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The home and household sector will touch around $237 billion by 2030 at a compound annual growth rate (CAGR) of over 10%. The growth is fuelled by increasing disposable incomes, shifting consumer preferences and a growing focus on convenience across product categories, a report titled ‘Unlocking Opportunities in India’s Home & Household Market Thought Leadership’ by Deloitte India has said.
The home and household market is witnessing strong demand, particularly in tier 2 and tier 3 cities. High disposable incomes, the rise of digital platforms, easy access to credit, and young consumers going in for home renovations is leading to higher demand, as per the report launched on September 18 during the two-day MAPIC India (formerly IRF) event in Mumbai.
Growth in real estate, home makeovers driving growth within the home and household sector
India’s per capita disposable income touched $2,500 in FY23 marking a 13% growth over last year, driving demand for premium products, the report noted.
The real estate sector is expected to grow at 25% CAGR, reaching around $ 1 trillion by FY29 spurred by the demand for second homes, larger properties, boosting household product sales. Consumers are indulging in their home makeovers faster than before, with the renovation market projected to reach $14.3 billion by 2027, it said.
With more than 50% of buyers considering online platforms, E-commerce, combined with the rise of quick commerce is expected to be a transformative force in the sector, revolutionizing how Indian consumers shop.
Youngsters and elderly renovate homes more frequently
The report noted that new homebuyers are driven by a mix of self-use, investment, and lifestyle enhancement with almost 30% of the total spending made on consumer durables and furniture. For the first home set up, 33% of respondents spend over ₹50 lakh reflecting their higher income levels and property value.
The report noted that younger and elderly age groups show a higher renovation frequency, primarily in bedrooms and living rooms, with most sticking to a budget under ₹5 lakh, while middle-aged homeowners are more budget conscious. Almost 50% respondents indicated a higher frequency of renovation within less than five years for bedrooms and living rooms versus other rooms.
Hybrid work culture leading to higher spends on home renovation
With almost 47% of respondents spending more than 12 hours at home, there is greater focus on personalized and comfortable living spaces. The surge in hybrid work has led to nearly half of respondents spending over 12 hours at home, with a significant focus on work-from-home, driving demand for ergonomic office setups like furniture and headsets, the report noted.
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The report noted that the interior services sector is expected to grow at 18% CAGR and is projected to touch $7 billion by FY30. The sector has few organized players across mass to luxury segment and relies heavily on word-of-mouth and referrals. The organized sector holds 15-20% share of the interior services market while the unorganized sector dominates with 80-85% driven by price sensitive respondents in tier 2 and 3 cities.
The furniture and furnishings sector is expected to grow at over 10% CAGR and is projected to reach $62 billion by FY30.The sector is primarily unorganized, accounting for 80% share, dominated by local players and regional workshops. Local players compete on customization and affordability against branded, ready-made options.
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Amongst key segments, bedroom furniture has the largest share (~49%), followed by seating (23%) and dining (13%) and in the materials category, wooden furniture dominates the market with 65% share (including engineered wood), followed by metal (17% share) and plastic (9% share).
Import of finished products is high as 48% furniture imports comprise of finished products, out of which 28% are beds and 16% are sofas; top countries of import are China, Germany, and Malaysia, the report noted.
Almost 68% respondents replace furniture at least once every five years and almost 34% respondents were willing to spend more than ₹50,000 on furniture highlighting that most consider furniture as long-term investment.
Almost 50% respondents spend less ₹10,000 on furnishings, indicating it to be a low spend category. Key reason for replacement is obsolescence with 39% respondents stating that the product or style became outdated, it showed.
Almost 50% respondents preferred standalone specialty retailers and multi-category home retailers for both furniture and furnishings. Least preference was for online channels, particularly for furniture due to high ticket size and product longevity requiring close check on durability and aesthetic appeal, the report noted.
Demand for furniture rentals growing among professionals
The report also noted that the demand for rented residential furniture growing particularly amongst well-to-do professionals and expats who frequently change locations
The report said that the bath and kitchen fittings sector is expected to grow at 16% CAGR and is projected to reach $39 Bn by FY30. The sector is moderately organized, with urban markets more structured than rural.
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The décor and lighting sector is expected to grow at 8% CAGR and is projected to reach $4 billion by FY30. Within lighting, LED segment dominates with 80% share while decorative lighting accounts for 20% share.
The home safety sector is expected to grow at 11% CAGR and is projected to touch $4 billion by FY30. This segment is mostly unorganized with a focus on traditional solutions. Limited penetration of smart safety products presents growth potential which has already started picking up in urban centres, it said.
The homecare sector is expected to grow at 5% CAGR and is projected to touch $12 billion by FY30. The organized sector dominates the homecare market with 60% share, driven by rising demand for branded and high-quality hygiene products. Key segments by application type are laundry care, having the largest share (~55%) followed by surface cleaners (~12%), toilet care (~10%), pest control (~10%), dishwashing (8%) and air care (5%), the report added.
