Source: NBE

One of the primary factors contributing to the potential of Ethiopia’s furniture

industry is the availability of diverse raw materials. The country is endowed
with a variety of wood species such as teak, mahogany, and acacia, which
are highly sought after for furniture production.

Additionally, Ethiopia has an abundance of bamboo, which is increasingly

being recognized as a sustainable and versatile material for furniture
making. The availability of these raw materials provides a competitive
advantage for Ethiopian furniture manufacturers in terms of cost-
effectiveness and product quality.

Furthermore, Ethiopia’s skilled labor force presents a significant opportunity

for the furniture industry. The country has a large pool of artisans and
craftsmen with expertise in traditional woodworking techniques as well as
modern manufacturing processes. This skilled workforce enables the
production of high-quality, handcrafted furniture that appeals to both
domestic and international markets. Moreover, the government’s focus on
vocational training programs aimed at enhancing technical skills further
strengthens the industry’s potential by ensuring a continuous supply of
skilled labor.

Okay, let's analyze the Ethiopian furniture market, drawing parallels with the
vehicle market analysis in the source document.

1. Ethiopian Furniture Market Overview

 Demographics and Housing: Ethiopia's growing population and

urbanization drive demand for furniture, particularly in expanding cities
like Addis Ababa. The increase in residential construction and
commercial spaces fuels the need for furniture.

 Economic Factors: Consumer spending on furniture is influenced by

income levels. As the middle class expands, there's a rising demand for
higher-quality and more diverse furniture styles.

 Cultural Influences: Traditional Ethiopian furniture exists, but modern

styles are increasingly popular, especially in urban areas. There's also
an influence of imported furniture designs.

2. Market Trends

 Urbanization and Modernization: The growth of cities leads to demand

for modern, space-saving furniture for apartments and offices.

 Increased Construction: Expansion in residential and commercial

building boosts the need for furniture.

 Demand for Variety: Consumers seek diverse furniture styles, including

modern, contemporary, and traditional designs.

 Local Production vs. Imports: There's a mix of locally produced and

imported furniture, with a growing emphasis on local manufacturing.
3. Value Chain

The furniture value chain in Ethiopia involves several stages:

 Raw Material Sourcing: This includes wood, textiles, leather, metal, and
other materials.

 Production/Manufacturing: Furniture is produced by small workshops,

medium-sized factories, and larger industrial manufacturers.

 Distribution: Furniture reaches customers through various channels,

such as retail stores, showrooms, and markets.

 Retail: Furniture is sold to individual consumers, households,

businesses, and institutions.

4. Distribution Channels

 Small Workshops and Artisans: Many traditional furniture pieces are

made and sold directly by small workshops and individual artisans.

 Retail Stores and Showrooms: Furniture stores in urban areas display

and sell a variety of furniture.

 Open Markets: Furniture is also sold in open-air markets, particularly in

smaller towns and for more basic items.

 Contract Sales: Furniture is supplied directly to businesses, hotels, and

government institutions.

 Emerging Channels: E-commerce and online platforms for furniture

sales are gradually emerging, especially in urban centers.

5. Mark-Up

Mark-ups in the furniture sector vary:

 Raw Materials: There can be mark-ups as raw materials (especially

imported ones) move from suppliers to manufacturers.

 Production: Manufacturers add mark-ups to cover production costs,

labor, and profit.

 Retail: Retailers apply mark-ups to cover showroom costs, sales staff,

and profit margins.

 Imported Furniture: Imported furniture may have higher mark-ups due

to shipping, import duties, and currency exchange rates.
6. Five Forces Analysis

 Rivalry Among Existing Competitors: Moderate to High

o Competition exists between small-scale local producers, larger

domestic manufacturers, and importers of foreign furniture.

o Factors include price, quality, design, and brand reputation.

 Threat of New Entrants: Moderate

o Starting a small furniture workshop can have relatively low

barriers, but establishing a large-scale manufacturing operation
requires significant investment.

o Competition from imports can also pose a threat.

 Bargaining Power of Suppliers: Moderate

o Suppliers of common materials like wood may have moderate

power.

o Suppliers of specialized materials or imported components may

have higher power.

 Bargaining Power of Buyers: Moderate to High

o Consumers have a range of choices, from affordable locally made

furniture to higher-end imported items.

o Price sensitivity can be a factor, especially for basic furniture.

 Threat of Substitute Products: Low to Moderate

o While there are alternative ways to fulfill the function of furniture

(e.g., using basic seating), the need for furniture in homes and
offices is generally consistent.

