Wooden furniture, handicrafts exports show signs of recovery

Nguyễn Xuân Truyền, deputy director in charges of sales and marketing at Keico Company Limited, 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 US and Northern Europe, it is also eyeing exports to other markets such as Japan and South Korea, he added.

Visitors view handicraft products at the Vietnam ASEAN International Furniture & Home Accessories Fair held in HCM City from August 29 to September 1. Wooden furniture, handicrafts exports show signs of recovery. — VNS Photo

Phạm Văn Thuần, 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 VIFA EXPO in March, the company met with around 50 customers, of whom over 10 have signed purchase contracts.

“We have orders for until December."

Trần Ngọc Liêm, director of the Việt Nam Chamber of Commerce and Industry’s HCM City branch, said wooden products exports this year are down 26.2 per cent from the same period last year to US$7.2 billion.

Inflation and recession in many countries, especially some of Việt Nam’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 per cent year-on-year, higher than the country’s overall export growth rate, to $1.1 billion, with shipments to markets such as Turkey, India, Chile, Cambodia, Finland, and Norway seeing sharp rises, he said.

Trần Quốc Mạnh, vice chairman of the Việt Nam Handicraft Exporters Association, said exports began to recover in the second quarter of the year, with many enterprises having enough to exceed 50 per cent 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.

Online furniture sales up

Speaking at a seminar held on the sidelines of the Vietnam ASEAN International Furniture & Home Accessories Fair (VIFA ASEAN 2023) in HCM City on August 30, Nguyễn Thị Phương Uyên, head of marketing at Alibaba.com Việt Nam, said according to Statista Market Insights, the world furniture market is expected to maintain steady growth of 4.5 per cent annually to reach $932 billion in 2027 from $766 billion this year.

Việt Nam ranks among the world's five largest wooden furniture exporters, but it only accounts for 2.3 per cent of the market share, which means there is considerable room for Vietnamese firms to increase their market share, she said.

Global e-commerce furniture sales have been growing for the last couple of years, she said.

Last year overall global furniture sales reached $694.32 billion with e-commerce accounting for $387.7 billion or 55.8 per cent.

Looking ahead, e-commerce sales are forecast to reach $764.5 billion, or 82 per cent 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.

They also prefer classic designs and smart furniture/ multifunctional products that meet a variety of needs, she said.

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

Many Vietnamese firms, including Gia Nhiên Co., Ltd and Nguyên Phong Metal JSC have successfully exported their products via Alibaba.com, she added.