(MUST READ) Things you need to know before investing in furniture-related stocks

As we are moving into a new “endemic” era in 2022, investors must prepare themselves against the shift of spending behaviour – especially if you are keen on investing in high-yield furniture themed stocks. The report also highlighted that the United States demand for furniture is expected to reach $67.7 billion in 2025, which is growing at a CAGR of 2.7% from $59.3 billion in 2020.

I’d love to share with you a research done by Freedonia Focus Reports, which highlighted some key changes in consumer spending habit in 2022.

1. Despite the demand for furniture had dipped in 2020, we had noticed a very strong rebound of orders, which are represented by backlog orders on furniture players in Malaysia market. But beyond Malaysia, we also see many remote workers are currently adapting a work-from-home trend, or at least on a rotational basis, which would drive the demand for home offices, as well as revamping their living spaces. Moreover, more outdoor furniture are in demand as the market is shifting more social activities towards outdoor in 2021 and beyond.
    
2. Even before COVID-19, the furniture industry had already been trending towards e-commerce space, and in United States, they call it the “Amazon effect”. The retail market had shifted more and more towards online purchases due to the convenience nature of it.
    
3. Sustainability has also became an important topic across many different industries, and of course furniture is of no exception. Moving forward, furniture made of recycled materials or more sustainable woods such as acacia (eucalyptus acaciiformis), bamboo, or reclaimed wood are more welcomed in the current market. There are also increased demand for wood furniture made of salvaged materials, and these materials are commonly certified by the Forest Stewardship Council.
    
4. As we mentioned above, remote work is becoming more and more common and as technology has evolved, employees are no longer tied to their office desks, hence there will be a shift for workplace designs as well as newly emerged demand for office furniture. For example, there will be new demand for allocation of workstations instead of assigned seats. This could help a fluctuating workforce and accommodate for increasing number of remote workers.
    
5. As a matter of fact, currently there are approximately 40% of United States adults are obese, which had increased sharply from 15% in 1990. The increased obesity levels would have an impact on furniture designs especially on chairs. The report also suggests that historically, office chair is designed to hold up to 300 pounds and bariatric chairs can hold as much as 600 pounds.

https://blog.marketresearch.com/4-key-trends-to-watch-in-the-furniture-industry-for-2020-and-beyond

In conclusion, the furniture market is still expected to grow despite external headwinds as mentioned by the media. Apart from office-based furniture makers will be the hidden champions, raw material, or we should say up and midstream players such as MEICO, HEVEA and SERNKOU will be benefited from the trend. What’s more interesting is we had noticed SERNKOU has plans to venture into sustainable forestry, and based on some channel checks, it appears that they may be going into planting of eucalyptus trees. We shall wait for more details on this to be made known. In any case, SERNKOU is likely to be one of the pioneer in the furniture industry to start moving into more sustainable woods.

Hence, we’d pick SERNKOU as our top picks in the furniture industry, for 2022.