7. Major Competitors

 Local Furniture Manufacturers: Companies producing furniture for the

domestic market.

 Small Workshops and Artisans: Individual craftsmen producing

traditional or custom furniture.

 Furniture Importers: Businesses that import and sell furniture from

other countries.
8. Product and Customer Segments

 Product Segments:

o Household Furniture (living room, bedroom, dining room)

o Office Furniture

o Outdoor Furniture

o Traditional Furniture

 Customer Segments:

o Individual Consumers/Households

o Businesses

o Hotels and Restaurants

o Government and Institutions

9. Related Issues

 Raw Material Availability: Access to quality wood and other raw

materials can be a challenge.

 Skills and Training: The availability of skilled labor for furniture

production is important.

 Import Competition: Competition from cheaper imported furniture can

affect local manufacturers.

 Design and Innovation: Keeping up with modern furniture trends and

design is crucial.

Okay, let's delve deeper into the Ethiopian furniture value chain,
distribution channels, mark-ups, the Five Forces analysis, major
competitors, product and customer segments, and related issues,
incorporating more detail and aiming to include numerical
statistics where available.
3. Value Chain: A Detailed Look
The Ethiopian furniture value chain is a dynamic system that
transforms raw materials into finished furniture products,
delivering them to various customer segments. Each stage
presents unique characteristics and challenges.
Raw Material Sourcing: This initial stage is critical and involves
acquiring a diverse range of inputs.
 Wood: This is the primary raw material for much of the
furniture produced in Ethiopia. Sources can range from
sustainably managed forests (though these are still
developing) to smaller-scale logging operations. There's a
significant reliance on both indigenous species like
eucalyptus and wanza, as well as imported timber,
particularly for higher-end or specialized furniture. Anecdotal
evidence suggests that the cost of quality timber has been
increasing, impacting production costs for manufacturers.
 Textiles and Leather: These are crucial for upholstery.
Ethiopia has a growing textile industry, but specialized
furniture-grade fabrics and high-quality leather may still be
imported. The quality and price of locally sourced textiles
and leather can vary significantly.
 Metal: Used for frames, supports, and accessories, metal is
often sourced from local fabricators or imported as finished
components. The price of steel and other metals can
fluctuate based on global market conditions.
 Other Materials: This category includes items like foam,
adhesives, paints, varnishes, hardware (hinges, handles,
screws), and glass. Many of these may be imported,
especially if specific quality standards or functionalities are
required.
Production/Manufacturing: This stage is characterized by a
spectrum of scales and technologies.
 Small Workshops and Artisans: These form a significant
portion of the furniture production landscape, particularly for
 traditional and custom-made furniture. They often rely on
manual techniques and basic machinery. Their output can be
limited in volume but may excel in craftsmanship and unique
designs. Estimates suggest that a large percentage of
furniture production in rural and peri-urban areas originates
from these small-scale operations, although precise figures
are hard to come by.
 Medium-Sized Factories: These represent a more formalized
level of production, employing more machinery and
potentially assembly-line processes. They can achieve higher
production volumes and may cater to a broader market
segment. These factories often face challenges related to
access to finance for upgrading equipment and consistent
supply of quality raw materials.
 Larger Industrial Manufacturers: This segment is still
developing in Ethiopia but is growing, particularly in urban
centers. These manufacturers invest in advanced machinery,
standardized production processes, and may focus on mass
production for larger contracts or retail chains. They often
have better access to capital and can achieve economies of
scale.
Distribution: Getting the finished furniture to the customer
involves various pathways including direct sales by small
workshops and artisans, retail stores and showrooms, open
markets, contract sales, and online platforms.
 Direct Sales by Small Workshops and Artisans: This is a
common model where producers sell directly from their
workshops or at local markets, eliminating intermediaries.
This allows for closer customer interaction and potentially
higher profit margins for the producer, but limits reach.
 Retail Stores and Showrooms: Primarily located in urban
areas, these stores showcase a variety of furniture from
 different manufacturers and importers. They provide a
physical space for customers to view and assess furniture
before purchase. The number of established furniture retail
stores is growing in major cities like Addis Ababa, reflecting
increasing urbanization and disposable incomes.
 Open Markets: These remain important channels, especially
for more basic and affordable furniture options. They cater to
a wide range of consumers, particularly in smaller towns and
lower-income brackets.
 Contract Sales: Direct supply to businesses (offices, hotels),
government institutions (schools, hospitals), and other
organizations for bulk purchases. This often involves tenders
and specific quality requirements.
 Emerging Channels (E-commerce and Online Platforms):
While still nascent, online furniture sales are gradually
gaining traction, particularly in Addis Ababa and among
younger, tech-savvy consumers. Platforms are emerging that
connect manufacturers and retailers with online buyers,
offering convenience and wider reach. Data on the exact
market share of online furniture sales is limited but shows a
positive growth trend.
Retail: This is the final point of sale to the end consumer. Retailers
play a crucial role in marketing, displaying, and selling furniture,
often providing after-sales services. The retail landscape is
diverse, ranging from large showrooms with a wide selection to
smaller shops specializing in specific types of furniture.
 RM
Sourcing

