Why the rug industry loves Chinese imports
By Lissa Wyman, Rug Editor -- Furniture Today, April 12, 2004
Chinese furniture imports are a sharp thorn in the side of some U.S. furniture manufacturers. But Chinese rugs are a fact of life in the rug business. Inexpensive Chinese products exist in both sectors, but Chinese imports are not perceived as a threat to the U.S. rug market.
In fact, nearly all American rug manufacturers now have import departments, including the two giants, Shaw Inds. and Mohawk Inds. For them, rugs from China and India are a part of being a one-stop resource.
The rug industry, like the furniture industry, has been involved with the U.S. Department of Commerce to develop an equitable system of trade with China. Quotas have been an issue. When rugs were lumped together with several commodity textiles items, the Oriental Rug Importers Assn. fought successfully to END quotas on Chinese rugs. They came pouring back on the market and everyone up and down the supply chain was happy.
When President Nixon opened trade with China back in 1972, U.S. rug importers were among the first in line. Trans Ocean Imports and MER Imports were two of the first to offer Chinese rugs to American consumers. They weren't cheap. In fact, the early hand-knotted products were priced well above the average rugs of the time.
Since then, Chinese manufacturers have developed techniques to make hand-tufted and hand-hooked rugs for the mid-market customer. As trade has become more open, large U.S. rug importers such as Nourison have entered into joint manufacturing ventures in China.
Today, Chinese rugs are priced only slightly higher than machine-made products.
By the way, Trans Ocean and MER, those import pioneers of 30 years ago, are still very much in business. They didn't kick and scream about profit margins and quality and dealer loyalty. They added the new, less-expensive products to their mix and broadened their channels of distribution. Trans Ocean, in fact, now specializes in medium-priced rugs rather than the high end.
I believe product differentiation is one of the major reasons that domestically produced and imported rugs have had such a peaceful co-existence.
Hand-made constructions have been the domain of Chinese (and Indian) rugs. Whether hand knotted, hand hooked or hand tufted, they look and feel very different from American or European machine-made products. In fact, as prices on rug imports have drifted downward, American and European machine-made manufacturers have developed new technology to achieve the multiple colors and intricate patterns that once were possible only in very high-end hand-knotted rugs.
It has been a win-win-win situation for everyone involved. The market has expanded at least 10-fold since the 1970s, and the consumer has been the biggest winner of all.
Back in the 1970s, only the wealthiest Americans could afford the rugs that came from China. Today, you can buy a Chinese hand-made room-size rug for less that $400. That is true democracy.
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