Overview report about Interior Furniture Market of Vietnam (2015-2020)
The economy is growing steadily and the middle class is growing fast so Vietnam's furniture market is attracting many famous brands in the world. The furniture industry will have strong changes starting from the production shift from countries to Vietnam.
Furniture market: Attractive high-class export furniture segment
Mr. PARK YOUNGNAM - Managing Director in Vietnam of Dongsuh Furniture said: "After 5 years of exploring the Asian market, Dongsuh Furniture recognized the attractiveness of the Vietnamese market". That is the reason for Dongsuh Furniture to come to Vietnam earlier than planned, after invading China and Japan. Vietnam is the third market in Asia, after China, where Dongsuh Furniture is present.
It is also the attraction of the market that made King Mattress - funded by Casper, a well-known American mattress supplier, decided to bring Amando high-end mattresses in Vietnam combined with Korean furniture Dongsuh Furniture to distribute. in Viet Nam. Currently negotiating for cooperation.
The furniture market attracts thousands of participating businesses, including the most exciting high-end segment with names such as Pho Xinh, Nha Vui, Index living mall, etc. foreign brands because of the opportunity from the domestic furniture market of Vietnam.
Real demand and purchasing power of furniture industry per capita
According to Mr. Phan Dang Chuong - Deputy General Director of ERNST & Young Vietnam Limited, in the past 5 years, about 400,000 - 500,000 townhouses and high-class apartments have been born in Vietnam. On average, each apartment uses at least 1-2 hundred million dong for the interior, so there is less than 100,000 billion dong for this demand.
In addition to real estate, the strong growth of the furniture industry is also related to the formation of the middle class in Vietnam that has spread the aesthetics and demand of consumers. "Customers do not choose furniture as ordinary items but express their lifestyle, sophisticated aesthetic sense," Mr. Phan Dang Chuong shared.
In 2018 Vietnam spent nearly 500 million USD to import furniture, which is expected to continue to increase in the following years.
According to the sharing of representative of Eric Dinh, marketing director of Dongsuh Furniture, middle and high-end products have many price segments ranging from tens of million to nearly 400 million dong / product. In particular, the purchasing power of the price segment below 50 million VND accounts for 40% of sales of this business. And at the same time affirmed, the current furniture market has not been properly evaluated in terms of product value, many products have been raised from 3 to 5 times.
"The opportunity to experience a complete interior space for every Vietnamese family is almost a luxury. It is a challenge but Dongsuh Furniture's model of selling furniture online will completely change that. Buying goods online in Korea as a habit of the people, we believe that in Vietnam, we will do the same, especially before the explosion of IoT and e-commerce platforms in Vietnam. selling home furniture will help save significant costs and help all Vietnamese people have the opportunity to access the luxury furniture segment at an affordable cost "- Mr. Eric Dinh shared with reporters tablets.
Not only Dongsuh Furniture, other high-end brands distributed by Dongsuh Furniture also grow very high as the model of living furniture (sectional sofa) classroom furniture, office room with office chair samples.
With kitchen equipment, kitchen, Kohler, Rita Vo is one of the 10 largest distributors of this group. Mr. Vo Mau Quoc Trien - Chairman of the Board of Directors Rita Vo said that Vietnam is the third largest market in Asia, after India and China. Kohler products distributed by the company increase every year. Rita Vo currently has 7 stores (each store area is from 3,000 - 10,000m2) and will open more to reach 20 stores within the next 5 years.
Evaluating the market will continue to grow strongly, in the fourth quarter of this year, Dongsuh Furniture intends to open 3 more large-scale production factories and open two more stores in Ho Chi Minh City and Hanoi so customers can easier to position the brand and then gradually move to online.
In the plan to conquer Vietnamese consumers, in the next 5 years, this business will open 15-20 furniture stores in Vietnam. “We choose Vietnam as the center to explore the ASEAN market. When having a satisfactory partner, the development of the distribution system will be very fast, ”Mr. Park Young Nam affirmed.
What is the potential of Vietnam's furniture market today?
"Ignoring" the domestic furniture market
The development of the furniture industry in Vietnam is expected to grow steadily at a rate of 9.4% per year.
