Data from the Association of the German Furniture Industry VDM indicates that in 2023, the German furniture industry saw a turnover of approximately EUR 18 billion. This represents a decrease of 4.3% compared to 2022, with the second half of 2023 experiencing an even steeper decline of 8.4%.
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Notably, the largest decline occurred in the 'other furniture' category, encompassing furniture for living rooms, dining rooms, and bedrooms, among others. Sales in this category dropped by 12.6% to EUR 5.6 billion compared to 2022 figures. This downturn reflects a serious crisis within the German furniture industry, characterised by reduced production by German companies and decreased furniture purchases by German consumers.
There is clear evidence from Germany indicating that the furniture industry in the country is facing significant challenges. Consequently, there has been a sharp rise in the reported closures of manufacturing facilities. Additionally, there is increasing speculation about the appointment of trustees to oversee companies.
Seeking alternatives to the predominant reliance on German markets for Polish furniture exports is a challenging task. Given that a significant portion of Polish furniture, approximately one-third, is exported to Germany, diversifying sales destinations may seem like a distant prospect. However, exploring new markets is always worthwhile, especially considering the immense potential of the Polish furniture industry. Moreover, with declining export volumes, there is surplus production capacity that can be tapped into for new clientele.
The primary hurdle lies in the fact that over 50% of Polish furniture production caters to the German market or markets akin to it. Essentially, the Polish furniture industry's foundation is heavily reliant on German demand. While this isn't inherently problematic, breaking into other markets, such as the USA or India, requires offering innovative products. These markets are not particularly interested in "German products," at least not in large quantities, according to Tomasz Wiktorski from B+R Studio.
Exploring alternatives to existing strategies is prudent during challenging times. This may involve deeper market penetration or streamlining the supply chain to reach end customers more efficiently. Therefore, companies need to reassess their strategies, whether by seeking new partnerships or targeting higher market segments. There is also the argument for seeking alternative sales markets for Polish furniture companies. He highlights the French and Czech markets as examples where Polish furniture is gaining traction.
While venturing into new territories like the USA or emerging markets like India presents opportunities, replacing Germany as the primary buyer of Polish furniture seems daunting. Germany remains one of the largest and most stable markets in Europe, making it indispensable for Polish furniture exports. At the same time, the sheer volume of Polish furniture exports to Germany, coupled with factors like competitive pricing and long-standing business relationships, make it challenging to replace the German market.
Source: www.biznes.meble.pl