Ruqayyah Snyder
The Australian furniture industry is a small but growing market, with an anticipated growth rate (CAGR) of 6.10% between 2024 and 2032. The market size of the furniture retailing industry in Australia was $9.9 billion in 2021, and it is expected to grow to $12.1 billion by 2024-25. The industry provides employment for over 26,000 full-time workers and contributes around $2.6 billion to the local economy each year. The biggest companies in the Australian market include Harvey Norman, IKEA, and BBQSAM, with bedroom furniture being the largest segment.
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What You'll Learn
Market size and revenue
The Australian furniture industry is small but growing. An IBIS World report from 2021 stated that the market size of the furniture retailing industry in Australia was $9.9 billion, making it the 12th ranked retail trade industry in the country. The industry is expected to grow, with revenue projected to rise at an annualized 0.9% over the five years through 2024-25, reaching $12.1 billion. This includes an anticipated upswing of 1.3% in 2024-25.
The furniture industry in Australia has faced challenging times in recent years, with financial instability and volatile trading conditions impacting its performance. However, it is showing signs of growth, with an average growth rate of 1.4% over the past five years. The total revenues expected from 2015 sales figures are about $14 billion, and homeware figures are reported with the furniture segment, with an expected annual growth rate of 17% through 2023.
The furniture market in Australia is experiencing significant growth due to several factors. Evolving lifestyle trends and changing consumer preferences are driving the demand for innovative, stylish, functional, and aesthetically pleasing furniture pieces. The rise of e-commerce and online shopping has also significantly impacted the Australian furniture market, with consumers attracted to the convenience, wide variety of choices, and competitive pricing offered by online retailers. The integration of advanced technologies in furniture design, such as smart and multifunctional pieces, is also fueling demand in the market.
The biggest companies operating in the Australian furniture retailing market include Harvey Norman, IKEA, and BBQSAM. Bedroom furniture is the largest segment of the furniture retailing market in Australia, followed by lounge and dining room furniture. Furniture manufacturing in Australia provides about $2.6 billion to the local economy each year, with about 5,000 manufacturers employing over 54,000 people. The industry also provides employment opportunities for over 26,000 full-time workers in retail.
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Employment opportunities
The Australian furniture industry is a significant contributor to the country's economy, with an estimated value of $27.4 billion and employing more than 250,000 people directly and up to 500,000 indirectly. The industry has faced challenging times in the past, including the global financial crisis, but it remains resilient and is expected to grow.
Furniture retailing in Australia provides employment for over 26,000 full-time workers, and the industry's impact on the economy is substantial, with $8.67 spent on wages for every $1 spent on costs. The biggest companies in the market include household names such as IKEA, Harvey Norman, and Steelcase Australia. The industry is expected to grow, driven by favourable economic factors such as rapid urban infrastructure development and increasing demand from residential and non-residential sectors.
The Australian furniture industry is committed to sustainability and using sustainably sourced products and materials. This commitment benefits the economy, environment, and community, and it also drives innovation and unique designs. The AFA, or Australasian Furnishing Association, is the peak industry body representing the interests of the industry and its members, which include enterprises that design, manufacture, and supply a wide range of furnishings.
The furniture market in Australia is expected to be valued at USD 8.78 billion by 2025, up from USD 7.76 billion in 2019. The market is influenced by various factors, including the availability of online furniture retailers, raw material prices, and geopolitical issues. Despite the challenges, the industry remains an essential contributor to the country's economic well-being and provides numerous employment opportunities across various sectors.
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Competition and sales
The Australian furniture industry is small, but growing. It is expected to grow at a rate of 6.10% from 2024 to 2032, with a previous growth rate of 1.4% over the last five years. The market size of the furniture retailing industry in Australia was $9.9 billion in 2021, and it is expected to reach $12.1 billion by 2024-25.
The industry has faced challenging trading conditions in recent years, with the global financial crisis and the instability of financial markets impacting performance. However, the industry is expected to grow in the future, driven by several factors. These include the convenience of online shopping, the rise of direct-to-consumer brands, and the COVID-19 pandemic, which led to more time spent at home and a focus on home improvement. The number of users in the Furniture & Homeware segment is projected to reach 5.3 million by 2025, with 11% of market revenue likely to be generated through online sales by 2023.
Competition in the industry is moderate and increasing. The biggest companies in the market include Harvey Norman, IKEA, and BBQSAM. Bedroom furniture is the largest segment, with lounge and dining room furniture sales also being significant. The level of competition in lounge and dining room furniture sales is particularly high, with these items dominating the industry.
