up to 30 percent of recycled wood. 400 new jobs will be created in the new factory itself and another 600 will be created in cooperating companies.

An important buyer of chipboard will be the furniture industry, which also invests by itself. According to the daily Rzeczpospolita, the company Meble Wojcik plans to build a production facility as well as a warehouse and logistics warehouse for a total of EUR 12 million. These are to be equipped with automated production lines and logistic equipment. In addition, the further development of the IT system is planned so that the production can be adapted very fast to individual customer requirements. The investment project will create at least 120 jobs. The sales of Meble Wojcik in 2017 amounted to more than EUR 100 million.

New sawmill planned
A project of comparable value is being undertaken by the manufacturer of upholstery furniture DFM, which wants to produce wood frame elements in Dobre Miasto (Guttstadt). A modern sawmill is being built there, the construction elements of which are not only intended for DFM itself, but for other customers also.

The furniture manufacturer Szynaka Meble wants to raise more than EUR 5.3 million to build a new warehouse in Ilawa (German Eylau). There 30 employees will be employed. Among other things, the procurement of a modern software for material management is planned.

The six plants of Szynaka Meble produced furniture worth around EUR 235 million in 2017 (on a zloty basis) +5 percent compared to 2016. For 2018 the company expects a growth of 15 percent, mainly due to increased exports to North America, where it intends to sell one-fifth of its production.

Location of the Meble Wojcik, DFM and Szynaka Meble projects is also the Warmia-Masuria SEZ, located in a wood rich area. According to press reports, the manufacturer of shop fittings Modern-Expo plans to build a factory in Lublin. In the first three quarters of 2017, the Polish furniture industry invested a total of around EUR 200 million, according to the main office of CIS. On a zloty basis, the amount stagnated compared to the same period of the previous year.

The sector structure is fragmented
The furniture industry plays an important role in the Polish industry. Around 25,800 companies in Poland are involved in the manufacture of furniture and interiors. Nevertheless, elements and components are also imported, including from Germany. More than 90 percent of the companies are micro-companies, which, according to the market research firm B + R Studio, together however account for 10 percent of the domestic sales only. Only about 90 companies are classified as being large. Together with the approximately 320 medium-sized companies, they sell about three quarters (76 percent) of the relevant products. Small businesses account for a part of 14%. According to CIS at the end of 2017 there were around 161,000 employees in the furniture industry, around 6,000 more than the year before - (+4 percent).

Turnover of Polish furniture manufacturers (in EUR billion)
2013 2014 2015 2016 2017 1)  2018 2)
7.5 8.4 9.3 10.0 10.5 11.1

1) Estimation; 2) Forecast

Source: B+R Studio

For 2018 B + R Studio expect total domestic sales of more than EUR 11 billion, which represents a 3.1% increase on Zloty basis compared to 2017. For years the market leader has been the Polish subsidiary of the Swedish Ikea Group, with revenues of around EUR 1 billion in 2016. Far off is the domestic group Black Red White, which raised a total of EUR 335 million in 2016. It estimates its turnover in 2017 at around EUR 400 million (on Zloty basis +16 percent); the export share is 35 percent.

The company Nowy Styl, which specializes in office furniture and chairs, comes third, with revenues estimated at EUR 340 million in 2017 (+8 percent compared to 2016). The mattress manufacturer Correct follows with a turnover of EUR 291 million in 2016, ahead of the stock exchange listed company Fabryka Mebli Forte with EUR 252 million, which aims to reach EUR 400 million revenues for 2020. Forte will take its 5th factory in operation in late 2019 / early 2020, increasing its production capacity to 6.5 million pieces of furniture annually.

Of importance is also the manufacturer of upholstery furniture Com.40 Limited. Seating is by far the most important category of furniture produced in Poland, accounting for almost half of the total sales.

Exports revive
According to the B + Studios the furniture exports are expected to rise to EUR 10.6 billion in 2018. On a zloty basis this means an increase of about 2 percent compared to 2017 with an estimated EUR 10.1 billion, when the exports fell by 1 percent. Domestic demand for furniture is also increasing thanks to residential and commercial property construction. The increasing purchasing power of the population also makes it possible to replace old facilities with new ones. Imports complement the offer of domestic industry.