Manufacturing

Distribution

Retail

4. Distribution Channels: A Deeper Dive

Understanding the nuances of each distribution channel is key to
grasping the market dynamics.
Source: Addis Ababa Trade Bureau
 Small Workshops and Artisans: These often operate with low
overheads and can offer competitive prices on their
handcrafted items.
 Retail Stores and Showrooms: These provide a crucial
platform for consumers to experience furniture firsthand.
They invest in display, staffing, and marketing to attract
customers.
 Open Markets: These offer affordability and accessibility,
particularly for a large segment of the population. However,
the quality and variety of furniture available in open markets
may be limited compared to retail stores.
 Contract Sales: This channel is characterized by bulk orders
and specific requirements. Building relationships and
 participating in tender processes are crucial for success in
this segment.
 Emerging Channels: The growth of internet penetration and
mobile usage is driving the gradual adoption of e-commerce
in the furniture sector.
Small
Workshops &
Artisans

Retail Stores &

Showrooms
Open Markets

Contract Sales

Online Markets

End Users

5. Mark-Up: Unpacking the Pricing Structure

Mark-ups at each stage of the value chain contribute to the final
price consumers pay.

Raw Producti Final

Productio Retail
Materials
n cost on mark Mark ups Price
cost ups
 Transpor Importe Retail
Manufac Final
tation
trer r Mark Mark
price
and Price
Tariff ups ups

