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 Vietnam wooden furniture exports show signs of recovery

[Sep 28,  2023]

HO CHI MINH CITY: Wooden furniture and handicraft businesses are again getting export orders after a lull.

Nguyen Xuan Truyen, deputy director in charges of sales and marketing at Keico Co Ltd, which makes furniture and handicrafts from natural materials such as rattan and water hyacinth, said exports had dropped by nearly half last year due to the impacts of Covid-19, global inflation and Russia-Ukraine war.

¡°The situation has shown improvement in the last three months since European buyers have begun sourcing again.¡±

His company now exports around six containers of goods each month, double the volume it did at the beginning of the year, he said.

In addition to the key export markets of the United States and northern Europe, it is also eyeing exports to other markets such as Japan and South Korea, he added.

Pham Van Thuan, chairman and sales manager of MP Crafts Co Ltd, said the company faced difficulties earlier in the year, but the situation has been much better since May with many old customers returning to sign new orders.

It has also got new customers, he said.

¡°When it took part in Vietnam Asean International Furniture & Home Accessories (Vifa) Expo in March, the company met with around 50 customers, of whom over 10 have signed purchase contracts. We have orders until December.¡±

Tran Ngoc Liem, director of the Vietnam Chamber of Commerce and Industry¡¯s Ho Chi Minh City branch, said wooden products exports this year are down 26.2% from the same period last year to US$7.2bil.

Inflation and recession in many countries, especially some of Vietnam¡¯s key export markets, have seen customers tighten spending on furniture.

But there were signs of recovery in July, with exports rising by 2.8% year-on-year, higher than the country¡¯s overall export growth rate, to US$1.1bil, with shipments to markets such as Turkiye, India, Chile, Cambodia, Finland and Norway seeing sharp rises, he said.

Tran Quoc Manh, vice-chairman of the Vietnam Handicraft Exporters Association, said exports began to recover in the second quarter of the year, with many enterprises having enough to exceed 50% of their factory¡¯s capacity.

¡°Hopefully by the end of this year or early 2024 at the latest, exports will fully recover.¡±

With customers increasing requirements in terms of quality, competitive pricing and sustainability, firms need to improve their production capacity and productivity, and make products that are also environment-friendly and recyclable while still retaining their cultural aspects, he said.

¡°Many businesses and craft villages are indeed producing environment-friendly products, but more efforts are needed to meet the requirements of global markets,¡± he said.

Speaking at a seminar held on the sidelines of the Vifa Fair (VIFA Asean 2023) in Ho Chi Minh City on Aug 30, Nguyen Thi Phuong Uyen, head of marketing at Alibaba.com Vietnam, said according to Statista Market Insights, the world furniture market is expected to maintain steady growth of 4.5% annually to reach US$932bil in 2027 from US$766bil this year.

Vietnam ranks among the world¡¯s five largest wooden furniture exporters, but it only accounts for 2.3% of the market share, which means there is considerable room for Vietnamese firms to increase their market share, she said.

Global eCommerce furniture sales have been growing for the last couple of years, she said. Last year overall global furniture sales reached US$694.32bil with eCommerce accounting for US$387.7bil or 55.8%.

Looking ahead, eCommerce sales are forecast to reach US$764.5bil, or 82% of total sales by 2027, she said.

Searches on Alibaba.com for furniture products that are eco-friendly are up as customers are more aware and concerned about sustainability than ever, she said.

Firms need to understand market trends and invest in having their presence in eCommerce platforms to promote their products, strengthen brand awareness and seek new customers.

Many Vietnamese firms, including Gia Nhien Co Ltd and Nguyen Phong Metal JSC, have successfully exported their products via Alibaba.com, she added. ¡ª Viet Nam News/ANN

Source: vietnamnews.vn