The carpet and rug market - Italy

1.2 The Global Market

The market for carpets and rugs is set to grow strongly due to structural factors such as an increasing middle-class population, growing demand from residential and nonresidential sectors, and increased renovation and remodeling activities. According to the research institute Research and Markets, the global carpet market has grown from $**.* billion in **** to $***.* billion by ****, with an estimated CAGR of *.* percent.

Size of the Global Carpet Market World **** - ****, billion Research and Markets

The tufted carpet and rug type is expected to reach the highest CAGR between **** and ****. Asia Pacific is expected to be the fastest growing region during the forecast period, followed by the Middle East and Africa. In Asia Pacific, China is estimated to be the largest consumer of carpets and rugs, followed by India.

1.3 The Italian market

In Italy, the market for carpets and rugs is stable. In fact, in the carpet and rug production segment, turnover values and production value have remained almost stable. Underlying this is the relative stability of the Italian real estate market, which has seen a slight increase of * percent over the past * years (***)[***].

Value of production sold, thousands of euros Italy, **** - ****, thousands of euros ISTAT

Also on the distribution side, the stability of the market is confirmed by the almost identical turnover between **** and **** of companies registered with Ateco ****- **** "Retail trade in carpets and other floor coverings (***)"

Turnover of enterprises "Retail trade in carpets and other floor coverings," millions of euros Italy, **** - ****, million euros ISTAT

1.4 Exports and Imports

This section provides an overview of international trade in Carpets and Rugs in Italy. Data from the UN ComTrade code "** - carpets and other textile floor coverings" for export and import figures.

As can be seen from the graph, Italy has an almost neutral trade balance, as far as this sector is concerned, being the values of exports almost equal to those of imports. This is also evidenced by the close to * percent value of the coverage rate, calculated as Exports/Imports.

The value then of trade has remained stable over the past few years. In ****, the value of exports was $*** million while the value of imports was $*** million.

Values Exports and Imports of carpets and other textile floor coverings, millions of euros Italy, **** - ****, in million euros ONE COMTRADE

In terms of the main trading partners, it can be seen that, for exports, there is no main destination country. France was the top destination for products in **** with a value of exported goods of $**.* million, followed by Germany (***) are exported to other European and non-European countries.

Main countries of destination Italian exports Italy, ****, percent ONE COMTRADE Similar situation for imports where no main partner emerges. China and India are the ...

2.1 The role of the housing market

The construction and home buying and selling markets are two of the main drivers of the carpet market. They are particularly important given that consumers buying or building a new home are likely to purchase floor coverings.

We can see that there has been a ** percent increase in the number of home purchase transitions between **** and ****, which demonstrates the health and growth prospects of the carpet and rug market.

Housing buying and selling trends Italy, **** - ****, number of transactions IDEALIST

The renovation market also greatly influences the demand for carpets and rugs. In recent years, there have been **.* million interventions to rehabilitate the building stock, with a total expenditure of about ***.* billion euros and an average expenditure per intervention of *.* thousand euros[***].

New construction starts provide a partial forecast of future developments in the carpet and rug market. The latest available data show that there was a **% increase in new construction permits between Q* of **** compared to Q* of ****, also aided by the pandemic situation.

Building Permit Indicators Italy, **** - ****, housing ISTAT

2.2 Evolution of Expenditure

The graph shows the average expenditure per household for the purchase of carpets and rugs (***).

The market is highly unstable with large fluctuations in spending between years. Despite the sharp decrease in ****, the market has remained at constant values and, as shown, expects its growth related to the increase in new homes and renovations.

Evolution of Average Monthly Household Expenditure on Carpets and Rugs Italy, ****- ****, current euros ISTAT

Geographically, we can see that there is a huge disparity in spending between households in the North West-East and those in Southern Italy. These spend on average ** percent less than northern households. In general, the households that spend the most monthly are those in the North, both East and West, followed by households in the Center and Islands.

