Industry Analysis of Furniture Market

Industry Analysis of article of furniture Market Nidhi (ABM 11032), Abhishek Ranjan Besra (PGP 29368), Nikhil Madan (PGP 30323), Poem Kabra (PGP 30329), Anurag Kumar (PGP 30302), Nivaak Shah (PGP 30325), Ruchi Shah (PGP 30341) piece of article of furniture IMPORTS IN INDIAThe furniture imports in India has maintained a signifi reart offshoot in past long time. The key factors terceting to increase in imports in India atomic number 18 change magnitude housing and commercial construction, increase in income take and influence of global lifestyle on urban population of India which tempts them to cash in ones chips towards the imported furniture. Earlier the European furniture was the major subscriber in furniture import in India but from past few eld a major portion of furniture is imported from China alone.During July 28, 2014 to horrible 28, 2014, India imported wooden furniture worth USD 1,626,772 followed by Italy and United States which exported furniture wood worth USD 34 8,207 and USD 254,712 respectively. The import data for this one month can be shown in pie chart as belowWooden Furniture- major Supplier Countries by Value (in USD) during July14- August14 (Sourcewww.infodriveindia.com/furniture-wood-import-data.aspx)The furniture imports in India have increased upto 64% over the period of five dollar bill years from 2001 to 2005. The increase in the furniture imports is shown in the graph belowFurniture Imports in India during 2001-2006 Source http//www.ibef.org/download/Furniture_170708.pdf)LABOUR VS OUTPUTAccording to natural law of Diminishing Marginal Returns, the increase in one excitant beyond a certain limit tutelage others fixed will lead to decrease in productivity. In furniture industry, the analysis of diminishing borderline returns was done by considering the labour involved in the manufacturing of put back. A form table in a dealers shop in Delhi, Godrej Dealers, costs Rs. 2000. The production of a table requires 2 labours. If 5 carpenters are allotted to produce one table, the productivity increases but if the labour input goes beyond 5, in that location is a make pass in productivity of table furniture. The analysis can be shown in the graph below(Source Survey, Godrej Dealers) acquire ESTIMATION (Organized firmament)To think the demand we have taken demand as a dependent shifting and other factors like price of products, substitutes and income direct as self-sufficient variable.Two venture were taken Null hypothesis There is no relationship between unaffiliated and dependent variable and Alternative hypothesis There is a relationship between independent and dependent variable. If one of the hypothesis is rejected other will be automatically accepted.For create sector the demand go bad which is developed has expense of the wooden furniture (P), Income directs of consumers (I), expenditure of the metal/fibre furniture (P1) as independent variable and Expenditure of wood (Q) as dependent va riable. implore function Q= (P, I, P1).The primary data of price has been collected from Godrej dealers of the Godrej Company. Income levels were collected from CMIE reports. solely the primary data are constrained to Delhi.To develop Goodness of fit, the function has been assumed to be liner and regression analysis has been done to estimate the demand.After regression analysis, following model is obtainedQ= 6773.461317- 0.3281P+ 0.02705 I + 11.7609 P1R2= 0.699, Adjusted R2= 0.548Coefficient of P- Price of the wooden furniture is veCoefficient of me-Income level of consumers is + veCoefficient of P1- Price of substitutes (metal/fibre) is +veThe above results shows a min more than a moderate relationship between dependent and independent variable. According to the survey of R2, 69% of the demand transition is explained by the variation of the price of the products, income level and price of the substitutes. Others factors which are not taken into describe into above model shou ld be government policies regarding cutting and selling gold braid and woods, import of woods etc.The above coefficient of independent variable gives us the result which is related to microeconomic theory. It clearly states that the demand (Q) falls with ascension prices of main product and rises with rising income levels and prices of substitutes. fig no. . Organized sector Regression fit quantity Price of product keeping ceteris paribusFig no. . Organized sector Regression fit quantity income keeping ceteris paribusHypothesis testing By using the value of obtained value of t-stat and P-values the above mentioned hypothesis will be tested.Table no. .Here, we have considered level of significance to be 5% i.e = 0.05 and degree of freedom to be n-k-1, where n no. of observations = 10 and k no. of independent variable= 3Hence, we get t (, n-k-1) which is t (0.05, 6). From statistical table (t distribution) the calculated t- value is 1.943.FindingsTable no..According to the data in dependent variables like P and I doesnt show any significant impact on Quantity demanded (Q) apart from variable P1 which is significant. This kind of result is obtained mainly because of less(prenominal) number of data.FUTURE OUTLOOK RECOMMENDATIONSAs the furniture industry in India is largely unorganized and fragmented, it provides immense opportunities to domestic and global players. The main precedent for increase in demand for furniture is on account of increasing purchasing power of the consumers, change in the lifestyle, increasing urbanization and availability in tier II and III cities. For increasing the product availability, organized furniture manufacturers are also getting into tie-ups with E-commerce retailers. The furniture retail custody are also focusing on increasing their presence in tier II III cities.India Furniture Market Forecast Opportunities, 2019, estimates the regions furniture market will grow at a CAGR of around 26% during 2014-19.Western region i s likely to be the highest revenue contributor in the furniture segment, followed by southern region as there are a large number of industrial hubs and upcoming base of operations developments in these regions. Over the next few years, the Indian furniture market is expected to witness increasing consolidation due to growing inlet of international companies as a result of the governments c% FDI approval into the countrys furniture industry. As a result, the pct of small and mid-sized furniture players largely forming the unorganized sector is expected to fall over the coming years.The present market size of online sales in India is at Rs. 200 crore at present and is expected to grow five times to Rs. 1,000 crore by 2016. Certain categories such as coffee tables, bookshelves and shelves in general could be the bestsellers in the near future. This comes with its own limitations as certain items required to be seen and touched, like sofas. It is also believed that it will emerge as the most profitable segment in the e-commerce market.