Recovery hopes for South African furniture makers as retailers expand local sourcing

The next 36 months are promising for the local furniture manufacturing industry, says the eThekwini Furniture Cluster (EFC), which says its market research among leading South African furniture retailers indicated they were looking to replace imports by sourcing up to 2 million units per year from local manufacturers.

The next 36 months are promising for the local furniture manufacturing industry, says the eThekwini Furniture Cluster (EFC), which says its market research among leading South African furniture retailers indicated they were looking to replace imports by sourcing up to 2 million units per year from local manufacturers.

According to Paige Sherriff, project manager for EFC, more than 50% of South African furniture is currently imported, mainly from China. “In 2019, South Africa imported R11 billion of furniture from China, but due to various factors, our research shows that over the next three years, major furniture retailers have decided to source more locally produced, ”says Paige.

EFC research, based on feedback from three of South Africa’s leading independent retailers, predicts an annual growth opportunity of 3-4% for local buying, particularly in upholstered furniture, furniture, desk and storage, presenting the greatest opportunity for manufacturers to take advantage of local sourcing. Retailers are looking to local manufacturers to supply the 2 million units needed to meet expected market demand.

Sherriff warns that while this could put South Africa’s struggling furniture industry back on the world map, the opportunity will not simply be offered.

“While there are opportunities for local manufacturers in these product categories, we have identified that the companies that will successfully take advantage of them will be those that align with the manufacturing, capacity and design requirements of the business. detail. Some examples of our research include the demand for multifunctional, contemporary and modular (design) pieces made with natural stone surfaces, brass finishes, high volume plating (fabrication) and economies of scale (capacity).

“Now it’s up to manufacturers to take advantage of this by aligning their own growth strategies with the expectations of large companies,” says Paige. “This will give manufacturers the direction they need for their strategic investment,” says Sherriff.

Other opportunities outside the retail market relate to sectors such as tourism, hospitality and construction. With most furniture, dependent sectors will return to pre-Covid levels by 2023, says the EFC.

Establish a dialogue between manufacturers and retailers

The market intelligence used to identify these trends was conducted by the EFC to fulfill its mandate of boosting the competitiveness of the sector by facilitating market entry opportunities and developing the competitiveness of manufacturers to unlock those opportunities.

“It has become necessary to establish a direct dialogue between furniture manufacturers and retailers. Manufacturers just don’t know what retailers want. So, as a cluster, we have developed a data-driven and market-driven approach to create and facilitate an ongoing conversation that aligns supply and demand, ”says Sherriff.

Growth targets

The EFC says it sees the positive impact of this approach. Despite the economic recession, the organization’s early successes include R1.5m in new sales and 46 new jobs. Sherriff believes these green shoots have been around since manufacturers began aligning their own growth targets to support the growth engines of retail. These are:

1. Positioning on the market to achieve quality-price balance

Retailers and manufacturers need to understand which market segment they want to target, and then put in place value chain sourcing strategies to meet the demands of that segment.

2. Improving Customer Experience Through Agile Retailing

Products are no longer sold in isolation. Successful brands focus on serving the end user. Whether it’s installation assistance, improved logistics to ship direct to customer, or offering various manufacturing options that can be triggered and delivered on short notice.

3. Social and environmental sustainability

Manufacturers who are able to unlock opportunities in the retail market are successfully leveraging sustainability in a number of ways, such as sourcing raw materials and innovations, investing in research and development, and catering. old products for a longer life.

“When manufacturers compare their businesses to growth drivers and assess their operational capacity to support them, they can drive growth in a practical and proactive manner,” says Sherriff. “Our data-driven intelligence tools therefore help manufacturers more strategically align with their market of choice and develop their model to serve that market.”

She sums up by saying that the identified import substitution opportunity will help EFC achieve its goal of increasing the economic potential and growth of the local furniture manufacturing sector.

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