How can SB-design square, Index Furniture and Modernform survive after Ikea, a global leader, enters the market competition? Currently, four key players dominate the furniture market: Index, SB Design, Modernform and Ikea. Ikea is a Swedish enterprise. It entered the market at the end of 2011. It made the market competition fiercer by bringing superior design and technology. Ikea has come to change the competitive landscape of the Thai furniture market by making Thai furniture companies not only compete on price but also on design.

1. Canvassco is a market research and business consulting team spin-off
from a large European MNC. We support Local and Multinational
Companies (MNCs) to enter, develop and accelerate their business
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ESTIMATED MARKET SIZE FOR THE
FURNITURE MARKET IN THAILAND
TOP 4 PLAYERS
SALES IN 2012 (THB)
Index living Mall
7,547
SB Furniture
3,514
MARKET SHARE
1 %
FY 2012
26%
Millions
THB 64 Billion
74%
Millions
Small and mid-size companies
Top 4 Market Leaders
Remark: the market size is estimated based on the
annual income of registered companies reported
under furniture industry. The figure exclude the
production for an export market.
Modernform
Source: Canvassco Thailand Analysis
IKEA
2,784
2,665
FACTORS INFLUENCING CUSTOMERS' FURNITURE CHOICE
Millions
Millions
KEY PURCHASING INTENTIONS
Quality
I'll buy furniture if the store
provides delivery services
Utilization or Function
The Size That is Suitable For Space
Life Long Durability
Warranty
I like cheaper furniture only if
it meet quality requirements
Comfort
Ease of Cleaning
Materials
Design
Price
Ease of Maintanance
Matching With Other Items
Fast Services
After Sales Services
Personal Care for Customers
Service and Installation
Colour
I like store that I can buy
various furniture
I go to store to get information
on furniture for new idea
Shop atmosphere influences
me to buy furniture
Location of the Store
Brand
Important
Quite Important
Critically Important
Top 5 purchasing intentions based on research conducted in 2012
using online survey. Sample size is 114 Thai consumers
Source: Thanyamon Sakpichaisakul, (http://dspace.wul.waseda.ac.jp/dspace/bitstream/2065/38112/1/ShokenShuron_2012_9_Thanyamon.pdf)
© Canvassco 2014
For more information please contact godchapan@canvassco.com

2. Canvassco is a market research and business consulting team spin-off
from a large European MNC. We support Local and Multinational
Companies (MNCs) to enter, develop and accelerate their business
activities in South East Asia. For more informaiton visit our website
www.canvassco.com or send us an email at contact@canvassco.com
How
can
S B-­‐design
square,
Index
Furniture
and
Modernform
survive
a<er
Ikea,
a
global
leader,
enters
the
market
compeBBon?
Currently,
four
key
players
dominate
the
furniture
market:
Index,
S B
Design,
Modernform
and
Ikea.
Ikea
is
a
Swedish
enterprise.
It
entered
the
market
at
the
end
of
2011.
It
made
the
market
compeCCon
fiercer
by
bringing
superior
design
and
technology.
Ikea
has
come
to
change
the
compeCCve
landscape
of
the
Thai
furniture
market
by
making
Thai
furniture
companies
not
only
compete
on
price
but
also
on
design.
From
our
esCmaCon,
the
market
size
is
at
64
Billion
Thai
Baht
with
almost
2,000
companies
in
the
furniture
market
value
chain.
Index,
a
Thai
furniture
producer,
began
as
a
small
company
under
the
“Crown”
brand
in
1973.
It
later
became
known
as
the
“Winner”
brand,
which
is
now
the
market
leader
with
12%
of
the
total
market
share
and
over
29
branches
including
18
stand
alones
and
11
showrooms.
SB
Design
Square
started
as
a
small
furniture
store
in
1973
under
the
name
“Shaw
Brothers
Furniture”.
It
now
has
41
stores;
9
stand
alones;
15
showrooms
and
17
branches
joint
with
Home
Pro
possesses
6%
of
the
total
market
share.
Modernform,
started
as
a
manufacturer
of
‘knock
down’
furniture
in
1964.
