Exports may be source of opportunity in downturn
As demand from the United States and Europe has declined, officials in China and Vietnam have encouraged furniture producers to target another important market - the one in their own backyards.
In China, it’s been no secret that the government is trying to boost its middle class through policies that encourage home ownership and that offer tax rebates for purchase of items like refrigerators and other appliances.
Chinese furniture makers have responded by producing and marketing more goods for the domestic market. Developers also have built large retail furniture malls in cities such as Shanghai, Beijing and Guangzhou, where they hope to reach millions of potential customers.
Himfr.com, a Chinese business-to-business search platform, recently posted an analysis that predicts a good bit of furniture also will be sold in rural areas, because “farmers’ living standards are growing faster than urban residents.” The report added, “The majority of the furniture market in the future must take farmers into account; their demand for furniture will be at an annual 20-30% increase.”
In Vietnam, furniture demand also appears to be growing. This is particularly true in fast-growing residential zones in Ho Chi Minh City, which also is a big area for furniture production.
“Furniture Producers Rebound on Growing Local Demand,” read a recent headline in Thahn Nien News. The article noted how furniture producers, instead of lamenting the slump in global demand, are seizing opportunity in their own domestic market.
For U.S. furniture suppliers, selling into these markets is tricky. In addition to style and scale, price is another consideration. But given the popularity of some western style furniture, many are already having success with exports.
Given the size of the global marketplace, those who haven’t already tried their hand at exports may want to consider China, Vietnam and other markets too. Otherwise, some of their own overseas suppliers may beat them to the punch.
Where do you see export opportunity?
Victor Pedraz commented:
With all my former European clients I am hearing very goods news because they too are on the 'new export' wagon which includes China, Russia, Most of Asia and the Emirates. We Americans are still flummoxed over the decline of retail in the US market while very few of us have taken the time to look closely at export. This apathy remains a typical American traditon. Get on the wagon Boys!
