The retail value of the Asia Pacific (APAC) home furnishing market reached USD 173.5 billion in 2020 and is expected to grow to over USD 266 billion by 2025, according to Euromonitor International. The largest sub-category, indoor furniture, will be worth over USD 102 billion, accounting for over 58% of the total market. The total APAC market is still very fragmented, with market share of the top three players, Nitori, IKEA and Signify, all holding below six per cent each. But an increase in demand in APAC is expected with a growing middle class and many young adults establishing their first homes.

Business Sweden have identified five key market and design trends in APAC that Swedish companies should consider:

  • Rising eCommerce, but physical stores remain important
  • Multi-functional and minimalistic solutions
  • Sustainable materials and healthy homes
  • Scandinavian design on the rising
  • Re-open office spaces and new ways of working
Rising eCommerce, but physical stores remain important

As the pandemic required people to minimise face-to-face interactions and in-person shopping, eCommerce played an increasingly significant role and share in sales and distribution models within the APAC home furnishing market. This is expected to continue post-pandemic, although companies will need to adopt different strategies for each country. Physical stores were, and will be, embraced as the first point of contact where customers experience products and get the “look and feel”, while eCommerce is where competitive prices can be found. This dual offering means there is a greater need for differentiation in customer services.

Multi-functional and minimalistic solutions

For many urban dwellers in APAC cities, upsizing to a larger home is not possible, so they need to have smart and functional home interiors so their homes can meet the demands of multi-purpose use. Multi-functional furniture, such as folding desks, multi-purpose tables, modern sofa beds, outdoor furniture with the functionality of indoor furniture, are a few examples. Multi-functional and transformer furniture is forecast to increase in sales in the coming years, and there is an opportunity for brands to ride this wave is if they can change the stereotypical and outdated view that transformer furniture is not durable and convenient.

Sustainable materials and healthy homes

Sustainability is a global trend and post-pandemic, healthy homes and sustainable materials will be key for consumers in APAC. The trend suggests there will be a greater interest in green and eco-friendly products, with consumers showing signs of becoming more conscious about the sustainability of products rather than just prices. Across APAC, there has also been an increase in awareness about sanitation, cleanliness, and hygiene. This will increase the demand for anti-bacterial or low or no VOC (Volatile organic compounds) emissions materials. For example, consumers show a preference for hardwood flooring over vinyl, cotton fabrics over polyester for curtains, and even plants with air-purifying capabilities.

Scandinavian design on the rising

APAC consumers overall highly appreciate the Nordic furnishing and style. IKEA is well-established and one of the leading home interior brands in the region, providing Swedish design and materials. Scandinavian style is often associated with minimalism and this is aligned with many traditional APAC styles and preferences. Japandi, a design trend with a mix of Japanese and Scandinavian style is one example of how local adaption has taken roots. The European and Nordic ’Cottage Core’ is also popular, incorporating a countryside feel in an urban environment. In addition, there is an emergence of smaller Nordic design focused stores, offering furniture and ornaments inspired by the art of cosiness.

Re-open office spaces and new ways of working

The pandemic naturally saw a rise in home office furniture purchases in APAC but this is now slowing down and there is expected to be an ongoing drop in demand over the coming years as Asia opens up and establishes ’a new normal’. Asia is expected to follow a different path to Europe with a return to full-time office-based work predicted to be the norm. With a revival of going back to office, there will be new demands for office furniture and office spaces to suit a post-pandemic workplace. Privacy furniture and possibilities to keep up with the “digi-physical” way of working will be necessary. Post-Covid-19 offices will need a balance of concentration, collaboration, and well-being focus as well as sanitation measures to reclaim itself as an essential place for employees, clients, and visitors to connect safely.

How to enter and expand into the APAC home interior market
  1. Choose your partner, don’t get chosen: The pandemic has shown the increased importance on finding a good partner. The past year, local APAC players have teamed up with foreign companies to innovate and create both new products and services. Business Sweden can help identify and connect with suitable local partners and support your endeavour with local market knowledge and networks.  
  2. Understand unique sales and distribution models in APAC: While eCommerce has become and will remain a significant sales channel in APAC, physical stores still play a critical role in customer engagement. Business Sweden can help you identify the best models and establish local offices with our BI&O services.
  3. Know selling and importing regulations: Regulations and recommendations, such as safety marks, vary across APAC countries. Business Sweden can deep-dive into specific market conditions to ensure Swedish companies know and can meet the local regulations. Our export professionals, both in Sweden and our local Asian offices, have in-depth knowledge that can help Swedish companies tailor their strategies.

To start your APAC journey or to expand your presence in the region, our teams across the region can help – contact our teams for market analysis, local partner set-up advice, and BI&O services.