Wooden furniture manufacturers look puzzled in home market
Wooden furniture manufacturers look puzzled in home market
The domestic wooden furniture market reportedly is worth three billion dollars, but it can bring only 20 percent of the total income of domestic wooden furniture manufacturers.
Vietnam expects to earn 4 billion dollars this year from wooden furniture exports. Its products have been present in 120 markets all around the world, while the US and EU consume 80 percent of the export turnover in 2011, worth 3.9 billion dollars. The exports bring 80 percent of the total income of the manufacturers.
Vietnamese wooden furniture exporters have committed that they still have not found the way to conquer the home market, because they do not understand the Vietnamese taste well. As a result, Vietnam has to import 2.4 billion dollars worth of wooden products every year.
CSIL, an Italian industry research center, in its World Furniture Outlook 2011 report, put Vietnam on the 12th position among the 70 surveyed countries. Meanwhile, it ranked the 22nd in terms of the domestic consumption market and 6th in terms of export market. The 2009’s turnover in the fields were 5.17 billion, 2.23 billion and 3.12 billion dollars, respectively.
It is estimated that the domestic and export consumption would be roughly 7 billion dollars this year.
Returning to home market
Analysts have commented that Vietnamese wooden furniture manufacturers have regrettably missed the home market which has a high demand, diversified taste (both low cost Chinese to high quality Italian products are available) and the people’s readiness to pay for furniture products.
Nguyen Truong Luu, Deputy Chair of the HCM City Architects’ Association, has blamed this on the lack of cooperation between manufacturers and designers.
The housing development holds up to 90 percent of the total demand of the total wooden furniture market. However, domestic manufacturers still cannot control the market. The problem is that they cannot understand the clients’ requirements in order to provide suitable products.
Vietnamese furniture enterprises prefer making products for export, because they can arrange production in a large scale and fulfill big orders. Meanwhile, if targeting the domestic market, they would have to diversify the designs continually to satisfy small orders.
“Vietnamese enterprises should get adapted in terms of production organization and try to cooperate with partners to develop the market,” Luu said.“It is really a paradox that European and American choosy clients can accept the products, while Vietnamese don’t.”
Obstacles existing on the domestic market
Dao Quang Hiep, President of Mifaco, which has the export turnover of 250 billion a year, said the company has been targeting the domestic market for the last three years only.
Hiep said it is necessary for enterprises to keep cautious when looking for the right way in the domestic market, because the market remains unprofessional, while consumers’ taste changes very rapidly.
Also according to Hiep, the outstanding characteristic of Vietnamese furniture enterprises is that they make products from A to Z. However, in the future, enterprises would join into a complete production chain, in which they would undertake specific links, which would help industrialize their production and cut down expenses.
Architect Ho Le Phuong has also noted that it is very difficult for Vietnamese manufacturers to squeeze into the Vietnamese market.
In order to penetrate the domestic market, enterprises would have to spend money and time on the market surveys, designing and distribution. Meanwhile, when making products for export, they don’t have to make design, make market surveys or distribute products.“It would be beyond the capacity of manufacturers, if they have to undertake so many works,” Phuong said.
vietnamnet
