In 2017, home furnishings sales grew by 4% (year-on-year) to reach sales of AED7.1 billion.
Moreover, the expanding infrastructure in the United Arab Emirates has led to higher occupancy of residential apartments, resulting in an increase in demand for indoor furniture, particularly space-saving options due to smaller homes in an increasingly urbanised environment.
The United Arab Emirates has a large expat population with varying needs and desires. Hence, manufacturers are focusing on offering a wide range of indoor furniture options in contemporary designs.
Home furnishings is expected to post a value CAGR of 1% at constant 2017 prices to reach sales of AED7.5 billion by 2022.
Due to the economic slowdown many consumers in 2017 sought value-for-money home furnishings.
Discounts and promotional activities throughout the year helped to maintain consumer interest in the category, particularly deals such as getting a free mattress when buying bedroom furniture or a free lamp with purchases of living room furniture.
Unbranded home furnishings also grew in popularity due to economic uncertainty.
New products and innovations continued to play a strong role in categories such as mattresses and sofa beds. Sofa beds performed well in 2017 as manufacturers focused on new space-saving designs.
Mattresses continued to be considered essential items by most consumers, with quality and technology playing a key role in the purchasing decision. Interestingly, LED lamps register the strongest current value growth of 15%.
Homewares and home furnishing stores remained the leading distribution channel for home furnishings in 2017, while the wider availability of outdoor furniture, light sources and home textiles in hypermarkets and supermarkets such as Carrefour helped to boost the share of modern grocery retailers, with these outlets also benefiting from the rising popularity of private label products in these categories.
Thanks to already strong internet penetration among local residents and further investment in infrastructure from internet providers and mobile network operators, the internet retailing channel is set to gain further share over the forecast period. The leading players have recognised the opportunities provided by internet retailing and are investing in mobile applications as well as their brand websites.
It is expected that categories with relative limited online sales, such as outdoor living, window covering and light sources, will particularly benefit from these developments.
Al Futtaim Group, which manages the IKEA brand, remains the leading player with a value share of 16%.