Home furnishings – Newspaper Kommersant No. 32 (7477) of 02/21/2023

Due to European sanctions on the import of furniture from the Russian Federation to the EU countries, Russian manufacturers lost about 18 billion rubles over the year. In general, exports of these products fell by almost 40%, and their imports to the Russian market decreased by the same amount due to problems with logistics. Calculations of industry companies for the export of furniture to neighboring countries have not yet materialized due to low volumes. Now they are looking for new channels in the Middle East and North Africa.

At the end of 2022, the volume of furniture exports from Russia fell by 39% year-on-year, to 29.5 billion rubles, calculated for Kommersant in the Association of Furniture and Wood Processing Industry Enterprises (AMDPR). As a result, Russian furniture makers lost a total of about 18 billion rubles last year from the reduction in exports of products abroad, says Alexander Shestakov, president of AMDPR and general director of Pervaya Mebelnaya. If in 2021 Russia exported about 16% of all furniture produced, then last year it was half as much, the association points out.

The statistics of total export earnings were largely negatively affected by the curtailment of the Swedish IKEA of its Russian business, as the company exported a significant part of the finished products manufactured in the Russian Federation, according to AMDPR. In 2019, Patrick Anthony, Chairman of the Board of Directors of Ingka Group of Companies (which includes IKEA) in the Russian Federation, told the Prime agency that the company accounted for about 25% of the country’s total furniture exports.

However, the main reason for the significant reduction was the closure of European markets for Russian furniture companies since last spring due to sanctions imposed by the EU on the import of these products from the Russian Federation. Manufacturers tried to reorient themselves to neighboring countries – Kazakhstan, Uzbekistan, Azerbaijan and other CIS countries, the AMDPR notes. But judging by the final statistics, exports to these countries have not yet compensated for the closure of the EU market.

Market participants claim that they will continue to increase exports to neighboring countries. Divan.ru founder Anton Makarov says that the company is already working with traders in Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan and plans to export to Mongolia, Georgia and Armenia. Mikhail Burmistrov, General Director of Infoline-Analytics, believes that in the current situation, it is promising to export furniture to a number of CIS countries, where housing commissioning and the consumer market as a whole are growing.

Mr. Shestakov believes that furniture from the Russian Federation may be in demand in the countries of the Middle East, North Africa and China. In particular, Mr.Doors, according to the chairman of the board of directors Maxim Valetsky, is considering the possibility of sending products to Turkey and the countries of the Persian Gulf. But these markets have their own peculiarities associated with the habits of consumers in choosing furniture, which are not in Russia or Europe, warns Leila Pavlova, partner at the Between2countries consulting agency.

At the same time, according to AMDPR, in 2022 furniture imports to the Russian Federation also decreased by 44% year-on-year, to 103.4 billion rubles. At the same time, the share of European furniture (the Russian Federation did not impose retaliatory sanctions) in the structure of imports fell from 50% to 30%. The volume of supplies from countries that supported anti-Russian sanctions amounted to 30 billion rubles, furniture was imported mainly from Italy, Germany, Spain and Romania.

Mikhail Burmistrov believes that imports of furniture from the EU decreased due to higher logistics costs and currency fluctuations in the second quarter of 2022. In addition, European furniture is mainly represented in the middle and high price segments, which are most affected by the decline in demand, the expert points out. According to Infoline, in 2022, the capacity of the home furniture market decreased by 18–20%, to RUB 500 billion. year by year. The share of imports from Europe will continue to decline in 2023 amid continued difficulties with the import of products and the weakening of the ruble, Mr. Burmistrov believes.

At the same time, according to AMDPR, the share of Chinese and Belarusian furniture supplied to Russia in 2022 increased to 70%. Belarus was rather forced to reorient itself to the Russian market due to the closure of the possibility of exporting to Europe, Anton Makarov believes. Mr. Walecki does not expect an increase in furniture exports from China due to logistics costs for manufacturers and the inability to cover the entire country.

Alina Savitskaya