touch iran furniture market & industry
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Touch Iran Furniture Market & Industry
Contents IRAN FURNITURE HISTORY ....................................................................................................................................... 3
FURNITURE CATEGORIES ...................................................................................................................................... 6
1-Home Furniture ...................................................................................................................................................... 6
1-1-Panel Based (Surfaces) Furniture ................................................................................................................... 6
1-2-Modern Home Furniture .................................................................................................................................... 6
1-3-Classic Home Furniture ..................................................................................................................................... 7
2-Office Furniture ...................................................................................................................................................... 8
2-1 Panel Based Office Furniture ........................................................................................................................... 8
2-2 Metal-Plastic furniture ........................................................................................................................................ 8
2-3 Modern Office Furniture .................................................................................................................................... 9
2-4 Classic Office Furniture ................................................................................................................................... 10
3-Public seating ....................................................................................................................................................... 10
IRAN FURNITURE INDUSTRY............................................................................................................................... 11
Furniture clusters .................................................................................................................................................... 11
EMPLOYMENT ....................................................................................................................................................... 15
IRAN FURNITURE MARKET ................................................................................................................................. 16
Iranian Preferences for Furniture .......................................................................................................................... 16
Iran Import of Furniture........................................................................................................................................... 17
Distribution of Furniture Exporters to Iran ........................................................................................................... 17
Iran Furniture Export ............................................................................................................................................... 18
Iran`s Furniture Export Market Distribution ......................................................................................................... 18
Import and Export fluctuations .............................................................................................................................. 18
SALES AND DISTRIBUTION CHANNEL .............................................................................................................. 20
Iran Furniture Bazar and Retail Stores: ............................................................................................................... 20
Final Points ................................................................................................................................................................... 23
IRAN FURNITURE HISTORY
In 1934, Erich Schmidt (archaeologist), excavated a chair that dates back to 6,000 BC in Rey,
Iran. This piece of art is the oldest furniture that has been found in Iran so far. Wood products
were first introduced in Iran history around 4200 BC when ancient Iranians began crafting
wooden agricultural and hunting tools, wheels and gharries.
By the time of Achaemenid Empire, 550 BC–330 BC, woodworking had been turned to an
extensive industry including construction and infrastructure, shipbuilding, weaponry and so on.
For centuries woodworking was merely limited to traditional handcrafting methods and despite
remarkable innovations it wasn’t until 1900`s that first industrial woodworking machineries got
installed for match and lumber manufacturing.
Dominant climate of Iran is characterized as hot and dry. Unlike many other parts of the world,
thanks to low humidity and lack of floor moisture carpets, the Iranian globally well-known
artifact, could easily provide comfortable sitting and laying in almost every Iranian household for
centuries. Along with modernism in 19th century, using furniture became a fashion among elite
families. By the mid-twentieth, home furnishing was widely adapted and wealthy and educated
classes had joined the growing trend of using furniture as a complement to carpets.
In line with the emerging furniture market, many domestic entrepreneurs started producing high
quality and competitive products. To name a few MOBILRAN, SADEGHI, JAVAN, SABORI
and CENTRAL DÉCOR were among pioneers that propelled the domestic furniture industry to
form a business cluster.
Facing an eight-year long war right after Iran Islamic revolution in 1979, many industries
including furniture got hindered from technological advancements and global design competition.
The second transition in furniture industry thus occurred around 1990s when newly
imported machineries introduced a larger selection for raw materials such as MDF, polywood,
laminated boards, chipboard and hard board.
FURNITURE CATEGORIES
In Iran , furniture is assorted in three main categories :
1-Home Furniture 1-1-Panel Based (Surfaces) Furniture
Made of different kinds of panels including MDF, Multi Fiber, Polywood, Hard Board, and the
like. They are mostly used for sleeping or lying, storage and surface furniture such as tables,
cabinets, shelves, drawer, bookcase, and so on. Their applications cover Livingroom furniture,
bedroom furniture, and kitchen and bathroom furniture.
1-2-Modern Home Furniture
Mostly used in living room and dining room furniture. The main frame could be of wooden or
metal type. They are usually stuffed by foam and covered by upholstery fabric or leather.
1-3-Classic Home Furniture
Used in living room and dining room. Composed of wood and fabric, and further luxurified by
inlays, wood craving, carpeting and Persian wooden mosaic. Classic home furniture ranges from
sitting furniture, tables, book case, drawers, desk, TV set and alike.
2-Office Furniture 2-1 Panel Based Office Furniture
Usually panel-based with different applications such as table, office desk, computer desk,
bookcase, file case, drawer, divider and so on.
2-2 Metal-Plastic furniture
Metal and plastic cover the main categories of materials used in producing office seating furniture
such as swivel chair where metal and plastic parts support swiveling function.
2-3 Modern Office Furniture
Mostly used in lobbies, waiting and meeting room. The main frame could be of wooden or metal
type. They are usually stuffed by foam and covered by upholstery fabric or leather.