It
later
expanded
into
office
furniture
and
now
has
11
showrooms
including
some
private
dealers.
It
captures
4%
of
the
total
market
share.
Ikea
entered
the
Thai
market
2
years
ago
and
it
has
already
penetrated
into
4%
of
the
total
Thai
furniture
market.
In
total,
the
top
four
leaders
dominate
only
26%
of
the
total
market
share.
This
shows
that
the
market
is
very
fragmented.
© Canvassco 2014
Ikea
in
Thailand
is
the
biggest
Ikea
store
in
Southeast
Asia.
It
does
not
use
the
tradiConal
TV
adverCsing
methods,
however.
It
has
chosen
to
market
itself
by
sending
free
catalogues
to
target
customers,
totaling
over
a
million
catalogues
sent.
This
technique
has
proven
very
successful.
Their
orders
have
exceeded
expectaCons
in
2012
by
exceeding
the
37%
target
sales
goal.
Ikea
is
trying
to
overcome
the
challenges
of
the
Thai
furniture
market
by
focusing
on
safety
and
small
space
design.
Thus,
allowing
customizaCon
of
products
that
allows
the
customer
to
ulCmately
design
their
own
furniture
to
fit
their
room
size
and
space.
Ikea
is
trying
to
compensate
for
its
weaknesses
in
delivery
and
assembly
by
giving
these
services
to
customers
free
of
charge.
Ikea
is
markeCng
to
the
shopper
by
creaCng
an
appealing
shopping
environment
including
a
cozy
and
comfortable
Restaurant
and
Food
kiosk
in
the
store.
It
is
also
making
the
market
fiercer
by
offering
a
discounted
price
promoCon
twice
a
week.
Ikea
is
now
beginning
to
penetrate
the
mass
market
by
adverCsing
itself
more
oaen
on
T Vs.
Index
has
started
to
enjoy
big
growth
since
2010
with
the
“Joy
Price
Campaign”
and
then
with
the
“Joy
Design
&
Joy
Quality”
campaign.
They
began
to
segment
the
target
customers
into
4
categories:
Mix
and
Match,
RomanCc
SensaCon,
Italian
Modern,
and
TradiConal
Elegant.
Index
gained
more
than
50%
of
its
sales
from
new
property
projects
(new
condominiums
and
housing
projects)
aaer
introducing
white-­‐furniture
design.
For more information please contact godchapan@canvassco.com

3. Canvassco is a market research and business consulting team spin-off
from a large European MNC. We support Local and Multinational
Companies (MNCs) to enter, develop and accelerate their business
activities in South East Asia. For more informaiton visit our website
www.canvassco.com or send us an email at contact@canvassco.com
The
white-­‐furniture
line
of
Index
grew
over
100%
and
created
a
boom
in
the
market.
Index
plans
to
grow
more
than
10%
a?er
introducing
free
3-­‐D
Room
displays
that
allow
customers
to
design
their
room
and
furniture
layout
on
a
computer.
Index
is
also
trying
to
capture
the
emerging
market
of
built-­‐in
segmenDng
by
making
built-­‐in
furniture
at
reasonable
prices.
Index
is
expanding
their
up-­‐country
coverage
aggressively
as
a
defense
strategy
against
Ikea.
They
are
also
infiltraDng
community
malls
in
Bangkok.
Index
is
trying
to
use
the
community
mall
shopping
concept
to
compete
with
the
cozy
comfort-­‐shopping
atmosphere
of
Ikea’s
single
store
in
Bangkok.
Index
is
now
using
limited
ediDon
&
exclusive
design
campaign;
running
monthly
as
another
strategy
to
catch
shopper
aKenDon.
SB-­‐Design,
the
first
furniture
maker
to
introduce
knock-­‐down
furniture,
is
now
enjoying
a
growth
in
revenue
a?er
introducing
the
3D-­‐Pro
Designer,
which
provides
customers
with
a
design
advisor
to
match
the
customer’s
budget
and
preferences.
This
opDon
is
called
the
“ Total
SoluDon”
service.
