Vietnam is gradually but steadily emerging as a prominent supplier of exquisite handcrafted home decor. Arich tradition of craftsmanship and the abundance of indigenous and natural materials have helped the industry carve a niche for itself in the global export market. The large pool of skilled and experienced artisans is another advantage the country has to offer.
Vietnam is home to 1,000 home decor companies that are supported by 2,000 handicraft villages and 1.4 million workers. Most suppliers are locally owned. Some are run by cooperatives, while a small number are foreign-invested. The line is highly export-oriented with the EU and the US as the leading overseas destinations, each absorbing about one-third of total shipments.
The Asia-Pacific region, particularly Japan, is a key market as well. Despite slower demand from export markets hit by the global economic downturn, Vietnam’s home decor exports continue to show substantial growth. In 2008, shipments of rattan, bamboo and natural-material handicrafts reached $223 million, an 18 percent increase over the previous year.
Suppliers, however, are looking ahead with cautious optimism as various issues make the business environment more difficult. The main challenges confronting makers are higher raw material and labor costs, and intense price competition.
The following are some of the keytrends we see in Vietnam’s home decor industry:
• Exports in the line are expected to experience modest growth in the next 12 months, with suppliers having to deal with a range of internal and external challenges. To stimulate sales, companies will emphasize product development and increase the output of upscale models.
• The majority of manufacturers will keep current price levels in an effort to sustain exports amid stiff internal competition. A small number of companies will increase quotes, but markups will be limited to within 10 percent.
• The US, the EU and Japan will continue to be the top importers, despite the drop in consumer demand in these areas. Some companies will also explore alternative markets such as Eastern Europe.
• Creating unique designs will be the main focus for a large number of makers in the next 12 months. This is particularly significant given the fact that the industry’s heavy dependence on OEM orders has in the past been a hindrance to active R&D.
The above is extracted from the Executive Summary of China Sourcing Report: Vietnam - Home Decor
To learn more about this report, visit: http://www.chinasourcingreports.com/csr/vietnam-home-decor
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