For Locally Produced Furniture

For Imported Furniture
 Raw Materials: Suppliers, especially those dealing with
imported or specialized materials, will add mark-ups to cover
their costs (sourcing, transportation, storage) and profit
margins. Fluctuations in global commodity prices and
exchange rates can significantly impact these initial mark-
ups.
 Production: Manufacturers apply mark-ups based on their
production costs (raw materials, labor, energy, overhead),
desired profit margins, and the perceived value of their
products (design, quality, brand). The mark-ups can vary
significantly based on the scale of operation and production
efficiency.
 Retail: Retailers add mark-ups to cover their operational
costs (rent, utilities, salaries, marketing), inventory holding
costs, and desired profit margins. These mark-ups can vary
depending on the type of store (e.g., high-end showroom vs.
budget retailer), location, and the brand of furniture being
sold.
  Imported Furniture: The final price of imported furniture
often includes significant mark-ups due to international
shipping costs, import duties and taxes levied by the
Ethiopian government, currency exchange rate fluctuations,
and the mark-ups applied by importers and retailers. This
often makes imported furniture significantly more expensive
than locally produced alternatives. Specific data on average
mark-up percentages at each stage is not readily available
publicly but would be valuable for a comprehensive
understanding of the pricing dynamics.
6. Five Forces Analysis: Understanding Industry
Competition
Porter's Five Forces framework helps analyze the competitive
intensity and attractiveness of the Ethiopian furniture industry.
 Rivalry Among Existing Competitors: Moderate to High
o The market includes a mix of small-scale local
producers, medium-sized domestic manufacturers, and
importers.
o Competition occurs across various dimensions,
including price (especially for basic furniture), quality
(ranging from basic to high-end), design (traditional vs.
modern), and brand reputation (emerging for local
brands, established for some international ones).
o The fragmented nature of the local production sector
contributes to price competition, while importers often
compete on design and perceived quality.
 Threat of New Entrants: Moderate
o The initial investment for starting a small furniture
workshop can be relatively low, leading to a steady
stream of new small-scale producers.
 o However, establishing a large-scale, efficient
manufacturing operation requires significant capital
investment, technological expertise, and access to
distribution networks, creating barriers to entry for
larger players.
o Competition from established importers also acts as a
barrier for new domestic manufacturers trying to gain
market share in higher-end segments.
 Bargaining Power of Suppliers: Moderate
o Suppliers of common raw materials like locally sourced
wood may have moderate bargaining power, especially
if there are multiple suppliers and the material is not
highly differentiated.
o However, suppliers of specialized materials (e.g.,
specific types of imported wood, high-quality upholstery
fabrics, specialized hardware) or those with proprietary
technologies may have higher bargaining power due to
limited alternatives.
 Bargaining Power of Buyers: Moderate to High
o Consumers have a range of choices, from affordable
locally made furniture to more expensive imported
options. This increases their bargaining power,
especially for price-sensitive segments.
o The increasing availability of information through
emerging online channels could further empower
buyers by allowing for easier price comparison.
o For large institutional buyers (hotels, government), their
bulk purchasing power gives them significant leverage
in negotiating prices and terms.
 Threat of Substitute Products: Low to Moderate
 o While there might be basic alternatives to furniture
(e.g., using mats for seating), the fundamental need for
furniture in homes and offices for comfort, functionality,
and storage is relatively consistent.
o The threat might come from very low-cost, basic
alternatives or from a shift in lifestyle that reduces the
need for certain types of furniture (though this is less
likely in the Ethiopian context).
7. Major Competitors: The Players in the Market
The competitive landscape includes diverse players:
 Local Furniture Manufacturers: These companies produce
furniture primarily for the domestic market. They vary in
size, production capacity, and the types of furniture they
offer (from basic to more sophisticated designs). Some are
focusing on building brand recognition and improving quality
to compete with imports. Identifying specific major local
manufacturers and their market share would require in-
depth market research.
 Small Workshops and Artisans: These individual or small-
group producers often specialize in traditional designs,
custom orders, or niche markets. They are numerous and
play a significant role in local economies.
 Furniture Importers: These businesses bring in furniture from
other countries, often catering to the higher-end market
segments that demand specific styles, brands, or quality
standards not readily available locally. They navigate import
regulations, tariffs, and currency fluctuations.
8. Product and Customer Segments: Catering to Diverse
Needs
The furniture market can be segmented by product type and the
characteristics of the customers.
 Product Segments:
o Household Furniture: This is a large segment
encompassing furniture for living rooms (sofas, tables,
entertainment units), bedrooms (beds, wardrobes,
dressers), and dining rooms (tables, chairs, cabinets).
o Office Furniture: Includes desks, chairs, filing cabinets,
and other furniture designed for commercial and office
environments. This segment is growing with the
expansion of businesses and institutions.
o Outdoor Furniture: Items designed for gardens, patios,
and balconies, such as outdoor seating, tables, and
umbrellas. This segment is relatively smaller but
growing, particularly in urban areas with more outdoor
living spaces.
o Traditional Furniture: Often handcrafted with local
designs and materials, catering to cultural preferences
and specific aesthetic tastes.
 Customer Segments:
o Individual Consumers/Households: This is the largest
customer segment, with diverse needs and price
sensitivities based on income levels, family size, and
lifestyle.
o Businesses: Offices, retail establishments, and other
commercial entities require furniture for their
operations. Their purchasing decisions are often driven
by functionality, durability, and cost-effectiveness.
o Hotels and Restaurants: This segment demands
furniture that is both aesthetically pleasing and durable
to withstand frequent use. They often require bulk
purchases and specific design themes.
 o Government and Institutions: Schools, hospitals, and
government offices are significant buyers of furniture,
often through tender processes with specific quality and
budgetary requirements.
Source: New Business Ethiopia
9. Related Issues: Challenges and Opportunities
The Ethiopian furniture sector faces several challenges and
opportunities:
 Raw Material Availability: Ensuring a consistent supply of
quality wood and other raw materials is a significant
challenge. Deforestation and the lack of sustainably
managed forests can lead to scarcity and increased costs.
Investing in sustainable forestry practices and exploring
alternative materials are crucial.
 Skills and Training: A shortage of skilled labor in furniture
design, production techniques, and finishing can hinder the
growth of the industry and limit the quality and
sophistication of locally produced furniture. Investing in
vocational training and skills development programs is
essential.
 Import Competition: The influx of cheaper imported
furniture, particularly from Asia, poses a significant
competitive challenge for local manufacturers, especially in
price-sensitive segments. Enhancing the quality, design, and
marketing of local products is vital to compete effectively.
 Design and Innovation: Keeping up with modern furniture
trends and incorporating innovative designs is crucial for
local manufacturers to appeal to a wider range of
consumers, especially in urban areas. Investing in design
capabilities and adopting new technologies can enhance
competitiveness.
  Access to Finance: Small and medium-sized furniture
enterprises often face challenges in accessing affordable
financing for capital investments, working capital, and
expansion. Improving access to credit and financial support
is crucial for their growth.
 Infrastructure and Logistics: Inadequate infrastructure,
including transportation networks and power supply, can
affect the cost and efficiency of furniture production and
distribution. Improvements in infrastructure are essential for
the sector's development.
 Market Information and Research: A lack of comprehensive
data on market trends, consumer preferences, and
competitor activities hinders informed decision-making by
businesses in the sector. Investing in market research and
data collection is important.
By addressing these challenges and capitalizing on emerging
opportunities, the Ethiopian furniture sector has the potential for
significant growth and contribution to the national economy. More
detailed statistical data, while currently limited in public
availability, would provide a more precise understanding of the
market size, growth rates, and the specific contributions of
different segments.

