Can U.S. producers resist China bedding juggernaut?
David Perry, Executive editor -- Furniture Today, May 26, 2003
Is the U.S. bedding industry going to be routed by Chinese bedding producers?
That sounds like a melodramatic question, we admit. But it's a question some bedding insiders are taking seriously. They don't see how U.S. bedding makers can withstand, in the long run, an onslaught of sharply priced bedding imports that benefit from significantly lower costs for labor, materials and overhead in China.
Before you dismiss the possibility, consider the inroads the Chinese already have made against the U.S. furniture industry. Perhaps half of all wood furniture is now imported. Imports of upholstered furniture, including leather, are coming on strong. Bedroom suites and sofas are at least as bulky to ship as mattresses, if you are looking to claim, as some U.S. bedding makers do, that bedding is too expensive to ship across an ocean.
Chinese furniture producers have made believers out of many case goods and upholstery producers based in the United States. Why won't they do the same thing in bedding?
The Chinese will never be able to conquer the logistical challenges of shipping mattresses across the United States, you may say. But here's a counter thought: What if U.S. producers take over the distribution and warehousing of Chinese-made bedding?
A number of U.S. bedding producers already have solid relationships with Chinese producers, who are their licensees — but only for the Chinese market, of course. If they got the go-ahead from their U.S. licensors, it wouldn't be difficult for those Chinese producers to ship bedding lines to the United States, where the U.S. companies could send them through their own distribution networks.
The U.S. companies would warehouse the Chinese-made bedding and service them from their U.S. facilities. The bedding would carry the names of established U.S. brands. The consumer would not know the bedding came from China. Does the consumer even care where bedding is made?
Now you might say that U.S. bedding companies would never want to bring in Chinese product, because it would hurt their domestic producers. True enough. But if the cat already is out of the bag — and Chinese-made bedding already is being distributed in the United States — U.S. producers might want to add their own Chinese-made bedding to the mix. They would then be pursuing what furniture producers call a "blended" sourcing strategy, one that utilizes both domestic production and imports.
You can argue that domestic case goods producers who ignored the growth of Chinese imports paid a heavy price in lost market share and shuttered plants. Does that fate await U.S. bedding producers?
I'm not saying that it does, but I am asking the question. Consider yourself warned.