Also according to Dongsuh Furniture's analysis, the current Vietnamese furniture market is mainly export-oriented and leaving the yard open. Most of the domestic market is a playground for imported goods, originating mainly from China, Malaysia and Thailand.
Domestic consumption of wooden products remains weak
Partly due to the incorrect pricing of products in the domestic furniture market, as originally shared by Eric Dinh. Causing many families as well as consumers to wonder before going down, although in general, the quality of furniture in Vietnam is quite good.
Statistics show that Vietnam's domestic wooden furniture market only accounts for about one third of export turnover
With an average GDP growth rate of 6% per year, along with the development of construction and real estate sectors, the increase in household income will also help increase spending on goods and services. Interior.
The Ho Chi Minh City Fine Arts and Processing Association estimates that in 2018, the total domestic furniture consumption is estimated at about US $ 4 billion.
In the context that domestic companies are focusing on exporting, Dongsuh Furniture said that the furniture market in Vietnam is similar to South Korea 20 years ago, but this will be the first step for attracting foreign investor. Many international brands are planning to set up manufacturing plants, or seek opportunities to expand business in Vietnam when the tariff barriers on furniture and home decor are removed.
Enhance interior shopping experience to attract customers
Therefore, many companies in Vietnam have participated in the race of e-commerce and technology applications to improve shopping efficiency of customers.
A pioneer in the field of online furniture, Dongsuh Furniture brings a whole new shopping experience with diverse furniture products, fashionable and elegant colors, along with the promotion of focusing on design as well as description of details. verbatim honesty, making furniture shopping easier. Looking is mesmerizing, touching is coffee.
Smart interior market, the race is gradually heating up
Developed with the need to buy furniture online
Along with the development of science and technology, especially the industrial network 4.0, artificial intelligence (AI), connectivity of things (IoT) ..., is increasingly being applied in many fields and industries. different, bring convenience, increase labor productivity.
The price of furniture increased but it also led to the demand as well as the rigor in each customer's request.
Along with the general trend, a number of furniture manufacturing and trading businesses have also researched and produced many smart products and these products were quickly accepted and favored by consumers.
Many interior products are compact, multifunctional, suitable for many types of apartments and rooms. Meanwhile, restrictions on small area or tight space will no longer be noticed. In addition to being compact with multiple uses, the colors of these products are also very diverse, consistent with the diverse needs of consumers.
In addition, this product was not previously popular due to the habits and culture of Vietnamese consumers. Because it is a new product, Vietnamese consumers do not believe in product safety. Therefore, the market for smart furniture products does not develop for a long time in Vietnam.
However, in recent years, this furniture line has created a new consumer trend because of culture and consumer understanding are different from the past. In addition, consumer finance is also better, helping this product line to have more and more foothold in the market.
The trend of integrating digital technology into interior design
Interior "Modern - comfortable" customer priority
According to industry insiders, "modernity - comfort" are the two factors that are given top priority in making decisions on interior design choices. The attraction of these two factors can be clearly seen through consumer behavior towards the product.
Furniture collections catch the new trend
The integrated functions are the major plus points such as the Dongsuh Furniture brand has used leather sofas with integrated USB charging plug or magazine compartment, etc. for relaxing sofa models.
Regarding colors, the neutral colors such as natural wood color, gray, brown, white .... Not only helps dislodge the elegance, warmth but also cleverly creates striking contrasting shades of personality that show the unique personal impression of the owner.
Especially, this is also a color that expresses elegance, nobility but no less modern, sophisticated in accordance with the active life today.
The race against the modern interior market
Mr. Eric Dinh said that consumers now have a high demand for smart and modern furniture. However, because the environment of the house has different spatial designs, while the Company only offers mass products, which are general in shape, not "tailor-made" for each apartment, it does not meet all requirements. be in demand.
“The smart furniture market in Ho Chi Minh City is developing quite bustling. Currently, there are many competitors in this market”, said Eric Dinh.
Typically, the newly launched LED bed of Dongsuh Furniture has been warmly welcomed.