While precise, comprehensive, and consistently updated official

statistics for the entire Ethiopian furniture industry can be
challenging to obtain publicly, here's an overview of the market
growth based on available information and trends:
Market Size and Revenue:
 In 2023, the revenue in the Ethiopian furniture market
amounted to approximately US$617.10 million.1
  The market is projected to experience an annual growth rate
(CAGR) of 10.36% between 2023 and 2028.2 This indicates a
significant expansion in the coming years.
 The largest segment within the furniture market is Living
Room Furniture, with a market volume of around US$207.50
million in 2023.3

Revenue in Million USD for Furniture Products

Living room fur-

niture
34%

Other furniture
products
66%

Historical Growth and Trends:

 The demand for furniture in Ethiopia has been driven by
factors such as urbanization, a growing middle class, and an
increase in disposable income.4 The construction boom has
also contributed significantly to this demand.
 Ethiopia's expenditure on furniture imports fluctuated but
reached approximately US$97 million in 2019.5 Imports saw
a significant increase in 2021.
 In 2017, Ethiopia imported furniture worth over ETB 675
million, and this figure doubled to over ETB 1.2 billion in
2021, indicating a substantial rise in demand met by
imports.6
  The market saw a remarkable increase in imports in 2021,
growing by 221% in volume terms. However, imports
decreased in value in 2023 to around US$39 million.
 Exports of furniture from Ethiopia also saw significant growth
in 2021, with a 438% increase in volume.7 In 2023, exports
surged to 202 tons, a 31% increase from 2022, and in value
terms reached US$1.2 million.
Local vs. Imported Furniture:
 Locally produced furniture caters to a significant portion of
the demand. In recent reports, it was stated that 70% of
furniture consumed in Ethiopia is locally made.
 Despite this, a significant amount of raw materials and semi-
processed goods used in local manufacturing are still
imported.
 Over the past five years leading up to recent reports,
Ethiopia spent over US$78 million on furniture imports,
primarily from countries like Turkey, China, and Malaysia. 8
Key Growth Drivers:
 Urbanization: As more people move to urban centers, the
demand for modern and diverse furniture for homes and
businesses increases.
 Rising Disposable Income: A growing middle class with
higher disposable income has more purchasing power for
furniture.
 Construction Sector Growth: The expansion of residential and
commercial buildings directly fuels the demand for
furnishing.
 Government Initiatives: The government is reportedly
working on utilizing the nation's forestry resources to
support the local furniture industry.
Challenges and Opportunities:
 While the market is growing, there are challenges related to
the quality of locally produced furniture, as some studies
indicate consumer preference leans towards imports due to
perceived higher quality.
 There is an opportunity for local manufacturers to improve
quality, design, and potentially reduce reliance on imported
raw materials to further capture the growing domestic
market and potentially expand exports.
Forecast:
 The Ethiopian furniture market is expected to continue its
growth trajectory in the medium term, driven by the
aforementioned factors. The projected CAGR of 10.36% until
2028 suggests a promising future for the industry.
It's important to note that specific, detailed statistical reports
often come at a cost and may not be readily available in the
public domain. The figures above provide a general overview of
the market growth and trends based on available reports and
analyses. For more in-depth and specific data, specialized market
research reports would be necessary.
Source: Zoom info
Source: EV market Report, Mehammedamin Delilo
Source: BiS Consulting Previous Analysis
 After
Car
Sales End Users
Dealers
Service

Import/Assembly

Car Dealers

Retail

After Sales Service

End Users

Source: Interview from car dealers