Dongguan fair tilts toward home
By Thomas Russell -- Furniture Today, April 27, 2008
Houjie, China — Chinese manufacturers found a receptive audience among Chinese buyers attending the 19th International Famous Furniture Fair, which was less oriented toward exports than in the past.
Covering about 2.5 million square feet, the March event showcased a mix of traditional to contemporary case goods and upholstery largely designed or scaled for the Chinese market.
The show drew international buyers, too. Of the estimated total attendance of 110,000, about 13,000 were from overseas, about the same as last year, according to organizers. Show officials said some 2,800 buyers were from the United States, up 28.2% from 2007.
Still, Chinese buyers were dominant. Many exhibitors tailored their product mix to domestic buyers, although they also still showed some styles popular in Europe and the United States.
Glossy finishes and decorative ornamentation were signature elements on case goods, while many sofas had heavily padded arms and backs and large-scale wood trim on arms and bases.
Beijing Qumei Sofa Co. showed a line of clean-lined contemporary and transitional frames and accompanying occasional and home entertainment pieces. Dining room and bedroom pieces have similar styling.
While the U.S. represents 50% of Qumei's export business, the country only accounts for 5% of total sales, down from 8% three years ago, said Ying Zhu, Europe and U.S. market manager. It mainly sells living room and dining room to the U.S. market, not bedroom.
For Qumei and others, the growing Chinese market is indeed welcome. With rising costs of labor, materials and fuel, not to mention a decline in the value of the U.S. dollar and a slowing U.S. economy, many have faced immense pricing pressures. This dynamic largely has shifted the focus from the U.S. buyer to the domestic buyer.
"Under the impact from the sluggish U.S. economy and the bullish domestic China market, domestic sales became the focal point of the fair, while innovation in products and sales models as well as the nurturing of design, turned out as hot issues," show organizers wrote in their official report.
Many companies, including Qumei Sofa and Densing Furniture Development, still embrace the U.S. market. Today, about 80% of Densing's western traditional style upholstery and occasional tables are sold to the States.
Yet cost pressures caused a 40% drop in U.S. sales in 2007, said Kenneth Ng, marketing and sales manager. Rethinking its strategy, Densing now plans to sell one-third of its line to China, one-third to the U.S. and one-third to other markets such as Europe and the Middle East.
"Our main products have western styles, and the domestic market is not familiar with that," said group Chairman Ng Wing Chuen. Still, he said more Chinese customers are starting to like western styles.
The shift toward the domestic Chinese market caused some manufacturers to focus on promoting their brands and selling in company-owned and franchise stores both inside and outside China.
That includes Dongguan Maidee Furniture Company, which sells a line of contemporary bedroom and casual dining under the Maiso brand. China accounts for half of its sales, while the United States represents just 2% to 3%, said Sally Jiang, sales manager.
China also represents about half the sales of Dongguan Cheery Industry Co., which markets its line of European-style reproduction case goods and upholstery under the Stresa brand. Although it has been approached by U.S. buyers, it doesn't sell to that market yet, mainly because of concerns over high antidumping duties on its traditional bedrooms.
But for these and other companies, the international draw of the show is still a plus.
Singapore-based Star Furniture Inds., a regular here since 2000, showed a line of transitional case goods and upholstery. Star is another company that does not sell to the U.S. largely because of its high antidumping duty on wood bedroom furniture.
Singapore based Lorenzo International showed a transitional line of case goods and upholstery largely geared to markets in Europe and the Middle East. Company executive chairman James Goh said the U.S. represents less than 5% of sales.
Such emphasis on the domestic market and non-U.S. overseas markets made the show difficult to work for some American buyers.
Richard Tallin, president of accent furniture specialist A.A. Importing, said he has been going to the show since it got started in 1999 because of its diverse group of suppliers. But this time, he sensed a big change in the attitude toward U.S. buyers.
"The Houjie show has really grown, but from an American standpoint that market is really geared for the domestic Chinese market," he said, noting that many companies couldn't even readily quote export prices. "As the dollar keeps getting weaker, they see their opportunity in selling to a virgin market that doesn't care about pricing."
Doug Ricks, president of accent and occasional furniture specialist Furniture Classics, said he has been to the Dongguan show and others in south China for the past four years.
However, he plans to scale back his attendance because he believes the shows are unpredictable in styling. He said many of the products were styled and scaled for the China market, a factor that will encourage him to shop more shows in Europe in the future.
The 20th International Famous Furniture Fair here will be held Sept. 6–10.
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Dongguan Fair tilts toward home
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