Worries about Chinese goods "disguised" as furniture for export
Meanwhile, according to Mr. Eric Dinh - marketing director of Dongsuh Furniture, in order to protect the domestic wooden furniture market as well as export, the customs sector must closely monitor Chinese wood products into Vietnam in what form, which is a component. or selling components or raw materials to impose proper tax, avoiding the situation of "disguising" Vietnamese goods for export in order to enjoy tax incentives like Chinese flooring products and anti-dumping prices. Therefore, Vietnamese authorities must be more strict in considering and issuing C / O. At least that item must be over 70% of the value created in Vietnam to be granted a C / O, but it is impossible for an item of only 10% or 20% of the value created in Vietnam to issue a certificate of origin of Vietnam. .
Managing interior furniture market: It's hard to ... go to heaven
White - black mixed ... when shopping furniture
Just type the phrase "buy furniture online", in just 0.61 seconds, there were nearly 7.5 million search results with a full range of products, models, from famous brands, to The most popular brands, meeting the diverse needs of consumers.
However, due to the large number of furniture manufacturers and suppliers, with a variety of designs, types and origins of furniture, the management of this market is very difficult for businesses. management. This leads to the situation of fake goods, fake goods, poor quality goods that still have land on the market, affecting the interests of consumers and society in general.
Sharing with the Vietnam Investment Review reporter, Mr. Park Young Nam shared that, currently, on the market, many small furniture stores in Hanoi, or Ho Chi Minh City have introduced as distributors of many big brands. , but when customers make product certification requirements, they cannot provide it, or require VAT invoices, many of them cannot provide.
In another perspective, Mr. Pham Ngoc Cuong, Sales Director of Nha Xinh Furniture Construction Joint Stock Company said that, in fact, in order to distinguish real fake furniture, it is still difficult for people in the profession. Do not mention consumers. Because there are many different types of products, interiors, different identities and no one knows all the products.
Sharing the same view, Mr. Dinh Hoang Quan (Eric Dinh), Director of Makerting YN Vietnam, a genuine production and distribution unit of Dongsuh Furniture brand in Vietnam said: “If I go to buy furniture for decoration, Besides the field of furniture - my specialty, other products are difficult to choose because there is no experience, knowledge and lack of information about the product, especially about the product material as well as the origin. This is harder for the average consumer. ”
... So difficult to manage quality furniture
Meanwhile, sharing with reporters of the Investment Review, a representative of An Cuong Wood Joint Stock Company, said that this is a very sensitive issue. Furniture is very cheap, but consumers should carefully understand about businesses, distributors of prestigious products, big brands with State protection certificates, or other certificates. about the product. By big furniture brands, it is not foolish to lose the "god".
Users are increasingly strict in interior decoration
And with many good signals in macroeconomics, foreign investment flows, the development of the real estate market can predict that the construction industry will continue to be the leading growth industry for more than 10 years. past year.
In addition, the average population growth rate of Vietnam is 1.2 - 1.5% / year and the average urban growth rate is 3.4% / year ... Therefore, the potential to increase Head of domestic housing segment is still very large, office demand is increasing sharply.
Along with the increasing demand for civil construction, consumers' tastes are also more stringent. For example, with interior items as floor carpets, at present, most apartments tend to use carpets, at least spread one sheet in the living room. Consumers have gradually updated their home décor with carpets, so finding and buying rugs in the home is also as important as buying a sofa, a bed, a dressing table, etc.
Five years ago, consumers easily accepted the use of Chinese origin beds with low price and not high quality. However, now with the new consumer trend, consumers are turning to more luxurious wooden beds. Especially taking into account factors such as health safety and environmental friendliness.
In fact, consumers often prefer to choose a modern wooden vanity table imported from Korea because of the superior style and design. The products all meet E1 standards of Korea - quality assurance standards for consumer health.
In addition, the Japanese style tea table sofa line is more selected by customers. The attraction of this tea table is compact, sophisticated, foldable and when combined with the living room sofas, combined with the light will see the space also more luxurious.
Designed to accentuate interior style
The new trend now, business owners, homeowners also pay attention to the convenience and decorative accents harmonious colors for their buildings and homes. The color of the house does not stop at the color of wall paint, ceiling color, floor, but architects also use other furniture such as carpets, sofas or beds ... to highlight the style, the personality of the house owner.
And in that new design trend, decorative cabinets are chosen as a popular color accent in homes, especially with modern living room or office interior architectures or young families. - Usually choose an apartment to live in.
