MOSCOW — Russia’s furniture industry is fighting for survival. After a brief post-sanctions boom that saw domestic producers fill the void left by IKEA and European brands, the sector is now contracting under the weight of high interest rates, collapsing housing demand, and a tax burden that manufacturers say is pushing prices beyond what consumers can bear.
From Boom to Bust
The numbers tell a story of rapid deterioration. In 2024, Russia produced 75.7 million pieces of furniture worth 522 billion rubles, a 17.3% increase in value and 12.6% in volume over the previous year. Domestic producers had successfully stepped in after IKEA closed its 26 Russian stores and halted production at four factories.
That momentum has evaporated. In January 2026, the furniture production index stood at just 92% of the previous year’s level, and 63.8% of December 2025’s output. The first quarter of 2026 saw production fall 15.6% year-on-year. By the first half of 2026, the decline had moderated to 1.7% in volume, but the damage was already done: retail sales of furniture dropped 10% in the first quarter alone.
The Credit Squeeze
The root cause lies in Russia’s monetary policy. The Central Bank’s key rate peaked at 21% in October 2024 and stood at 16% in December 2025, creating the most restrictive borrowing environment since 2015. Mortgage flows collapsed in early 2025 after the cancellation of mass subsidized mortgages in July 2024.
The consequences for furniture were immediate. Developers cut furniture purchases for apartment fit-outs by 20–25%, down to 70–75 billion rubles. Consumers, facing expensive credit and attractive deposit rates, postponed major purchases. Furniture—a big-ticket, deferrable expense—became an early casualty of the savings shift.
Tax Burden Compounds Misery
Manufacturers received another blow on January 1, 2026, when the base VAT rate rose to 22%. Mr.Doors CEO Sergei Shikhov estimated this alone would push furniture prices up by 9–10%, with the tax increase affecting both production costs and the growing wage fund.
The timing was particularly unfortunate. The 18th EU sanctions package, adopted in summer 2025, banned furniture fittings imports from Europe, forcing Russian producers into a costly substitution process that remains incomplete. Meanwhile, the reduced VAT threshold for companies on the simplified tax system threatens thousands of small and medium-sized producers that make up a significant portion of the market.
Prices Up, Purchases Down
The result is a textbook demand shock. Median furniture prices rose 7% year-on-year in the first quarter of 2026, while the number of purchases fell 14%. Kitchen furniture saw the steepest increases—dining and living room cabinets rose 15.3%, kitchen sets 9.7%. The minimum cost to furnish a two-room apartment reached 258,600 rubles, up 5.3% year-on-year.
Consumers are adapting by buying less. Some are turning to the secondary market: by the first quarter of 2026, resale accounted for 51% of furniture and decor sales on Avito. Others are simply delaying purchases altogether. SberIndex data showed nominal consumer spending on furniture falling 7.2% in February and 9% by late March.
Where Demand Still Exists
Not all segments are suffering equally. Commercial demand has shifted decisively toward hospitality, healthcare, and education. Hotels in the Southern and North Caucasus federal districts are investing heavily in complete furnishing projects, while schools across multiple regions are undergoing renovation and refitting. Cafes and restaurants continue opening new locations or reformatting existing ones, driving demand for commercial furniture.
The office segment, which had been a growth driver through 2025, has turned negative. Office furniture production fell 5.5% in the first half of 2026. The decline is partly explained by changing office formats—more companies are opting for unfinished spaces without furnishing, allowing them to design offices according to their own specifications.
The Marketplace Revolution
The distribution landscape is being reshaped. Marketplaces accounted for 37% of furniture sales in monetary terms in the first half of 2026, up 7 percentage points year-on-year, while offline retail’s share fell 8 points to 47%. Wildberries reported 33% growth in furniture sales, and Yandex Market saw kitchen furniture sales rise 20%.
But this channel shift comes with its own pressures. Marketplace pricing policies force producers to sell “practically without markup” while absorbing high storage and commission costs, particularly for oversized goods. Small players find it increasingly difficult to access major platforms as fees and penalties rise.
The secondary market is also expanding. Avito’s resale share of furniture and decor reached 51% in early 2026, reflecting consumers’ rationalization of spending.
The Chinese Factor and Trade Tensions
Imports from “unfriendly” countries—primarily EU states—rose to 30 billion rubles in 2024, with forecasts of 40 billion in 2025. The Association of Furniture and Woodworking Enterprises (AMDPR) has pushed for protective tariffs, arguing that current duties of 9–12% are insufficient to protect domestic producers.
The government is reportedly considering the measure. A government subcommission on economic resilience has discussed imposing barrier duties on furniture from unfriendly countries, a move that would significantly complicate imports and potentially redirect demand toward Russian producers.
But industry observers note that Chinese furniture, often imported through third countries, presents a more complex challenge. Chinese products dominate the economy segment on marketplaces, where price competition is most intense and domestic producers’ margins are thinnest.
Survival of the Fittest
The consensus among industry leaders is that 2026 is a year of survival, not growth. Alexander Manyonok of Askona put it bluntly: “The question of survival for many players in the furniture market in 2026 is extremely acute.”
Companies that emerge from this period will need to be leaner, more adaptable, and more focused on profitable channels. The era of rapid expansion that followed IKEA’s departure is over. What remains is a market where efficiency, cost control, and the ability to navigate an increasingly digital and price-sensitive landscape will determine who stays and who goes.
For an industry that once celebrated its ability to fill the gap left by Western brands, the challenge now is more existential: proving that it can survive a downturn that shows no sign of easing.