Sales in the industry are influenced by residential construction trends, with periods of increased housing activity typically leading to higher furniture sales. Pay-later financial solutions have also supported retail activity, enabling consumers to make incremental payments on big-ticket items. Sustainability considerations are also shaping market dynamics, with individuals seeking eco-friendly and responsibly sourced furniture. This trend is being responded to by leading manufacturers, who are adopting eco-conscious practices and materials.
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$11.35
Online sales and e-commerce
The Australian furniture industry is one of the fastest-growing categories in the country. The market size of the Australian furniture retailing industry was $9.9 billion in 2021 (measured by revenue), making it the 12th ranked retail trade industry in the country. The industry is expected to continue growing, with the market size expected to increase by 20.1% in 2021.
The boost in demand for furniture in Australia has motivated retailers to enhance their online shopping experiences. Many companies have started implementing new features on their websites to replicate the in-store experience and encourage customers to shop online. For instance, Plush offers augmented reality, allowing customers to preview furniture in their room. This unique shopping experience has contributed to increased conversions both online and in showrooms. Similarly, King Living constantly enhances its global websites to improve the customer experience and strengthen its brand story. On the King Living website, customers can view products from alternate angles, zoom in to scrutinize details, or get a 360-degree view.
Online ratings and reviews are crucial for big-ticket purchases like furniture. According to eMarketer, online ratings and reviews are the most common sources consulted by respondents when researching expensive items online, even more so than word of mouth, in-store sales associates, or social networks. Amart Furniture, an Australian company, pays special attention to its product return policy, as this is one of the most important factors for online purchases. The company offers a 180-night sleep guarantee on its orthokinetic mattresses, allowing customers to exchange their mattress within 180 nights if they are unsatisfied. Snooze, a bedroom specialist store, also offers ratings and reviews for each product, including ratings based on comfort, support, materials, and overall sleep experience for mattresses.
Payment solutions like Afterpay and Zip Pay have also supported retail activity in the challenging economic environment. Cards are the most common payment method in the Australian Furniture & Homeware eCommerce market, with VISA and Mastercard having an 86.7% share, and American Express with a 67.3% share. Other commonly used payment methods include PayPal (70.8%) and Afterpay (58.4%).
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Industry growth and projections
The Australian furniture industry is small compared to other worldwide providers, and its size is more susceptible to financial instability. However, it is growing, driven by several factors. Firstly, the industry is influenced by the rise in e-commerce and online shopping, which has been accelerated by the COVID-19 pandemic. The convenience of online shopping, coupled with a wide variety of choices and competitive pricing, has led to a surge in digital transactions within the furniture sector. The number of users in the Furniture & Homeware segment is projected to amount to 5.3 million by 2025, with 11% of the entire market revenue likely to be generated through online sales by 2023.
Secondly, evolving lifestyle trends and changing consumer preferences are increasing the demand for innovative, stylish, and functional furniture pieces. Consumers are seeking furniture that aligns with their tech-savvy lifestyles, resulting in a growing market for smart and multifunctional pieces. Sustainability is also playing a pivotal role in shaping market dynamics, with individuals increasingly inclined towards eco-friendly and responsibly sourced furniture. Leading manufacturers are responding to this trend by adopting eco-conscious practices and materials, further stimulating market growth.
Thirdly, the performance of the furniture industry is closely linked to residential construction trends. Periods of increased housing activity typically result in higher furniture sales. Despite a decline in residential building construction over the past five years, industry revenue is expected to rise. Pay-later financial solutions have also provided some relief, enabling consumers to make incremental payments on big-ticket items and supporting retail activity. It is projected that the industry revenue will increase at an annualized rate of 0.9% over the five years through 2024-25, reaching $12.1 billion. The market size of the furniture retailing industry in Australia is projected to exhibit a growth rate (CAGR) of 6.10% during 2024-2032.
Finally, the Australian furniture industry is expected to continue growing steadily if economic circumstances remain stable. The total value of the online home furnishing industry in Australia could be worth over $407 million by 2023 if current shopping trends continue. The industry currently provides employment opportunities for over 26,000 full-time workers, with about 5,000 manufacturers active and employing over 54,000 people.
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Frequently asked questions
The market size of the furniture retailing industry in Australia was $9.9 billion in 2021, measured by revenue. It is one of the fastest-growing categories in the country.
The Australian furniture industry is expected to grow. An annual growth rate (CAGR) of 8.17% is predicted from 2025-2029, resulting in a projected market volume of $436 billion by 2029. The industry is projected to exhibit a growth rate (CAGR) of 6.10% during 2024-2032.
The growth of the Australian furniture industry is driven by evolving lifestyle trends, changing consumer preferences, the influence of e-commerce, the convenience of online shopping, sustainability considerations, and the integration of advanced technologies in furniture design.