Facing that fact, the market of supplying furniture with sleepy patterns like wooden wardrobe models in recent years has also become very exciting. Common wood materials that customers often choose are MDF, MFC, PB industrial wood because of their high durability. In addition, natural wood products such as rubber wood are also very popular because of their low price, firm texture and beautiful colors.
Dressing tables also become indispensable interior products for young people. The trend away from mini vanity models has moved to modern vanity models with wider dimensions. Products are often sold with makeup models.
WOODEN FURNITURE MARKET: HOME RENTAL
Disorder price of home furniture
"If not the people in the profession, want to buy Chinese furniture beware of buying the wrong goods called Chinese furniture, because the domestic carpentry establishment sells to the market to follow Chinese goods." Just at the beginning of Ngo Gia Tu's interior "market", Mr. Phuong reminded him. Currently these items "Vietnamese soul, Chinese leather" are priced at 20% to 40% cheaper than genuine goods.
Chinese furniture is flooding the domestic market, although it has only entered Vietnam market about 3 years ago. According to the Chinese furniture business, the market is smoking Taiwanese and Chinese wooden furniture. "No one imports Taiwanese timber to sell in Vietnam market, all are Chinese wood products," said an owner of a Chinese import establishment.
Taiwanese timber companies are moving their factories to China, due to cheaper labor costs and easier shipping for export. The "labeling" imported from Taiwan only to hit the brand's consumer psychology. "Taiwanese goods are better than Chinese goods after all ...!", He shrugged. The majority of Chinese wooden furniture is imported mainly from Guangdong and Guangxi provinces of China.
According to the Ministry of Trade, in 2005, China provided 53% of furniture for the Vietnamese market, with a total import turnover of US $ 16 million. Chinese wooden furniture enters Vietnam according to the official quotas imported by Vietnamese enterprises for domestic distribution. Unofficial roads are bought by traders to China and through Lang Son border gate. The business of exporting wooden furniture calls importers by small quota "hitting fruit". They often follow the orders of the building, they get the price and go to the root of the goods in China to find the lowest price to order. In these trips, the traders also took advantage of the survey of new and unique models to hit Vietnam.
“If hit correctly, the profit of each shipment is up to 50%. Conversely, if the judgment is wrong, the imported goods are "out of fashion", hugging the number of inventories, they must suffer losses to recover capital. "
Wood furniture imported to Vietnam is distributed by the traders at different prices, the retail price is usually 15% higher than the price for distributors. Usually, every importer has their own showroom system to display products. Imported furniture is also distributed to interior stores across the country, in Ho Chi Minh City focusing on two "markets", Ngo Gia Tu (District 10) and Cong Hoa (Tan Binh).
Why Korean wooden furniture sucks?
Korean furniture has the advantage of cheap price, beautiful design, fashion and quality than the furniture from China. However, according to Eric Dinh, due to the 40% import tax on raw materials to Vietnam, plus 10% value added tax (VAT) excluding shipping costs, the price of goods sold in Vietnam market. Men are usually 5 to 10% more expensive than Chinese models. From bed, wardrobe, TV shelf, dining table set is priced from 2 million to 9 million, depending on size and style. Some stores do not retail but sell in sets including beds, wardrobes, dressing tables ... with prices from 14-19 million VND / set, depending on type and size.
Korean furniture is mostly made from MDF artificial wood and processed rubber wood. For example, exported sofa samples are packed in assemblies, assembled at stores in Korea for sale in sets.
Wooden furniture is racing to gain domestic market share
According to some enterprises in the industry, in the past, the domestic wooden furniture only focused on antique counterfeit and carved wood products. The prices of these items are quite high, only suitable for up-to-date customers with the classic and large house style.
Currently this trend is decreasing. Customers are getting younger and younger, preferring modern, block-style, simple and convenient boxes suitable for modern houses with paint colors and youthful designs. Businesses are aiming to sell products, with specific uses and utilities, rather than selling raw materials and costs as before. Products appearing on the market are designed in sets to improve the usability and utility for users.
For example, the living room set includes sofa tables and chairs, television shelves. The bedroom set includes a bed, a nightstand, etc. These products are easily removable, with many different functions.
"Customer care is also focused". Mr. Eric Dinh said that the company has provided free delivery within Ho Chi Minh City and Binh Duong inner city. In addition, each product packaging comes with detailed instructions for use and assembly.
