Driven by pent-up and deferred demand, India's online furniture and the home market are geared up to reach $40 billion in the next five years, a new report showed on Monday.
Over the next five years, an online furniture and home sales are expected to be growing at a strong 39 percent CAGR. The online home category includes home decor, furnishings, mattresses, and lighting.
The online furniture category will foresee 3X growth in shoppers in the next five years with a 1.8X jump in annual spending per shopper. This will enable 5X GMV (gross merchandise value) growth for the category over FY21-26, according to data provided by Bengaluru-based market research firm RedSeer.
The online furniture category is seeing a steep growth with more and more shoppers putting trust in online for-high ticket furniture purchases.
"Similarly, the online home category is expected to see a growth of 2.5X in shoppers in the next 5 years with a 1.3 jump in the annual spending per shopper to indicate 4X GMV growth," the report forecast.
Within the furniture category, verticals have crafted a niche for themselves.
Verticals dominate the premium 'Solid Wood' market whereas horizontals dominate the budget "plastic/metal and engineered wood" market.
"The average selling price (ASP) on verticals is 10X higher for furniture and 2X higher for decor than horizontals, indicating the difference in target customer base," said the report.
It added that verticals are focused on a set of customers who are experience conscious, look for choices and quality of the product rather than just price, and willingness to pay and for the online channels is high.
"Verticals with superior omnichannel presence, customer experience, product innovation, specialized supply chain, and technology capabilities are well-positioned to scale," the findings showed.