They
claim
that
over
50%
of
customers
come
back
to
buy
S B-­‐Design
furniture
a?er
geSng
the
Total
SoluDon
service.
S B-­‐Design
aims
to
have
over
a
10%
total
growth
a?er
introducing
“Total
soluDon”
campaign.
Although
Ikea
has
the
design
advantage
over
SB-­‐Design,
S B-­‐Design
is
trying
to
catch
the
niche
market
by
matching
the
customer’s
unique
style
like
vintage,
classic,
modern
and
many
more
segments
that
Ikea
doesn’t
idenDfy
as
clearly
with.
Currently,
S B-­‐Design
is
© Canvassco 2014
beginning
a
new
campaign
called,
“Condo
fit”.
It
targets
condominium
projects
by
introducing
funcDonal
furniture
in
limited
areas
and
small
spaces
at
reasonable
prices.
Modernform
is
the
premium
furniture
market
share
leader
with
30%
of
total
premium
market.
However,
it
is
not
well-­‐known
to
the
mass
market
at
all.
It
captures
75%
to
80%
of
the
housing,
condominium
and
office
project
market
and
20%
to
25%
comes
from
the
premium
furniture
market.
Although
they
are
the
premium
furniture
seller
in
Thailand,
they
seldom
adverDse
and
do
markeDng
acDviDes.
This
has
started
to
lose
them
market
shares
to
SB-­‐Design
and
Index
once
these
compeDtors
entered
the
housing
and
condominium
market.
Therefore,
Modernform
expanded
into
the
hospital
furniture
market
and
now
they
have
gained
more
than
5%
of
the
total
market.
As
for
the
mass
market,
while
S B-­‐Design
and
Index
have
been
compeDng
harshly
in
the
indoor
furnishing
market,
Modernform
has
chosen
to
focus
on
outdoor
products,
as
customers
are
focusing
more
on
outdoor
living,
thus,
avoiding
the
fierce
indoor
furnishing
market
with
the
Big
3
compeDtors.
The
current
potenDal
buyers
are
younger
generaDon
who
starts
to
have
their
own
residences.
Quality;
store
environment;
various
product;
and
salesperson
are
the
most
important
influencing
factor
for
making
decision
when
buying
furniture.
The
store
atmosphere
was
the
second
most
significant
factor
influencing
furniture
purchase
decision.
Therefore,
the
store
should
display
furniture
arrangement
in
an
enjoyment
environment
to
For more information please contact godchapan@canvassco.com

4. Canvassco is a market research and business consulting team spin-off
from a large European MNC. We support Local and Multinational
Companies (MNCs) to enter, develop and accelerate their business
activities in South East Asia. For more informaiton visit our website
www.canvassco.com or send us an email at contact@canvassco.com
persuade
customer
in
making
decision.
Moreover,
various
furniture
design
and
mul7-­‐
types
func7on
with
mul7ple
price
range
of
furniture
products
are
require
to
respond
to
various
customers’
needs.
The
research
survey
shows
that
famous
celebrity
adver7sing
are
not
effec7ng
on
purchase
decision
at
all.
However,
salesperson
is
the
strong
influencer.
Therefore,
the
staff
should
be
well-­‐trained
on
the
product
informa7on.
The
loca7on
distance
is
not
a
key
factor
for
a
customer
at
all
as
long
as
the
stores
provide
reasonable
delivery
price.
However,
the
stores
need
to
provide
a
full
service
facili7es
such
as
food
corner,
playground
and
available
parking
lot;
and
if
the
furniture
store
located
in
the
area
where
restaurants
and
supermarkets
are
located.
This
would
be
the
advantage
to
the
furniture
sellers.
In
conclusion,
even
though
the
Thai
furniture
market
is
geEng
fiercer
from
the
entry
of
big
players
like
Ikea,
the
compe77ve
landscape
is
shiGing
towards
a
focus
on
design.
This
shiG
has
introduced
new
design
techniques
and
trends.
This
shiG
has
increased
consumer
awareness
on
furniture
products.
The
Thai
furniture
market
is
expected
to
grow
10%
in
the
future
due
to
the
increasing
consumer
income
and
the
growing
property
market.
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