Demand for Vietnam-made furniture has seen exponential growth in the past decade. Innovative designs, superior craftsmanship and structural integrity have enabled suppliers to carve a niche for themselves in markets worldwide.
From the $200 million sales revenue in 2000, Vietnam’s exports of wooden products have increased by more than 1,000 percent to an impressive $2.36 billion in 2007. This positions the country among the top three sourcing centers for furniture in Asia.
Vietnam’s Ministry of Trade anticipates continuous growth, with exports of wooden products expected to reach $5.5 billion by 2010.
To expand their export markets further, furniture suppliers are focusing R&D on current market trends, accepting mixed orders, investing in automated equipment, and sending their employees for training overseas. Some are also exploring new markets to export to.
Despite seeing strong overseas demand, however, furniture makers in Vietnam are preparing themselves for a challenging time ahead.
Suppliers have been forced to adjust furniture quotes as production costs continue to rise. This makes them more vulnerable to competition from China, Malaysia and Indonesia.
In response, most suppliers are putting measures in place to increase their export revenue. Some companies, for instance, are improving their aftersales service, while others are releasing more high-value furniture that can bring better margins.
The following are some of the keytrends we see in Vietnam’s indoor and outdoor furniture industry:
• Exports in the line are expected to see robust growth in the next 12 months, with a slight change in main export markets. While the US is currently the biggest importer of Vietnam-made furniture, many suppliers will target the EU in the coming months.
• Most, if not all, suppliers will increase export prices by end 2008 to early 2009. The rising production costs has prompted suppliers to implement price adjustments. In fact, all companies interviewed for this report plan to do so. However, suppliers will limit increases to 15 percent.
• In the next 12 months, many suppliers will focus R&D efforts on models with contemporary styles and colors, and feature multifunction designs.
• Many makers will continue to address the growing consumer awareness of sustainable forest use by purchasing wood from FSC-certified suppliers in Vietnam and overseas.
The above is extracted from the Executive Summary of China Sourcing Report: Vietnam - Indoor & Outdoor Furniture
To learn more about this report, visit: http://www.chinasourcingreports.com/csr/vietnam-indoor-outdoor-furniture
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