суббота, 16 января 2021
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The battle of the tables

Despite the growth of imports, domestic furniture producers have yet to lose the hope of winning back half of the domestic market.

Akzhol Sadeshov

All of the world, including in Kazakhstan, development of the furniture market serves as an indicator for both business development and growth in the welfare of ordinary citizens. At present, however, this role in Kazakhstan as an “indicator” is held primarily by foreign furniture producers.
Domestic producers of furniture, as it turns out, are not ready to face strong pressure from imports, and have started gradually conceding market share they had acquired domestically. Meanwhile, according to an estimate by the Association of Furniture and Woodworking Industry Enterprises of the Republic of Kazakhstan (AFWIE), the furniture industry is quite attractive. Annual growth rate is about 35%, and last year the total volume of the market comprised US$590 mln. The share held by domestically produced furniture was about 30%, or US$170 mln.
According to Mikhail Glukhov, president of the AFWIE, “The share of the market held by illegally operating domestic furniture producers is increasing. As per official statistical data, the growth rate in furniture production within Kazakhstan has been decreasing: in 2003, the growth rate was 41%, in 2004 – 28%, and in 2005 – 14%. This is despite the fact that the import of raw materials and parts increased by 50% on average per year over the same period.”
The import of furniture in 2005 increased by 35%. Last year, the dynamic of furniture imports was characterized by a high growth rate, particularly from China (by 240%) and CIS countries (Russia – by 61.3%, Belarus – by 78.5%, and Ukraine – by 33%). At the same time, there were decreases in supply from Poland (by 21%) and Italy (by 19.2%). Overall, 50% of furniture is imported from CIS countries, which is due in part to the lack of import tariffs, as well as the fact that furniture producers in the CIS, especially in Russia and Belarus, have managed during these years since independence to establish modern production for the manufacture of competitive furniture.
Trends show noticeable growth of imports from China. Last year, Chinese furniture producers took second place, after Russia, as regards imports into Kazakhstan, outdoing their competitors from Poland and Italy.

Order Desk
The domestic furniture market is mostly represented by small and medium-sized enterprises (SMEs). At the same time, the southern capital of Almaty contains 50% of the country’s total production, and accounts for 37% of all imports, due to quickly growing demand. Consequently, the most significant players on the market are also based in Almaty. Included are ZETA, USKO, the Almaty Furniture Factory, Folding Space, Heaven House (mostly representing the production of their plant in Pavlodar oblast), and many others.
Most industry players are oriented toward the production of furniture for offices, but at the same time they have offerings for the home as well. Selling to individual clients prevails with regards to sales methodology, though mass production does exist as well.
Many large companies have been operating on the market here for ten years or more. Most of them began operations with the import of furniture, only later on gradually starting their own production. This group includes Zhanna, ZETA, USKO and others. According to Mariyash Oralbayeva, a marketing specialist from the furniture department at USKO, “The major channels for the sale of furniture are our own showrooms and stores in different regions. However, we also have sales through local regional trading companies, with whom we cooperate. At present, the most attractive markets in which to sell furniture, especially that for the office, are such rapidly developing cities as Astana, Aktau and Atyrau. Many producers, including us, are already represented in those cities, as well as in others.”
After carrying out research of the regional market, S. Zadorozhni, director of the Fininsait Firm LLP, believes that “if in our

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