Furniture sales in Poland (in EUR billion)
2013 2014 2015 2016 2017 1) 2018 2)
1.2 1.2 1.3 1.3 1.4 1.5

1) Estimation; 2) Forecast

Source: B+R Studio

The industry is suffering from an increasing labor shortage, which leads to higher wages. According to CIS, the average gross wages in 2017 were EUR 833 per month compared to EUR 738 in 2016. On Zloty basis, this corresponds to a nominal growth of 7.3 per cent.

Contact addresses:

Ogolnopolska Izba Gospodarcza Producentow Mebli (OIGPM)
(Polish Chamber of Commerce of Furniture Producers)
Contact: Michal Strzelecki
Al. Stanow Zjednoczonych 51, pok. 614
04-028 Warszawa, Polen
T +48 (0)22 517 78 39
oigpm@oigpm.org.pl
http://www.oigpm.org.pl

B+R Studio Analizy Rynku Meblarskiego
Market research institute for the furniture market:
Head of the Analysis Department: Martin Czyrnia
MD Connect Sp.z o.o.
ul. Oleska 35
46-380 Dobrodzien, Polen
T +48/507 96 66 23
brstudio@brstudio.eu
http://brstudio.eu

Furniture producers     Internet addresses
Egger      http://www.egger.com
Meble Wojcik http://www.meblewojcik.com.pl
DFM http://www.dfm.com.pl
Szynaka Meble http://www.szynaka.pl


 
  

More information:
Poland Furniture market
Source:

Beatrice Repetzki, Germany Trade & Invest www.gtai.de

Furniture market in France Photo: Pixabay
24.04.2018

FURNITURE MARKET IN FRANCE IS GROWING VIGOROUSLY

  • Sales of Kitchens and Beds is outperforming
  • E-commerce puts pressure on the Sector

Paris (GTAI) - Furniture sales in France rose sharply in 2017 for the third year in a row, although the record level of 2011 has not yet been reached. This is reported by the association FNAEM in its annual balance sheet and refers to the close connection with the booming housing market. This also should push the furniture sector in 2018.

  • Sales of Kitchens and Beds is outperforming
  • E-commerce puts pressure on the Sector

Paris (GTAI) - Furniture sales in France rose sharply in 2017 for the third year in a row, although the record level of 2011 has not yet been reached. This is reported by the association FNAEM in its annual balance sheet and refers to the close connection with the booming housing market. This also should push the furniture sector in 2018.

After growth rates of 2.4 and 2.3 percent in 2015 and 2016 the French furniture market has again achieved a stable growth of 2 percent in 2017. According to the FNAEM Federation (Federation française du negoce de la ameublement et de equipement de la maison), the market developments are closely linked to the housing and real estate markets. According to the association, every third furniture purchase was made by a household that has moved within the last 24 months.
 
In 2017 16 percent more homes were built in France compared to the previous year. By the end of October 2017, the real estate market also had also registered 16 percent more transactions. The FFB (Federation française du batiment) expects a strong total construction activity again but with a slight decline of 2.5 per cent in the construction of new housing in 2018.

The development of the overall economy and the political environment also have a strong influence on the furniture market. For example, the presidential elections and the change of government in France led to an initial uncertainty among consumers and delays in the awarding of public contracts. Sales of furniture initially developed weakly in the first half of 2017, but then all the more dynamically.

Furniture market in France 2017
  Sales 2017 (in Euro billion) Change  2017/16 (in %) Share (in %)
Kitchen furniture 2.57 4.0 26.3
Upholstered furniture (sofas, armchairs and benches) 2.42 2.3 24.8
Beds 1.34 3.0 13.8
Bathroom furniture 0.24 -1.6 2.5
Garden furniture 0.13 2.0 1.4
Other home furniture (tables, chairs, chests, drawers) 3.06 0.1 31.2
Total 9.76 2.0 100.0

Source: IPEA (Institut de prospective et d'etudes de l'ameublement)

Most strongly grew the kitchens segment in 2017, whereas in recent years in particular bedroom furniture led the sales. Kitchens are particularly benefiting from the improving housing market and a continuing trend in French households to pay more attention to kitchen equipment.

Fitted kitchens gain market share
According to an analysis by the market research company IPEA (Institut de prospective et d'étes de l'ameublement), only 60 percent of households in France have fitted kitchens, much less than in other Western European countries (Germany: around 80 percent). This difference promises good growth rates for this segment for years to come.
According to the market researchers, the gap between the well-running segment of sofas and armchairs over benches is increasing in favor of upholstered furniture. Above all, folding sofas, which are always offered cheaper, continue to make competition to banks.