2.2 The new trends

In recent years, rugs have become more expensive as more people have become interested in unique, handmade rugs. Graphic patterns are in fashion. These are generally geometric shapes, in straight lines or otherwise, with repetitions of the same pattern throughout the rug. In addition, the rug must be maxi; in fact, the main trend of the moment is to buy rugs capable of covering almost the entire floor. The larger the rug, the more in line with the fashion of the moment[***]. Another trend is the combination of colors on pop carpets, straight from the ****s, which gives a warmer atmosphere to the room where the product is installed. Finally, Persian rugs are also making a comeback and are becoming a must-have in living rooms because of their warm and pure style[***]. As for carpeting, it is strongly coming back into fashion. This is certainly due to more elaborate design research by manufacturers, both in terms of the materials used and the graphics. However, all the new materials have in common flame resistance and an improvement on the hygiene front. Stains are easily removed with sparkling water or baking soda. The fabrics are composed of natural, but mostly synthetic fibers, which ...

3.1 Few players on the market

The number of companies operating in the entire production and distribution chain of carpets and rugs is very small. To calculate the number of companies, again, enterprises with ateco codes were used:

**.**.**: Manufacture of carpets and rugs **.**.**: Carpet retailing

At the production level, we see a highly stable market with the same number of companies between **** and ****. For retail trade, similar situation with only a * percent increase in operating firms between **** and ****.

Number of retail trade and carpet and rug manufacturing firms Italy, ****- ****, number of enterprises ISTAT

Regarding the legal form adopted by enterprises, we can see that for both manufacturing and retail, there is a clear prevalence of sole proprietors and cooperative societies, evidence of how little initial capital is needed to enter the market.

Legal Forms Companies Italy, ****, number ISTAT

The table below then lists the top companies by turnover for carpet and rug manufacturing.

Company City Region Turnover **** Profit **** Production **** Limonta Sport SPA Grass Lombardy **.***.*** € *.***.*** € **.***.*** € Radici Pietro Industries & Brands Cazzano Sant'Andrea Lombardy **.***.*** € - *.***.*** € **.***.*** € Alma SPA Prato Tuscany **.***.*** € - *.***.*** € **.***.***€ O&N SPA Nonantola Emilia - Romagna **.***.*** € *.***.*** € **.***.*** € MTM SRL Meda Lombardy *.***.*** € ***.*** € *.***.*** € REDS SRL Merate Lombardy *.***.*** € ***.*** € *.***.*** € Besana Moquette SRL Grass Lombardy *.***.*** € **.*** € *.***.*** € Safitex Turf SRL Gandino Lombardy *.***.*** € ***.*** € *.***.*** € Umbrania - SRL Bevagna Umbria *.***.*** ...

3.2 Production chain

Today's Production

Historically, carpets have always been woven by hand, using very fine filaments and traditional weaving techniques typical of countries such as Turkey (***), the Caucasus, Afghanistan and neighboring countries, as well as the westernmost provinces of China. Today, given the huge demand for carpets of all kinds and to make the product accessible to a wider target audience, production has been industrialized; the development of the industry has divided the market into machine-made carpets and carpets knotted according to traditional processing.

The former, have made it possible to create a product at an attainable price and to use raw materials of all kinds, the latter method, the more traditional one, however, is still extremely popular. In fact, the most valuable ones, namely Persian carpets, are still produced in the home today since the knotting of carpets is most often a means for women to obtain extra income while managing the household[***].

Source: ****

Restoration

Especially the highest quality and handmade carpets, the so-called "hand-knotted carpets," despite the fact that they can last for generations, need after years of use, maintenance, especially due to the decreasing tightness of filament coloration. Today there are a number of artisans on the market who have ...

3.3 Distribution of carpets

There are different types of players in carpet and rug distribution:

Specialty retailers, who have a good reputation for quality advice, but who sell products that are often much more expensive than DIY stores B*B dealers, who sell wholesale to retailers DIY stores: they offer lower prices and have a very wide range. They are the big winners in recent years, as many Italians began to prefer DIY during the crisis Large grocery stores benefit from strong in-store traffic but lack the specialized knowledge of DIY stores Furniture stores, while not specializing in carpets and rugs are still able to offer a limited number of items.

DIY stores, as highlighted, have been the big winners in recent years, with an increase in sales driven by a greater appetite for DIY during domestic confines. The sector is now approaching *** stores nationwide and one million square feet of display space. Results that now place it as an established trend for the general consumer public but also for industries in the sector, including carpet manufacturers, which, having overcome initial mistrust, cannot now ignore this distribution channel.

