The Middle East is an attractive market for several marketers. This is a brief overview of this market for Furniture products.

1. GCC Furniture Market Overview
Tushar Vaidya
15th September ‘15

2. GCC Overview
Country GDP Per
Capita PPP
US$
Global
Rank
Population
estimate
% Ratio of Nationals
to Non-Nationals
Population as
% of GCC
population
Nationals Non-
nationals
Qatar 143,400 1 1,699,435 14.3 85.7 3%
Kuwait 71,000 10 4,079,698 31.5 68.9 8%
UAE 65,000 13 8,264,070 11.5 88.5 17%
Saudi Arabia 52,800 20 29,994,272 67.6 32.4 61%
Bahrain 51,400 21 1,195,020 48.9 51.1 2%
Oman 44,100 31 3,992,893 56.6 43.4 8%
Total GCC Population 49,225,388 100%
Sources:
•GDP Per Capita PPP data from CIA World Factbook – 2014 estimates
•Population data from respective country’s official estimates, as available in Oct 2014 2
India GDP Per Capita PPP in
2013 was US$ 5417

3.  A rich market.
 A youthful market. At a GCC market level, about 28% of the population is below
15 years old, and approximately 50% of the population is below 25 years old.
 Saudi Arabia is the largest chunk of the market, with 61% population salience.
 3 markets – Qatar, Kuwait & Bahrain – are essentially city states due to population
concentration in the urban areas. In balance 3 countries, the urban centers
account for most of the population.
GCC market characteristics
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4. GCC Furniture Market Size
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Country Value imported in 2010
(USD thousand)
Share in world
imports (%)
Global furniture trade 168,318,994 100
Gulf Cooperation Council (GCC) Aggregation 4,232,683 2.5
United Arab Emirates 1,829,368 1.1
Saudi Arabia 1,285,409 0.8
Qatar 417,615 0.2
Kuwait 329,771 0.2
Oman 192,833 0.1
Bahrain 177,687 0.1
Source: Government of Dubai – Department of Economic Development

5. GCC furniture market
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 Total GCC furniture imports are estimated at US$ 4.2 billion. Local production may be
assumed at an additional 20 % (comprising of Wooden Furniture & Upholstered
products). Hence total market size in 2010 may be taken at over US$ 5 billion.
 Assuming a 5% growth rate, this is an approximately US$ 6 billion market exit 2014.
 The biggest markets are Saudi Arabia and UAE. UAE is a “re-export” market while
Saudi Arabia is entirely domestic consumption.
 Flat market – no middlemen. International Supplier to GCC Importer to End User
 Market fragmented. Comprises of multiple local players in each country. A few pan-
GCC players – IKEA; Home Centre; Pan Emirates, Homes R Us; The One
 3 segments:
 Home
 Office
 Contract

6. Home Furniture
 “Inventory model”
 Primarily imported. Retailed through large format showrooms.
 The extreme high end is bespoke.
 Some local manufacturers for sofas
Consumer Trends:
 Increasing urbanization and concentration of employment opportunities around
population centers. Hence the key cities are where the marketer has to focus.
 Preference for apartments rather than houses, leading to a growing preference for
comparatively compact furniture designs.
 Due to large number of expatriates, market preferences are diverse. Arab consumers
like embellishments and “heavy” designs; European consumers like modern designs;
Asian consumers prefer cost effective products.
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7. Office Furniture
 “Inventory model”
 Primarily imported.
 Retail focusing on the SME / SOHO customers
 Selling companies often offer space planning services.
 Relationship oriented. Design continuity a major factor.
Trends:
 Key design genres:
 Modern : European style; clean lines
 Classical : Wood dominated; “Power” look
 Modular : Popular due to space efficiency & comprehensiveness
 Price ladder driven by country of origin. As follows:
1. European / US (at top end)
2. Korea/ Taiwan
3. Malaysia / Indonesia
4. China (at bottom end)
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8. Contract Furniture
 Significant sectors are:
 Office furniture
 Hospitality
 Labour camp accommodation
 Oil & Gas
 Schools
 “Back to back” basis
 Customers are knowledgeable. Usually appoint Consultants as the project leader.
 Customization is usually significant.
 Long Book to Bill cycle with resultant impact on cash flows / margins
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9. Routes To Market
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Parameter Non Exclusive Design Exclusive /
Geography exclusive /
Few agents
Project Exclusive Exclusive agent
Methodology Sell to everybody in
that country.
Give buyers exclusive
designs
Give exclusivity for
projects
Sell through one agent for full
country
Remarks Potentially a larger
market as this is not
restricted to a single
importer.
Onus of marketing is
on manufacturer
Suitable / possible
only if there is a wide
range of designs.
Avoids price
competition between
importers.
Agent takes
responsibility for
getting products
specified in projects.
Manufacturer actively
supports. Sometimes
other way around
Agent takes responsibility for
marketing. Possibility of
setting sales targets by
manufacturer. Suitable for
products / brands which can
command a price premium /
get specified
Suitable for large markets e.g. KSA, UAE.
Qatar while still a small market has tremendous potential due to the
upcoming 2022 Football World Cup and requires a separate strategy.
Suitable for small markets e.g.
Oman; Bahrain, Kuwait.

10. Crystal ball gazing
 Impending tsunami of a prolonged slump in oil prices will hit soon. Will significantly
impact the business environment.
 Several mitigatory steps expected from the GCC governments:
 Deficit bonds
 Sovereign fund redemptions
 Postponement of non-critical projects
 Cost cutting
 Nevertheless economic pain will trickle down and hit all sectors
 Possibility of market trading down / becoming more price sensitive. Possible
pressure on margins.
 Opportunity for Value For Money products
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11. THANK YOU