THE next 36 months hold unprecedented opportunities for the local furniture manufacturing industry. Recent market research by the eThekwini Furniture Cluster (EFC) shows that South Africa’s leading furniture retailers are looking to replace imports by sourcing up to 2 million units per year from local manufacturers.
According to Paige Sherriff, Project Manager for the EFC, more than 50% of South Africa’s furniture is currently imported, mostly from China. “In 2019, South Africa imported R11bn furniture from China but due to a range of factors, our research shows that over the next three years the large furniture retailers have decided to source more goods locally,” Sherriff said.
The EFC’s intelligence is based on feedback from three of South Africa’s leading independent retailers which predicts a 3-4% year-on-year growth opportunity for buying local, specifically in upholstered furniture, office furniture and case goods, presenting the most opportunity for local manufacturers to take advantage of local supply. Retailers are looking to local manufacturers to supply the two million units required to meet the expected market demand.
Sherriff cautioned that while this could put South Africa’s struggling furniture manufacturing sector back on the world map, the opportunity is not just going to be given away.
“Whilst the opportunity for local manufacturers exists in these product categories, we have identified that firms that leverage this successfully will be those that align with the fabrication, capacity and design requirements of retail.
“Some examples from our research include the demand for multifunctional, contemporary and modular pieces (design) made with natural stone surfaces, brass finishes, plating (fabrication) at large volumes and economies of scale (capacity). Now it is up to the manufacturers to take advantage of this by aligning their own growth strategies to the lead enterprises predictions,” Sherriff said.
“This will give the manufacturers the direction they need for their strategic investment,” says Paige.
Other opportunities outside of the retail market are linked to sectors such as tourism and hospitality, and construction. With most furniture, reliant sectors will be returning to pre-Covid levels by 2023.
The EFC anticipates that residential construction, hospitality and tourism will see the most growth by 2024.
“There has been a clear need to establish direct dialogue between furniture manufacturers and retailers. Manufacturers simply do not know what retailers want. So, as a cluster we have developed a data-driven, market-led approach to create and facilitate an ongoing conversation that aligns supply and demand.”
Sherriff said the EFC is already seeing the positive impact of this approach. Despite the economic recession, the organization’s early successes include R1,5 million in new sales and 46 new jobs. Sherriff believes these green shoots have been since manufacturers have begun to align their own growth objectives to support retail growth drivers.