{"id":10691,"date":"2024-11-08T09:41:42","date_gmt":"2024-11-08T02:41:42","guid":{"rendered":"https:\/\/vietnamsourcingexpo.vn\/?p=10691"},"modified":"2024-11-08T13:38:31","modified_gmt":"2024-11-08T06:38:31","slug":"exploring-vietnams-furniture-industry","status":"publish","type":"post","link":"https:\/\/vietnamsourcingexpo.vn\/en\/exploring-vietnams-furniture-industry\/","title":{"rendered":"Exploring Vietnam’s Furniture Industry: Key Opportunities, Challenges, and Future Trends"},"content":{"rendered":"
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Viet Nam International Sourcing Expo is a trusted destination for Furniture businesses<\/figcaption><\/figure>\n

According to the Center for Industrial Studies (CSIL), Vietnam has advanced from 13th to 6th place among the world’s largest furniture producers by value from 2003 to 2023.<\/span><\/p>\n

In addition, the industry is growing steadily every year. According to Mordor Intelligence, the size of the Vietnamese furniture market is estimated to reach 1.47 billion in 2024 and is expected to reach 1.92 billion USD in 2029, growing at a CAGR of 5.33% during the forecast period (2024-2029).<\/span><\/p>\n

So what makes Vietnam’s furniture industry grow rapidly and become attractive to exporters? To better understand, Vietnam Sourcing Expo will help you determine the strengths, weaknesses, opportunities and challenges of the industry through SWOT analysis.<\/span><\/p>\n

Strength<\/b><\/h2>\n

Tariff situation for furniture \u201cMade in Vietnam\u201d<\/b><\/h3>\n

As of June 2024, US tariffs will still apply directly to furniture products manufactured in China.<\/span><\/p>\n

In contrast, Vietnam is not affected by the ongoing trade war in the US. Exporting furniture from Vietnam to the US will be less expensive as tariffs are reduced.<\/span><\/p>\n

For the European Union, furniture imports from Vietnam to the EU are currently at 0% after the EU-Vietnam Free Trade Agreement came into effect in August 2020.<\/span><\/p>\n

Large network of foreign owned furniture factories<\/b><\/h3>\n
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Coppel Group (Mexico) is looking for Interior & Exterior supply sources in Vietnam<\/figcaption><\/figure>\n

Foreign-owned and managed factories play an important role in the Vietnamese furniture industry. As of 2023, there are about 1,500 factories exporting furniture from Vietnam, of which 30% are FDI (foreign direct investment) establishments. These factories account for about 40% of Vietnam’s total furniture export value in 2023.<\/span><\/p>\n

FDI furniture factories are a suitable starting point for foreign buyers who are new to the Vietnamese furniture market. The reason is that this group’s strengths are export experience, large production scale and strict quality control procedures.<\/span><\/p>\n

An established industry<\/b><\/h3>\n

As mentioned above, the steady inflow of FDI into the industry is a sign of the attractiveness of the sector.<\/span><\/p>\n

Another sign of stability is that well-known international furniture companies such as Ikea, Ashley furniture have been sourcing from Vietnam for many years.<\/span><\/p>\n

The growth of the furniture industry in Vietnam is by no means a fluke. Vietnamese furniture manufacturers are well versed in export processes, quality control needs and international market expectations. This translates into streamlined production processes, making it easy for exporters to navigate the industry.<\/span><\/p>\n

Manufacturers are fully export oriented<\/b><\/h3>\n

Vietnamese export-oriented furniture manufacturing companies will often focus 100% on exports. They will not produce for the domestic market, unlike China, where the domestic market is becoming increasingly important.<\/span><\/p>\n

By focusing solely on exports, Vietnamese factories tend to have an easier time accessing foreign market standards.<\/span><\/p>\n

Opportunities<\/b><\/h2>\n

2 key industries in Vietnam that match market demand<\/b><\/h3>\n
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Rattan furniture is currently a global trend.<\/figcaption><\/figure>\n

Wooden home furniture is valued at US$275.7 billion by 2023, the global wooden furniture market is on track to reach US$413.5 billion by 2032, with a steady growth rate of 4.61% expected over the next decade. As one of the largest wooden furniture producers in the world, the Vietnamese furniture industry is set to grow even stronger with this growing demand.<\/span><\/p>\n

As for rattan furniture, the trend of using rattan products has increased exponentially over the past few years. Consumers today have a preference for craftsmanship, price, and environmental friendliness.<\/span><\/p>\n

An ever decreasing attractivity of China for furniture<\/b><\/h3>\n

China remains the world\u2019s No. 1 furniture exporter. However, there are some signs that this supply chain is limited. As of June 2024, Vietnam will remain the largest furniture exporter to the United States (it has surpassed China since 2020).<\/span><\/p>\n