Other home furniture such as tables, chairs or chests, which continue to make the majority of the market, were, according to the FNAEM association, unable to make up much ground in retailing compared to kitchens and beds in 2017. Also, in 2018, according to the association's expectations, there will be no signs of recovery. According to FNAEM at most the online trade should continue to grow in the home furniture segment.
The sales of garden furniture benefited from warm weather periods in spring 207, which extended the sales season. According to IPEA bathroom furniture could not fully benefit from the upturn in the housing market in 2017. The business often depends on the hardware stores, which often promote low-cost products. Installers would have sold less bathroom furniture in favor of heating systems.
 
Good sales forecasts for beds
The bedroom segment, the leader in growth in recent years, has developed less strongly in 2017. IPEA attributes this to a tougher competition with more price promotions. Lower prices had slowed the sales despite good volumes. The buyers continue to ask for larger beds sizes with a width of 160 cm.

According to a study by the market research firm Xerfi, the bedding segment is expected to grow steadily by 3.3 percent per year until 2019, supported by the housing market and higher disposable income. French consumers would also exchange their mattresses now more often. According to the trade Frenchmen buy a new mattress every 14 year, whereas this happens in the US every eight years. The association of the mattress industry calls 13,5 for Germany.

Retailers operate multichannel strategy
However, the competition in the bed and mattress market is growing, above all due to the success of e-commerce. Online mattress suppliers such as Casper from the USA (with production in Germany), Tediber and Ilobed from France or Simba and Eve Sleep from the UK have launched massive advertising campaigns in France. According to estimations of the providers, they now have reached a market share of about 5 to 6 percent in the mattress segment.

The stationary trade with furniture stores like Ikea, Conforama or But and the bed specialists Maison de la literie, Compagnie du lit or Litrimarche defend themselves against the pure on-line offerors. All major retailers now operate a multichannel strategy, meaning that they try not only to sell in their furniture stores but also via their own online channels. At the same time the shops are upgraded by events, more advice or more frequently changing exhibitions.

Leading in France are the large furniture stores Ikea, Conforama and But. Market leader Ikea claims a market share of 19.4 percent in 2017. Conforama and But did not publish any shares for 2017 but came to 16.1 and 13.4 percent respectively in 2016. According to estimates by IPEA, online commerce accounts for a total market share of around 12 percent. Half of this is accounted for by pure online providers and internet sales by conventional, previously purely stationary, providers.

Ikea aims for a 10 percent online share in France. Conforama claims to already generate 10 percent of its sales via the Internet. However, the company also offers entertainment and household electronics. Of the online furniture purchases, 82 percent are still being picked up at the stores. Conforma wants to do justice to this with additional furniture markets in the low-price segment. At the same time, other sales rooms should be created in which new furnishing ideas will be presented.

Furniture retail in France by sales channel 2017
  Sales 2017 (in EUR billion) Change 2017/16 (in %)
Furniture stores 4.91 +0.9
Kitchenhouses 1.30 +6.0
Furniture stores, medium segment 1.02 +1.4
Luxury furniture stores 0.37 +2.0
Craft 0.33 -0.4
E-Commerce, catalog-trading and others 1.83 +3.3
Total 9.76 +2.0

Source: IPEA

Conforama joined the French online pioneer Showroomprive.com in 2017 as an investor, hoping to gain expertise in online marketing. Due to the impending bankruptcy of the South African parent company Steinhoff Conforama sold its shares in early 2018 to the supermarket chain Carrefour.

However, the company intends to take advantage of the increased customer interest in the bedding segment with a new high-end store chain under the brand "Il etait une nuit" and is buying additionally more smaller bed houses. The chain But was for a long time for sale until it was taken over in mid-2016 by the third largest furniture retailer Lutz from Austria together with financial investors.

Contacts
Name Internet address Comments
AHK Frankreich http://frankreich.ahk.de Advises on entering the market in France
Federation française du negoce de l'ameublement et de l'equipement de la maison (FNAEM) http://www.fnaem.fr Association of the furniture trade
Union nationale des industries de l'ameublement français http://www.ameublement.com Association of the French furniture manufacturers


      

More information:
France Furniture market
Source:

Peter Buerstedde, Germany Trade & Invest www.gtai.de. Translation Textination.