The FINANCIAL — The main challenge for furniture producers in Georgia is producing high quality furniture at affordable prices, according to industry representatives. The reason for this is that the sales volume in Georgia is still low and furniture stores are preventing them from selling very expensive products, they say.
Another challenge is that Georgian customers are not loyal to local production and prefer to buy imported furniture wherever possible.
There are 274 furniture companies registered in the Georgian Yellow Pages. Some of them produce furniture and some import it. Industry representatives would divide the Georgian furniture market into four segments. The first segment is made up of customers who are oriented toward low prices. Such furniture is mainly second-hand or produced in workshops. The second segment is made up of low-income customers, buying furniture with small savings. And the third segment is made up of those purchasers who are not rich but have enough funds to buy high quality furniture. They make up 60 percent of the market and this segment of customers can afford furniture priced between GEL 700 and GEL 2 500. And of course there is the segment of customers who go for luxury furniture for which prices start from GEL 2,000.
A few years ago representatives of furniture stores in Georgia claimed that sales had been declining steadily. It seems that the sales statistics have not improved yet, as the representatives of furniture stores say they have not seen any significant changes in their sales revenues so far.
“The situation on the market has not improved significantly. Market growth depends on the country’s economic growth. Also, it would be very helpful to finally finish all the constructions,” said Giorgi Dabrundashvili, the Marketing Manager at Embawood. “The main challenge for Embawood is producing high quality furniture at an affordable price and we adroitly do it successfully, I think. Georgian customers should be loyal to Georgian products, no matter whether it is furniture or something else. In most cases furniture produced in China or in Turkey is more expensive and of lower quality than furniture produced in Georgia, but unfortunately Georgian customers often cannot tell the difference,” he added.
When buying furniture Georgian customers actively use different types of mortgages. “20-30 percent of customers use a mortgage when buying furniture at Embawood. Customers are interested in 0 percent mortgages,” said Dabrundashvili.
The autumn and New Year period is the most active in terms of sales.
10,087.9 tonnes of furniture was imported in Georgia from January-June 2013 to a total value of USD 26,605.9 thousand, according to Geostat. 1,974.0 tonnes of furniture to a total value of USD 3,580.6 thousand was exported during this period.
Last year the import of furniture equalled 23,539.3 tonnes to a total value of USD 65,154.9 thousand, while the export of furniture came to 6,430.5 tonnes to a total value of USD 9,659.3 thousand.
This year there are 57 main importers of furniture in Georgia. The first ten importers are LTD Visti, LTD Senator Pantsi, LTD Belux, LTD Retro 2009, LTD Golbi, LTD GMT Mtatsminda, JSC Dizon Limited, Spanish Retail Georgia, Offie 1 and Galanti.
As for the exporters, there are 19 exporter companies so far, they include Embawood Georgia, Nukri Iremashvili, Belux, Aria, Tbilisi City, Art Line Studio, “eqif hali fazarlama sanai ve tijaretis”, “filiali saqartvelosi”, Solari+, SAS and Chakirtrans.
“Embawood is targeting the middle and premium customer segment. Accordingly the prices are acceptable for the broad masses. Recently our competitors have been forced to reduce prices. Therefore I would not say that there are high prices on the furniture market in Georgia. Of course, there are luxury stores operating where the prices still remain high. In general furniture should suit a room’s interior, which is why Embawood offers a wide range of different colours of furniture, allowing all customers to find their preferred one in our stores. However, the most popular furniture is of simple colours and modern design,” Dabrundashvili added.
Italian furniture is very popular in Georgia, but customers are often not given the right information about where furniture is imported from in reality, Dabrundashvili thinks. “For example, some stores tell customers that their furniture is Belgian when in actuality it was made in China. Customers are thus being deceived. Their rights are not being properly protected, no one is punished for giving false information to customers,” he said.
“We have exclusive offers in the field of furniture production, which ensures that we have no competitors on the market,” said Tamta Mugasashvili, the Marketing Manager at Saba and Company. “We import furniture from Italy, France and Germany. These countries are legislators in furniture production worldwide. The brands with whom Saba cooperates produce eco-friendly furniture. These collections are created by world famous architects and designers, which offer novelties in accordance with the requests of the modern era. The prices are affordable for those customers who want to buy quality products. As the product that Saba offers is exclusive, we therefore set exclusive prices taking our customers’ solvency into consideration. The bestselling items at Saba and Company are kitchen furniture,” she added.
“Despite the severe social disruption in Georgia, I am seeing positive tendencies on the furniture market. There is a lack of good quality. In spite of the fact that there are many players on the market, I would not say that it somehow improves the quality of the furniture. As soon as customers overcome their first impressions, they start thinking about durable, quality and eco-friendly furniture. However, the Georgian market generally lacks such kinds of products,” she said.
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