Tariffs and a shift to domestic market development may also explain the declining attractiveness of furniture from China.<\/span><\/p>\n

As the second largest furniture exporter in Asia, Vietnamese furniture is sure to benefit from the opportunity that China is currently leaving.<\/span><\/p>\n

Weaknesses<\/b><\/h2>\n

Reliance on import<\/b><\/h3>\n

Despite being a tropical country, Vietnam\u2019s furniture industry caters to foreign buyers\u2019 preferences for furniture made from Western woods such as walnut, oak, ash or pine. Therefore, manufacturing enterprises will have to rely on wood supplies from China.<\/span><\/p>\n

However, Vietnam\u2019s furniture industry remains one of the least dependent on China. The industry remained stable during the first wave of Covid in China, although trade between the two countries was largely halted at that time.<\/span><\/p>\n

Labor force remains untrained<\/b><\/h3>\n

The Vietnam Labor Force Survey 2022 from the General Statistics Office provides an overview of the labor market. As of 2022, only 13.3 million employed individuals had technical training (equivalent to 26.3% of the total workforce) and only 11.7% of the total workforce had a university degree.<\/span><\/p>\n

But this situation is likely to improve in the near future.<\/span><\/p>\n

Threats<\/b><\/h2>\n

High dependence with the global market<\/b><\/h3>\n

The furniture industry also depends heavily on foreign investment for its development. These FDI furniture factories have accounted for nearly 40% of the total furniture export value from Vietnam.<\/span><\/p>\n

Tariff risks<\/b><\/h3>\n

In 2021, prior to the currency investigation by the United States, Vietnam demonstrated that it was not engaging in currency manipulation to gain an unfair advantage for its exports. This clarification helped to reinforce Vietnam’s commitment to fair trade practices and maintain its positive standing in the global market.<\/span><\/p>\n

Conclusion<\/b><\/h2>\n
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Viet Nam Sourcing Expo will return soon in 2025<\/figcaption><\/figure>\n

Hopefully this article has helped you better understand the Vietnamese furniture industry, its strengths, weaknesses, opportunities and challenges.<\/span><\/p>\n

And if you are looking for new partners, to have a stable market, bringing high profits. The Vietnam International Sourcing Expo chaired by the Department of European – American Markets, Ministry of Industry and Trade, will support businesses to register to participate, go deeper into the global supply chain, production, adapt to the trend of international integration.<\/span><\/p>\n

This is an exhibition that has received great attention and cooperation with the participation of large corporations in the furniture industry such as Ikea (Sweden) … along with hundreds of businesses, international purchasing delegations from more than 25 countries and territories.<\/span><\/p>\n

The exhibition has practical significance, supporting the participating Furniture business community, expanding the production and consumption chain, and promoting quality and reputable Vietnamese furniture products to the international market.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

According to the Center for Industrial Studies (CSIL), Vietnam has advanced from 13th to 6th place among the world’s largest furniture producers by value from 2003 to 2023. In addition, the industry is growing steadily every year. According to Mordor Intelligence, the size of the Vietnamese furniture market is estimated to reach 1.47 billion in […]<\/p>\n","protected":false},"author":1,"featured_media":10699,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[55],"tags":[],"class_list":["post-10691","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-industry-news"],"_links":{"self":[{"href":"https:\/\/vietnamsourcingexpo.vn\/en\/wp-json\/wp\/v2\/posts\/10691"}],"collection":[{"href":"https:\/\/vietnamsourcingexpo.vn\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vietnamsourcingexpo.vn\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vietnamsourcingexpo.vn\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/vietnamsourcingexpo.vn\/en\/wp-json\/wp\/v2\/comments?post=10691"}],"version-history":[{"count":3,"href":"https:\/\/vietnamsourcingexpo.vn\/en\/wp-json\/wp\/v2\/posts\/10691\/revisions"}],"predecessor-version":[{"id":10737,"href":"https:\/\/vietnamsourcingexpo.vn\/en\/wp-json\/wp\/v2\/posts\/10691\/revisions\/10737"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vietnamsourcingexpo.vn\/en\/wp-json\/wp\/v2\/media\/10699"}],"wp:attachment":[{"href":"https:\/\/vietnamsourcingexpo.vn\/en\/wp-json\/wp\/v2\/media?parent=10691"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vietnamsourcingexpo.vn\/en\/wp-json\/wp\/v2\/categories?post=10691"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vietnamsourcingexpo.vn\/en\/wp-json\/wp\/v2\/tags?post=10691"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}