Consultation on display, preservation and assembly on-site at the request of customers is also the way that furniture manufacturing enterprises are applying to better return to the domestic market. Products are warranted for 1 year or more, 100% flexible return and warranty policy for the first 7 days. The sales from the domestic market of the company has reached nearly 10 billion / year.
A series of furniture supermarkets were born with many different brands, not to mention the shops specializing in selling imported furniture are competing fiercely in the market. Collaborating with suppliers of raw materials in production, promoting quality control, order fulfillment progress and reducing input prices are also ways that businesses are taking steps to be able to compete with furniture. China.
Even businesses specializing in handicrafts have started to focus on the interior business by associating with other construction companies. For example, Lac Phuong Nam Company cooperates with Nha Dan Construction Company to make interior decoration items according to specific orders of the owner. Upon receiving the order, the company will send people to survey depending on the type of house, the company will offer different decor patterns. Lac Phuong Nam furniture is quite diverse, targeting different types of customers to penetrate better. Wooden items such as tables, chairs, shelves, bars are lacquered to match the colors and designs of each office.
Summary of Vietnam furniture market report in the last 2 years
Vietnam's home furniture market is forecast to have positive changes in the next 5 years. According to analysts, Vietnam is an ideal country for furniture companies to build furniture factories and to invest and export furniture.
Up to now, interior products from Vietnam have been exported to more than 120 countries and territories, of which the main markets are South Korea, USA, UK, Canada, Australia and Japan. are extremely demanding markets. Vietnam's furniture is also exported to China - a country that is known as the world's factory.
For the domestic interior market, Vietnamese consumers have a preference for wooden furniture products, which has created conditions for the industry to produce interior and exterior products in Vietnam. Nam continues to grow strongly and is expected to keep going up in the coming years.
Compared to other major furniture exporters in the world, the Vietnamese furniture industry holds a production advantage, with the potential to expand its global market share due to its natural resources and long coastline. Convenient for waterway distribution channels.
This impressive growth has been contributed largely by the increasing demand from North America, Europe and the Asia-Pacific region, even to Middle Eastern and Indian countries.
Moreover, with increasing urbanization and rising demand for housing, apartments and buildings, Vietnam's home furniture market is expected to grow during the forecast period.
The segment of Vietnam's furniture market
According to statistics, the revenue of the kitchen or dining room furniture segment in the Vietnamese furniture market is valued at US $ 0.6 billion in 2015. For the global furniture market, the home furniture segment kitchens also accounted for the largest share of revenue in the US furniture market in 2015.
See more: Trends of interior design cheap dining room 2020
The wood processing industry in Vietnam also recorded impressive growth and will continue to grow during this period. Specifically, according to the Mordor Intelligence data, in 2017, the export value of wood, wooden furniture and non-timber forest products in Vietnam reached about US $ 8 billion, of which the export value of furniture was valued at 7, 6 billion USD. In 2018, the export value of timber, wooden furniture and non-timber forest products was US $ 9 billion. Wood and furniture has become the sixth largest export item in Vietnam, accounting for 6% of the world market share.
Market reports for Vietnam's export and import timber industry 2020
The strong export growth of the industry is thought to be the result of free trade agreements (FTAs) and most recently (EVFTA) of Vietnam and the country, partner organizations, this is the main has provided opportunities for furniture and other wood product manufacturers to enhance their competitiveness and increase sales.
But furniture and other wood products manufacturers face a major challenge: the shortage of raw materials in the context of closed forests, deforestation and other measures being taken by countries. Different participants made to protect their timber resources.
Competition in Vietnam's wooden furniture market
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ABOUT THE AUTHOR
Dongsuh Furniture was founded in 1973, after nearly 50 years of development, today Dongsuh Furniture has become one of the leading furniture companies in the Asian region and belongs to the top 3 in Korea. Not just cheap furniture manufacturer serving domestic demand, Furniture Dongsuh also boost exports to countries around the world. In 5 years the annual growth rate of Korean furniture Furniture Dongsuh growth above 200%.
We provide the best report for furniture industry in Vietnam, Korea and around the world, also for market share of furnishing home decor products with the best judgement.