The volume of furniture production in Russia in 2022 increased compared to 2021
Photo: Vladimir MAZENKO
In the spring of last year, the situation looked alarming: there are enough of our own furniture factories in the country, but many of them are completely dependent on imported materials and equipment. And the gap between Western suppliers and Russia could lead, if not to a shortage, then to a sharp increase in furniture prices. In April-May, in many respects, this happened: sales prices increased by 30% and even 50%. The sharp increase in the dollar exchange rate also pushed up prices. But fortunately, the worst forecasts did not come true.
ALL CHAINS REBUILT
– The volume of furniture production in Russia in 2022 increased compared to 2021 in monetary terms by 15% to 356 billion rubles, and in physical terms it remained at the level of 2021, – said KP at the Association of Furniture Industries. Furniture and Carpentry of Russia (AMDPR).
That is, there has been no fall, everything is the opposite. And if we compare it with the year 2019 prior to the pandemic, then production growth increased by up to 58%, clarifies the Association.
– In an extremely short time, we discovered vulnerabilities on an industry-wide scale and quickly began to solve these problems, – says Alexander Shestakov, president of AMDPR. – Among them is the high dependence on imports of Russian furniture companies in the supply of the necessary components for the production of products: accessories, some types of fabrics, as well as paints, varnishes and adhesives. But today the supply chains have already been rebuilt: contacts have been established and contracts have been concluded with component manufacturers from friendly countries, as well as with Russian companies.
Furniture made of plastic materials showed the greatest increase: its production volume increased by 91%. In addition to wooden office furniture, it is an increase of one third. In physical terms, the production of kitchen furniture (+37%) and upholstered furniture (+22%) was the one that increased the most.
Furniture manufacturers are especially proud of the fact that they managed to keep prices at an acceptable level, which supported consumer demand.
“After the 2022 results, furniture prices increased by 11%, which is one of the lowest rates in the non-food category,” says Alexander Shestakov.
IS IT SUCCESSFUL TO REPLACE IKEA?
Surprisingly, sanctions against Russia are seen as the engine of growth by domestic furniture manufacturers, including the refusal of many furniture manufacturers and suppliers from “unfriendly” countries to work on the Russian market.
– In 2022, the volume of furniture imports into the country decreased by 40%, but Russian manufacturers quickly occupied this niche, – says Alexander Shestakov.
The Association of Furniture Manufacturers is confident that the departure of the Swedish IKEA ultimately did not affect the situation on the domestic market in any way, neither in terms of the range of products presented, nor in terms of furniture prices. According to the organization, IKEA’s share as a furniture manufacturer did not exceed 2-3%.
According to Alexander Shestakov, the problem of leaving IKEA exists exclusively in the information space:
– The niche occupied by the Swedish company has already been occupied by domestic manufacturers. For example, the First Furniture Factory launched the sale of “express kitchens”, this line of prefabricated kitchens that are in stock.
However, experts interviewed by Komsomolskaya Pravda saw IKEA as one of the world leaders in the industry and the company had a lot to learn. Consumers also highly appreciated IKEA furniture, its stores were very popular among Russians.
– IKEA is a business process that includes both quality and the attitude towards the customer, and how purchases and sales are made, – Konstantin Kukolev, director of Luxorta-Service, told KP. – Its value is that it included all this, and it was convenient for the consumer. At the moment, there are practically no alternatives to IKEA. If there is something that can be bought here and now, then 80% of the furniture, if we talk about the mass segment, is some kind of the early 2000s. IKEA, of course, was one of the market leaders.
– Furniture manufacturers are often asked: could you repeat the IKEA model? You know, furniture manufacturers and IKEA, this is like Mars and Venus, – Sergey Radchenko, vice president of the Association of Furniture and Joinery Industries, explained to KP in the summer of 2022. – IKEA is not a furniture distributor. It is an integrator that absorbed a furniture seller, a textile seller, an accessories seller, a lighting seller, designers in large numbers, and offered a comprehensive solution to the market. They have gained an experience that no one else has today.
However, there are no unsolvable problems. If the furniture industry continues to develop, we may have our own Ikea. The only problem is that not only the import of foreign furniture into Russia has decreased, but also the export of our furniture to Europe. According to Alexander Shestakov, the loss of won’s share in the European furniture market is one of the main negative consequences of the sanctions. Although now our furniture manufacturers are more actively developing the traditional markets of the CIS countries and the growing markets of the Middle East and North Africa.
Our manufacturers also expect support from the State, but not economic injections, but assistance to implement those measures that, according to furniture manufacturers, will allow the industry to grow faster. This is the introduction of tariffs on imported furniture, the ban on the supply of furniture from hostile countries, and the introduction of fine finishing and apartment equipment into the standards of housing under construction.
– It is also necessary to provide support to exporters by creating warehouses and showrooms abroad, compensating for logistical problems, Alexander Shestakov is sure.