2-4 Classic Office Furniture
Includes sitting, storage and surfaces furniture upholstered on metal or wooden frames by fabric
or leather. Their application is mostly limited to management offices, guest room, lobby,
conference hall and the like.
3-Public seating
Including modern and classic furniture mostly used in public areas such as hotel, theater and
cinema, educational institutions and learning spaces, transport hubs and etc.
.
IRAN FURNITURE INDUSTRY
Furniture clusters
Since 2007 furniture supply chains have been unified in to clusters in cities with most value
creation capacity. Despite lack of precise data about production and sales volume, as depicted in
the clusters distribution map Yaftabad and Qom seemingly have denser and more organized
contribution in furniture market supply.
Cities of Furniture
Even though furniture producers are dispersed across the country, but there are some cities where
aggregation of numerous producers has created a hub. Tehran, Qom and Malayer, Mashhad,
Tabriz, and Marand are among cities with the major hubs.
In addition to the cities the producers are also diversified in terms of their size and their
production methods by which they can be classified into three main groups:
In addition to the cities the producers are also diversified in terms of their size and their
production methods by which they can be classified into three main groups:
Large Industrial Producers: Legally registered and licensed plants with more than
100 employee, manufacturing mostly panel based furniture. There are around 30 producers with
such specifications. Being equipped with modern machineries, technology deployment, hiring
innovative designers and professional engineers are their success factors in offering high-quality
products. In contrast to other classes, outsourcing is a key strategy to large industrial producers.
Small and Medium Size Producers: Around 430 producers with 10 to 99 employees have been
categorized in this class. Given the fact that “A to Z” of the production process take places in
their workshops, there is no room for outsourcing strategy. Direct sale in owned showrooms or
stores represents most of this class sales strategy in pursuit of creating higher value in both
production and sales section.
Micro Producers: There are more than 27000 small workshops, mostly using traditional skills
and instruments. Despite the national respect for keeping the traditional craftsmanship alive,
inherited from father to son or master to apprentice, but at some point lack of improvement in
production techniques such as optimization or industrial machineries deployment threatens the
competitive capacity of micro producers which further down the line makes them to either
outsource some parts of their production or to turn in to giving outsource service to large or
medium size producers.
EMPLOYMENT
In 2012–13, Iran employment rate was measured as 87.8% covering 24 million people across all
sectors in Iran. The largest employment share of 48.8% was in service sector followed by industry
sector of 34.4% and finally 16.8% of employment share in agriculture.
Today, furniture supply chain is composed of 1600 industrial and non-industrial producers as well
as 50,000 SMEs, all together holding about 10% of total employment in Iran industrial and
service sectors. Therefore, regardless of furniture sector’s economic prosperity, government is
incentivized to support its survival. The supportive actions are addressed as bundle of regulatory
preferences, infrastructural investments and fiscal policies. For instance, very recently, Iran and
Turkey signed a mutual contract to boost up bilateral import-export transactions in form of tariff
preferences. Among the products listed in the contract, Turkish furniture import had been
facilitated by means of 40% discount on customs tax & duties, which later got revised to 10% in
order to support domestic production. Regardless of how differently these two discount rates
could have impacted the industry, it implies the significant role of furniture industry from policy
making perspective.
IRAN FURNITURE MARKET
With the total population of 80 million, surrounded by potential export market of 130 million
people in neighbor countries, Iran is considered as not only one of the most appealing emerging
markets but also as one of the most promising ones that has been attracting growing number of
foreign commercial delegations and investments specially after The Joint Comprehensive Plan of
Action (JCPOA). According to the “Director of National Council of Furniture, Decoration, &
Correlated Industries”, Iran Furniture Market turnover has exceeded 5.7 Billion USD per year.
Iranian Preferences for Furniture
As mentioned earlier in old days, spacious houses with separate and large living, dining and guest
rooms were decorated with carpets and “classic furniture”. Later smaller houses or apartment
lifestyle called for a different furnishing style which itself went through a transition phase to
adapt to modern TV & Digital technology-centered lifestyles by introducing creative and
comfortable designs. Multi-purpose and transforming furniture, e.g. combo bed and sofa, are a
part of the answer to space saving and technology-driven demands.
Carpet, furniture, curtain and chandelier (Lusteri) are the main elements in depicting Iranian
interior design scheme with the women as the key players in purchase decision making process
ranging from need recognition to choice assessment and final purchase.
Discarding old household goods and replacing them with new ones is a part of an Iranian culture
in welcoming and celebrating New Year (Nowrooz) in March. The same trend also applies for
September right before starting school year when families prepare themselves for the change by
reorganizing their environments. Thus non-surprisingly during these two periods, furniture sale
grows double in size. Another share of Iranian furniture purchase behavior is related to
marriage, where as a traditional custom the bride’s family provides the newlyweds with a
complete set of household goods including furniture, carpet, home appliances and so on. These
cultural factors have provided a dynamic ambient for the furniture market to evolve and grow
profitably.
