Market Overview:
Online home decor market includes products related to home furnishings such as furniture, textiles, floor coverings, wall decor, kitchen and bathroom fittings, and lighting that are sold online through e-commerce platforms. Online platforms provide 24/7 availability of a wide variety of products, easy price comparison, hassle-free delivery and returns. This has made online shopping a popular choice for buying home decor items.
The online home decor market is estimated to be valued at US$ 97.39 Bn in 2023 and is expected to exhibit a CAGR of 11.% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
Customization is a major trend gaining popularity in the online home decor market. Websites now allow customers to customize products as per their specification by selecting size, color, material and other design aspects. This is driving demand as customers want furniture, kitchenware, lighting and other decor items tailored to their individual taste and space requirements. Features like 3D room planners and augmented reality tools also help visualize how customized products will look in real home settings. Customization deepens customer engagement and loyalty towards particular brands while also meeting unique preferences. This emerging trend is expected to fuel market growth over the forecast period.
Porter’s Analysis
Threat of new entrants: The online home decor market has moderate barriers for new entrants due to high infrastructure and logistics costs. However, new online entrants can leverage social media platforms to promote their brands and penetrate the market.
Bargaining power of buyers: Buyers in the online home decor market have high bargaining power due to the availability of a variety of options from different retailers. Buyers can easily compare prices and switch to alternatives.
Bargaining power of suppliers: Material suppliers have moderate bargaining power as dominant retailers can source raw materials from multiple suppliers globally. However, suppliers of exclusive and niche home decor products possess some bargaining power.
Threat of new substitutes: Substitutes like renting/leasing decorative items and pre-owned home decor pose a minimal threat due to product differentiation and customer brand loyalty for established players.
Competitive rivalry: The market is highly competitive with the presence of major players and private labels.
SWOT Analysis
Strengths: Large players like Amazon, Walmart and Wayfair have massive logistics and supply chains enhancing convenience. Established brands like IKEA are synonymous with affordable home decor.
Weaknesses: Smaller players have limited budgets restricting geographical reach. Maintaining exclusive new designs involves substantial R&D costs.
Opportunities: Growing global urban population and rise of nuclear families increases demand. Customers preferring personalized/customizable decor expand addressable market.
Threats: Macroeconomic downturns and rising inflation could hamper discretionary spending. Strict environmental regulations may impact raw material sourcing.
Key Takeaways
The global online home decor market is expected to witness high growth, exhibiting CAGR of 11% over the forecast period, due to increasing digitalization and preference for online shopping among consumers for conveniently procuring decorative furniture and items from the comfort of their homes.
Regionally, North America dominated the global market in 2023 with a share of over 35%, with the US contributing majority of demand. However, Asia Pacific is anticipated to register fastest CAGR through 2030 on the back of rising affluence, expanding middle class and surge in e-commerce adoption in densely populated countries like China and India.
Key players operating in the online home decor market are Amazon, Bed Bath & Beyond, Walmart, Wayfair, IKEA, Overstock.com, Target, Home Depot, Williams-Sonoma, Lowe’s, Etsy, eBay, HomeGoods, JCPenney, Kohl’s, Macy’s, Pier 1 Imports, Crate and Barrel, At Home Stores, and Restoration Hardware. Major players are focusing on mergers and acquisitions to strengthen their product portfolio and market position. For instance, in 2022, Walmart acquired home goods subscription service Lovevery to bolster its presence in the curated home
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