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The United States obtained the largest volume of revenue in the furniture market with more than 233 billion dollars in 2020, is there an opportunity for internationalization of Latino entrepreneurs in this category?
The furniture industry in the world comprises several aspects such as: raw materials, manufacturing, distribution, packaging, transportation, marketing, etc. In this post we will see the main markets that compete in this category and the opportunities that Latin American industrialists have in this sector.
Let's begin by explaining that this sector focuses on various movable items designed to support human activities such as sleeping or sitting, as represented by sofas, beds, bunks and chairs; as well as products to support or store objects like shelves, bookcases, chests of drawers, etc. This industry excludes immovable household objects such as sinks and faucets, as well as tableware, cutlery and other small objects.
According to Statista, "The United States in 2020 had the highest revenue volume in the furniture market with more than $233 billion." And the list goes on:
Now, for the production chain to start moving its gears, raw materials such as wood, paper pulp, charcoal, etc. are needed. Let's look at the main exporters and importers in the world according to the United Nations and Agriculture Organization:
There are other supplies such as wood-based panels, where China and Canada are the largest exporters with 12% and 10% respectively. Likewise, vegetal charcoal where Cuba with 4% and Paraguay with 3% participate in the amount of exports per country.
Now let's look at the countries that import the most raw materials for the construction of furniture in the world.
If we look at it, the United States is a major competitor in this category, not only for the volume of revenue generated by the industry, but for being one of the largest importers in the world, both of raw materials and furniture in which Mexico stands out, with a share of almost 11 million dollars according to a report by ICEX, .
Then, what about the furniture industry in Latin America? What are the opportunities for Latin entrepreneurs if they decide to compete in the U.S. market, either as suppliers or producers? Well, according to data from the EFE agency, "the sales of the wood and furniture industry benefited from the pandemic by growing by 8% in Latin America in 2020 due to the increase in sales of furniture for teleworking".
In addition to this, marketplaces such as Amazon have played an important role in this industry, among other things because of the specialization and ease that the end user has at the time of purchase. Therefore, Latin American entrepreneurs in this category could benefit from the U.S. market. According to Statista, annual spending for 2018 by U.S. citizens was USD $518, among which leisure furniture and master bedroom furniture stand out.
Finally, according to the same study, Memorial Day sale, celebrated on the last Monday of May; Labor Day sale, first Monday of September and Black Friday, Friday after Thanksgiving, are the days when most furniture is bought in the United States.