The outlook for decorative laminates use in the furniture industry is closely tied to trends in the production of ready-to-assemble (RTA) furniture. This type of furniture – also called flat-pack, knock-down, and kit furniture – is sold to consumers in boxes containing unassembled components, hardware, and instructions to put together the finished product:
- A wide range of furniture types are sold as RTA products, including beds, cabinets, chairs, desks, dressers, shelves, and tables.
- However, some types of furniture (such as upholstered chairs and sofas) remain impractical to sell as RTA products, with many consumers seeing manufactured-assembled types as higher quality and more durable.
- IKEA, Foshan Chenglin Furniture, Sauder Woodworking, Dorel Industries, and Quanyou Furniture are among the leading global suppliers of RTA furniture.
Global demand for furniture laminates is forecast to increase 3.0% per year to 5.4 billion square meters valued at $25.6 billion in 2024. Highlighted below are some of the key trends in the RTA furniture industry affecting market growth for furniture laminates.
RTA Furniture Sales Spike Amid COVID-19 Pandemic in North America, Mitigating 2020 Losses
The global furniture laminates market was hard hit by the COVID-19 pandemic in 2020, declining 11% in 2020 as RTA furniture production slowed or stopped in some areas, and the closure and downsizing of many offices restricted need for new and replacement furniture in office settings. Some world regions fared better than others, however. North America saw a less dramatic decline compared to other large markets, specifically Western Europe, where the pandemic exacerbated an already-weak economy:
- In North America, many homeowners spent more time at home due to shelter-in-place restrictions, a shift to telecommuting, and decisions to restrict travel and other entertainment, which – along with stimulus payments – often freed funds for home improvement projects or large ticket purchases that had previously been delayed, including purchasing new furniture.
- Sales of lower-cost, ready-to-assemble furniture especially benefited, as the affordability of these units makes them popular with lower- and middle-income households, which generally faced greater economic strain during the pandemic than higher-income households.
In 2021, global furniture laminates demand is projected to rise at nearly the same rate as it fell in 2020, boosted by rebounding building construction and RTA furniture manufacturing activity as COVID-19 vaccination rates expand and the lingering effects of the pandemic on these sectors recede.
More RTA Furniture Production Taking Place in Asia/Pacific, Eastern Europe
As the RTA industry in Western Europe continues to mature, producers in the region – the second largest market for furniture laminates globally and home to IKEA – are shifting production to countries with lower labor costs and more strategic proximity to emerging markets. As a result, Western Europe’s share of the global furniture laminates market will continue to slide through 2024.
As the largest producer of RTA furniture in the world, the Asia/Pacific region is the largest market for furniture laminates, and a major destination for foreign RTA furniture producers to establish or expand capacity:
- Manufacturers in China benefit from the huge size of local product demand, as well as from relatively low labor costs and economies of scale that make China a leading source of RTA furniture supply in other parts of the world.
- RTA furniture is also made in large quantities in Southeast Asian countries like Malaysia and Vietnam. For example, Nitori Furniture (Japan) operates a large RTA furniture plant in Hanoi, Vietnam with 5,000 workers.
Production capabilities in Eastern Europe are also substantial, and growing as more West European RTA furniture manufacturers open plants in the region to take advantage of the lower production costs. Poland, for instance, is one of the largest suppliers of RTA furniture to IKEA. Other producers of RTA furniture in the region include Romania, Russia, and Slovakia.
Tech Advances Continue to Make RTA Furniture More Aesthetically Appealing
A major barrier to RTA furniture sales is consumer perceptions that these products look less attractive than their more expensive manufacturer-assembled counterparts. However, technology improvements are making RTA furniture a more attractive and stylish purchase option for consumers. These include:
- advances in laminating technology that are enabling particleboard, which is commonly used in RTA furniture production, to more closely resemble solid wood
- the development of new locking systems that allow RTA furniture to be assembled with fewer – in some cases – no tools, and reductions in the average number of pieces that need to be assembled, reducing the difficulty and time needed to put together these products
Consumer buying will continue to shift away from furniture and department stores to outlets where RTA furniture is more likely to be sold, including home improvement centers, online retailers, and wholesale clubs.
Want to Learn More?
Global Furniture Laminates is now available from the Freedonia Group.
About the Author:
Peter Kusnic is a Content Writer with The Freedonia Group, where he researches and writes studies focused on an array of industries.