ONLINE HOME DECOR MARKET ANALYSIS

The online home decor market size is expected to reach US$ 206.05 billion by 2030, from US$ 97.39 billion in 2023, growing at a CAGR of 11.3% during the forecast period. Online home decor includes products such as furniture, textiles, decorative accessories, and more that are purchased online for residential or commercial spaces. The growth is driven by rising disposable incomes, growth of the real estate sector, and increasing penetration of online shopping. The online home decor market is segmented by product type, price range, distribution channel, end user, material type, and region. By product type, the furniture segment is expected to dominate the market during the forecast period due to growing demand for customized and modular furniture.

Online Home Decor Market Regional Insights

• North America: North America is the largest online home decor market, accounting for over 39% of global revenue. The market is driven by a number of factors, including a growing middle class, increasing disposable income, and the rise of e-commerce.
• Europe: Europe is the second largest online home decor market, accounting for over 25% of global revenue. The market is driven by similar factors to North America, as well as a strong focus on sustainability and eco-friendly products.
• Asia Pacific: Asia Pacific is the fastest-growing online home decor market, with growth projected to outpace other regions in the coming years. The market growth is driven by a number of factors, including rising incomes, urbanization, and the growing popularity of online shopping.

Figure 1. Global Online Home Decor Market Share (%), by Region, 2023

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Online Home Decor Market Drivers

• Increasing Internet and Smartphone Penetration: The increasing internet and smartphone penetration, especially in developing regions, is driving the growth of the online home decor market. More consumers are now able to access online shopping platforms. For an instance, as per United Nations Conference on Trade and Development, Alibaba, Amazon, JD.com, and Pinduoduo increased their revenues by 70% between 2019 and 2021, and their share of total sales through all these 13 platforms rose from around 75% in 2018 and 2019 to over 80% in 2020 and 2021.
• Growth of the Real Estate Industry: The growth in residential and commercial real estate construction globally has led to increasing demand for home decoration and furnishing products, which is driving the online home decor market.
• Rise in Disposable Incomes: The rise in middle-class populations and growing disposable incomes in developing regions has led to increased spending on home improvement and décor, contributing to market growth.
• Popularity of Interior Design: The rising popularity and awareness of interior design and decoration is resulting in higher consumer spending on stylish and trendy home décor products.

Online Home Decor Market Opportunities

• Growth Potential in Developing Regions: The largely untapped markets of developing regions like India, Southeast Asia, and Africa present significant growth opportunities for online home decor companies. Rising incomes in these regions are driving demand.
• Customization of Home Decor Products: Providing highly customizable home decor products integrated with technologies like 3D printing and virtual reality can help companies differentiate their offerings in a competitive market.
• Usage of Sustainable Raw Materials: Using recycled and upcycled raw materials like wood, plastic, glass, etc. for manufacturing eco-friendly home decor products caters to environment-conscious consumers.
• Smart Technology Integration: Integrating smart technology like IoT and AI in home decor products such as smart furniture, networked appliances, etc. can open new market segments.

Online Home Decor Market Trends

• Integration of Augmented Reality: Augmented reality is being integrated by online home decor retailers to allow customers to visualize products in their homes before purchase, enhancing user experience.
• Voice Commerce Adoption: Voice assistant devices are enabling seamless voice commerce for online home decor, allowing hands-free shopping to drive higher adoption.
• Personalization of Products: Online retailers are offering personalized home decor products like customized furniture, tailored wall arts, monogrammed textiles, etc. as per individual choices.
• Sustainability Focus: Using organic, recycled, and up cycled materials for manufacturing home decor products caters to rising eco-consciousness among consumers.

Online Home Decor Market Restrains

• High Logistics Cost: The high cost of shipping bulky and fragile home decor products results in high logistics costs for online retailers.
• Lack of Touch and Feel: The inability to physically view or try home decor items like furniture and textiles before purchase restrains some customers.
• Long Product Replacement Time: The long turnaround times for replacing damaged goods act as a roadblock to the growth of online sales.

Analyst View

The online home decor market has tremendous growth opportunities driven by increasing internet and smartphone penetration. More consumers are now comfortable shopping for decor items online as online retailers offer greater convenience and choice. The ability to view high-resolution images and read detailed product descriptions online aids customers in virtual shopping and makes online an attractive purchase channel. Further, multiple payment options and easy return policies have boosted customer confidence in online purchases.

However, not being able to physically see and feel products remains a key restraint for the online home decor market. Many customers still prefer visiting brick-and-mortar stores to choose decor items. Additionally, online merchants struggle with the high shipping costs of bulky items and last-mile deliveries to remote locations. Marketers also find it challenging to build an emotional connection required for decorative purchases without visual merchandising used in stores.

With strong investments to enhance virtual and augmented reality-based shopping experiences, this restraint can be reduced. The online home decor space in Southeast Asia and Latin America is expected to grow the fastest as rising affluence and internet access in these regions drive the market. In contrast, the North American market is relatively mature with heavy offline competition in the home furnishings space.

Overall, the online home decor category has high growth potential but marketers need innovative strategies to overcome the “touch-and-feel” limitations of online shopping for decorative categories.

Recent Developments

New product launches

• In 2022, Pepperfry launched a new range of decorative lighting under its in-house brand Mintwud to expand its home décor category. Pepperfry Limited, formerly known as Pepperfry, is an Indian online marketplace for furniture and home décor.
• In 2021, Urban Ladder revamped its furniture offerings by launching over 1,000 new products across categories of sofas, beds, recliners, etc.
• In 2020, the Sweden-based furniture giant IKEA launched its online shopping platform in Mumbai after opening its first physical retail store in Hyderabad in 2018

Acquisition and partnerships

• In 2022, Flipkart acquired the online furniture retailer ANS Group to strengthen its furniture category ahead of the festive sales
• In 2021, the online furniture brand Urban Ladder announced a strategic partnership with Reliance Retail Ventures to boost its omnichannel presence
• In 2021, Pepperfry partnered with the Switzerland-based furniture brand USM Modular Furniture to retail its premium modular furniture in India

Figure 2. Global Online Home Decor Market Share (%), by Product Type, 2023

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Top Companies in Online Home Decor Market

• Amazon
• Bed Bath & Beyond
• Walmart
• Wayfair
• IKEA
• com
• Target
• Home Depot
• Williams-Sonoma
• Lowe's
• Etsy
• eBay
• HomeGoods
• JCPenney
• Kohl's
• Macy's
• Pier 1 Imports
• Crate & Barrel
• At Home
• Restoration Hardware

Definition: The online home decor market consists of the sales of home furnishings, furniture, home accessories, and decorative items through e-commerce online channels. It excludes offline sales through physical stores. Online platforms like company websites, apps, and marketplaces offer a wide range of decor products for different spaces and rooms including furniture, upholstery, carpets & flooring, lighting, decorative accents, kitchen & dining accessories, bath fittings, textiles, garden accessories, and more. The online distribution channel gives consumers convenience and a wider choice. Market growth is driven by increasing internet penetration, growth in online spending, rise in disposable incomes, and growth of the real estate sector globally.