Vietnam remains world’s 6th largest furniture producer
Vietnam remains world’s 6th largest furniture producer
Furniture accounted for up to 82.9% of Vietnam’s total export turnover in wood and wood products last year, reaching nearly $8.4 billion.
Over the past decade, Vietnam has made remarkable strides in the global furniture supply chain, becoming the world's sixth-largest furniture manufacturer in 2023.
Furniture accounts for 93% of Vietnam's total export turnover of wood and wood products in 2023. Photo: Viet Dung/The Hanoi Times |
This information was revealed by CSIL industry (Center for Industrial Studies), a research and consulting organization for the furniture market and industry based in Milan, Italy, during the "Wood and Furniture Forum" within the framework of Hawa Expo 2024 in Ho Chi Minh City.
Vietnam has achieved "impressive growth" in the global furniture manufacturing ranking, rising from 13th place in 2014 to 6th place last year, based on the value scale. The top 5 largest furniture manufacturers are China, the US, Italy, Germany, and India.
Giovana Castellina, Director of Multi-client Furniture Research at CSIL, described Vietnam's furniture industry as flexible and the fastest growing among furniture-producing countries over the past 10 years. "Initially, Vietnam mainly supplied outdoor furniture, but now it has developed furniture significantly. For example, 25% of its products are upholstered furniture, accounting for 10% of the Asia-Pacific upholstered furniture output," she pointed out.
According to CSIL, Vietnam's furniture production grows at an annual average of 10%, with furniture exports growing at 11%, ranking second in Asia. "Export is the driving force for growth, accounting for 93% of the total production volume," she said.
Vietnam's woodwork products gain reputation
Data from the Department of Forestry revealed that in the total export turnover of wood and wood products last year, furniture accounted for up to 82.9%, reaching nearly US$8.4 billion.
Tran Quang Bao, Director of the Forestry Department, praised Vietnam's products for being trustworthy to international customers.
Tran Duc Hieu, Vice Chairman of the Tran Duc Group, said they are exporting 200 containers per month.
Recently, Tran Duc Homes, a member of this group, successfully sold prefabricated wooden houses to the US. With two factories covering 120,000 square meters in Binh Duong, they have also invested in the first Cross-Laminated Timber (CLT) component line in Southeast Asia, an alternative structural solution replacing traditional reinforced concrete.
Forestry expert Dr. Nguyen Tuan Hung estimated the potential of the furniture industry as a $405 billion international market. Meanwhile, Vietnam has at least 20 years of experience, with an annual harvest of over 30 million cubic meters, meeting 75% of the demand. "Wood is an environmentally friendly material, renewable, reducing emissions if harvested legally. We are promoting the application of forest certification and planting area codes," Hung said.
In the first two months of this year, the export turnover of wood and wood products reached $2.4 billion, an increase of nearly 44%. The Handicraft & Wood Industry Association of Ho Chi Minh City (Hawa) stated that businesses already have orders until April-May. The situation is more optimistic than in 2023, but experts believe caution is still needed.
Nguyen Liem, Chairman of the Binh Duong Wood Processing Association (Bifa), mentioned that the current trend of buyers is placing short-term orders. "With inflation and high-interest costs, they do not commit for a year or six months, but only for a few months, even month by month. This year's export volume is good compared to last year. If conflicts decrease, the demand will increase," Liem said. Currently, Binh Duong's timber industry accounts for over 40% of the country's annual export share.
Giovana Castellina believes that Vietnam's furniture exports are "very risky" if they overly focus on the US, which accounts for over 50% of annual turnover. "Their weakened consumption last year due to high inflation and increased mortgage interest rates is an example. They also have a presidential election this year, so people are still cautious," Castellina said.
Therefore, she suggested the need to diversify customers by reaching out to Europe by expanding the trading system. In addition, it should develop its own brand and design models at an early stage in order to increase the price range and gain access to higher-end customers.
According to Dr. Nguyen Tuan Hung, the furniture industry has grown for many years, but relies on cheap materials and labor, resulting in low value added. "These advantages are gradually fading," he said.
Meanwhile, the market is becoming more stringent with a series of policies such as the EU Timber Regulation, the EU Timber Regulation (EURT), and the US Illegal Logging and Trade Act (LACY). The Carbon Border Adjustment Mechanism (CBAM) is not currently applied to the industry but will take effect in 2027.
Nguyen Liem mentioned that many Bifa businesses have actively enhanced product design capabilities but are also concerned about trade fraud. The furniture industry must find a way to prove to the world that it is doing business honestly.
"We are currently facing the challenge of origin fraud. Recently, we have worked with local authorities, customs, tax, and economic security to combat origin fraud," he said.