In Italy, DIY retail stores have an average of more than * thousand square meters per store. The ...

4.1 Type of the offer

There are four main families of carpets and rugs[***]:

natural fiber carpets; carpets with synthetic fibers; shaggy (***) carpets; oriental carpets.

Used primarily as a decorative element, carpets and rugs have good insulating properties but are not very durable and difficult to maintain.

Among the range of oriental carpets, three categories can generally be distinguished according to the environment in which they were made:

nomadic carpets; village carpets; workshop carpets.

Carpets in these various categories differ in several respects. Some manufacturing defects on a nomadic rug are easily found; these defects are called "abrash" : they are variations in color, size and shape that give the rug its authenticity. Nomad carpets have a lively, rustic expression not found in workshop carpets[***].

The latter are the most renowned in the carpet industry, and in fact are also the most expensive. They are produced mainly in Iran, Turkey, China, India and Pakistan [***].

4.2 Composition of a carpet

Each carpet generally consists of four parts

The base

Made of a single continuous thread, usually cotton or silk, it establishes the base of the rug. The base is sometimes also called the warp.

The pile

On each pair of warp threads, a knot or weave must be made. The loose threads, or piles, form the pile. The knots can be of different colors or textures in order to create specific patterns. All knots are first drawn and determined on an initial grid plan.

Weft

The weft is a very fine, strong cotton thread that holds the warp threads together. The weft thread is passed gently with a comb through the crossing line of two half sheets to bypass each warp thread.

The reinforcing thread

This is a thick cotton thread inserted in each row before laying the weft thread, which strengthens the base of the rug. It allows knots to be fixed between two warp threads and gives body and strength to the base of the rug that will rest on the ground.

[***]

4.3 New trends in supply

Ecofriendly carpets and rugs

The concern for the environment and health that has permeated in various sectors in recent years has also taken hold in Italy in the home furnishings sector and in particular for carpets and rugs.

it has been studied that the materials and substances used in processing the fabric leading to the finished product, which are often petroleum derivatives put together with off-gas adhesives acrylic and polypropylene, are harmful not only to the environment when they are disposed of but also to the people themselves in the homes during daily life.

Therefore, the first eco-sustainable indoor carpets have appeared that are mainly made using recycled materials and without chemical compositions such as listed above; the main materials used are paper and cotton. The coloring is solely and exclusively obtained through natural pigments. Non-toxic vinyl glues are used in production. In order to choose an ecofriendly carpet, one must ascertain not only the material from which it is made but also the entire process of making it[***].

4.4 Prices

The consumer price of carpets, COICOP code **** "carpets and other floor coverings" had the following trend during the five-year period ****-****:

CPI Rating for Carpets and Rugs Italy, ****-****, in Index Base **** = *** Source: ****

As you can evenice from the graph, the price is practically constant with no major variations, a symptom of a stable and well-supported market.

5.1 Regulatory framework

Manufacturers of carpets and rugs may be required to comply with the following applicable regulations:

EN **-* Mechanical and Physical Properties: the purpose of this standard is to prevent a product from tearing too quickly. EN **-* Flammability: the purpose of this standard is to prevent the rapid spread of flames. EN **-* Composition requirements: this standard aims to ensure that the product is not toxic if put in the mouth by a child. EN ****-* and ****-* Evolution of flammability of a garment: the purpose of this standard is to prevent a product from igniting upon contact with a cigarette or match.

Finally, the REACH regulation, introduced in **** by the European Union, must be considered by carpet manufacturers. It applies to all chemicals, bringing together environmental and health regulations pertaining to chemicals under a single directive. The process lists more than **,*** substances and estimates their use. Companies in the industry must pay a fee for each product used.[***]

6.1 Segmentation

• IKEA Italia
• Interface
• Milliken Textile
• Adriani e Rossi Edizioni Srl
• Oriental Weavers
• Tai Ping Carpets
• Dixie Group, Inc.
• Victoria Plc
• Sartori Rugs
• Tarkett Groupe
• Belysse Group (Modulyss)