Iran Import of Furniture
Figure No.1 shows that import volume to Iran for all furniture types falls under HS Coded 9401,
9402, 9403 and 9404 in years 2008 to 2013.
For more information, HS Codes are described as below:
9401 seats (except barber, dental, etc.), and parts.
9402 medical, surgical, dental or veterinary furn etc.
9403 furniture nesoi and parts thereof.
9404 mattress supports, articles of bedding etc.
Distribution of Furniture Exporters to Iran
China, Turkey, UAE, Italy, France, Germany, Malaysia, and Japan are the main exporters to Iran
9404 in years 2008 to 2013.
Iran Furniture Export
Figure No.2 shows export volume to Iran for all furniture falls under HS Code 9401, 9402, 9403,
9404 in years 2008 to 2013.
Iran`s Furniture Export Market Distribution
Iraq, Kazakhstan, Armenia, Georgia, Afghanistan, Kuwait, UAE, Malaysia, Spain,
USA, Australia and Austria are main targets for Iran furniture export.
Import and Export fluctuations
Iran economy’s lifeblood, oil export, has dropped sharply by imposed sanction over past years,
which caused a slide in Iran's currency (Rial). Rial steeply lost its value against US dollar in the
short period of mid-2011 to early 2012 and remained intact around its final rate afterward. As the
aftermath reaction to the sudden decrease in national currency value, imported goods got
classified and prioritized to 10 main categories based on their impact and urgency. The pursued
goals of the prioritization policy were first to effectively allocate subsidized foreign currency to
importers for their purchases and second to control the demand of open market for foreign
currencies.
As a consequence, luxuries goods including furniture, were ranked in the 10th category, implying
severe restrictions on furniture import due to its domestic supply and luxurious characteristic.
Thereafter the import level collapsed sharply to 230% in 2011 and 330% in 2012. However,
interestingly, domestic production not only supplied Iran market needs but also, export volume
got increased by 230% in 2011 and 140% in 2012.
SALES AND DISTRIBUTION CHANNEL
Sales and distribution channel differ across producer size:
Large Industrial Producers: Supplying high quality and competitive products, large producers
manage their own showrooms, exclusive or contracted stores as the main sales channels. Uniform
sale price in own showroom and stores or even competitive prices in markets that do not enforce
fixed price lists, are the main sales strategy amongst large industrial producers.
Small and Medium Size Producers: SMEs often have their own showroom, or retail stores, but
they are small in numbers. Shoppers keep exploring these producers to enhance their vendor list.
It’s noteworthy to mention that dealers are not advantageous in this market because local
directories or large seasonal exhibitions are the main communication medium between shoppers
and producers.
Micro Producers: Lack of financial power in running their own showroom or store
compels micro producers to distribute and sell their products through sales store which usually
leads to inequality of bargaining power in favor of store owners.
Iran Furniture Bazar and Retail Stores:
Yaftabad Bazar, the most famous furniture bazar, is located in Yaftabad district in the south
center of Tehran. Along both sides of Yaftabad Ave., (figure no.), a wide range of spacious,
luxuries malls to simple small shops and showrooms offer their products and services.
There are at least 10 malls with the total area of 122000 square meters comprised of 1230 stores
and showrooms, serving different target markets. Famous and well-known brands besides most of
furniture producers and suppliers pin their marketing and sales strategy in running showrooms or
shops in Yaftabad Bazaar, particularly in the main malls.
Delavaran Bazar is located in Delavaran Street in east of Tehran where numerous single retail
stores are lined on both sides of the street. However there is no luxuries mall there, and thus
Delavaran products are relatively ranked lower in price and quality than the ones in Yaftabad and
consequently considerable share of Delavaran bazar is supplied by small and micro producers.
Hasanabad Bazar, as suggested by its name, is located in Hasanbad Street, an old business area
in Tehran. In contrast to Yaftabad and Delevaran bazars, Hasanabad targets office furniture
market. There is no modern shopping center in Hasanabad bazar however among ordinary old-
style shops there are many showrooms and stores offering high quality and branded office
furniture products.
Tabriz Permanent Furniture Exhibition, is an under-construction project in the north west of
Iran, with the total area of 43 hectares allocated to permanent exhibitions specifically for
furniture, shoes and automobile. Tabriz exhibition is aimed at strategically meeting the domestic
market needs and export goals. Currently 15 large producers and 250 permanent furniture
exhibition booths are running in an area of 2500 square meters and the rest of the project is under
construction.
Final Points
I hope this article could shed light on major aspects of current Iran furniture market. Furthermore
I welcome all questions or comments about the content of the article as well as requests on
conducting SWOT analysis, Market analysis, Value Chain analysis to design market entry
strategy or positioning. Also if you are interested in commercial tours for Iran furniture market,
I’d be glad to be of any help.
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