Vietnam’s furniture exports plummeted by 29% in the first half of 2023!
According to Vietnamese media reports on August 2nd, the Vietnamese Ministry of Forestry reported that the export volume of forest products from Vietnam in the first half of this year was about 6.42 billion US dollars, a year-on-year decrease of 28.8%. Among them, the export volume of furniture products was 5.96 billion US dollars, a year-on-year decrease of 29%.
Viforest Chairman Do Yuan Lap said that furniture companies are facing difficulties in exporting due to declining demand in major markets such as the United States, Japan, South Korea, China, the UK, and the European Union.
On the other hand, Vietnam is also facing two trade protection investigations initiated by the United States regarding plywood and kitchen cabinets. Lap stated that the long-term investigation has seriously affected plywood companies in Vietnam. This issue has caused American companies to shift to other markets for procurement.
Nguyen Liem, Chairman of Pingyang Furniture Association, said that companies face many difficulties, and many have had to reduce their business scale by 60-70%. Vietnamese manufacturers have very few export orders left, and most of them are small orders. He added that buyers, especially those in the United States, are no longer placing new orders due to high inventory.
Brian Beane, Director of Business and Product Development at Thinh Viet, a Vietnamese furniture manufacturer, said, “Many factories are currently operating in very difficult conditions.” He pointed out that he has heard that some factories have seen their business decline by approximately 60% to 70%. Our business has decreased by 25% to 30%, which is already very good
However, the Vietnamese furniture industry still has confidence in the future. A preliminary survey by the Handicraft and Wood Industry Association (HAWA) in Ho Chi Minh City found that Vietnamese furniture exports began to recover before the global furniture consumption season in July.
At the Vietnam Wood and Furniture Industry Forum held by HAWA in Ho Chi Minh City, Pham Phu Ngoc Trai, Chairman of Global Integration Business Consultants, said that the current reduction in export orders from Vietnam is temporary, and the furniture industry still has considerable growth potential in the next five to ten years.
It is predicted that global GDP will grow by 3% this year, while the compound growth rate of the world furniture industry is 4.5%. He said that according to Statista Market Insights, the world furniture market revenue will reach $766 billion in 2023 and is expected to reach approximately $932 billion by 2027. He added that Vietnam has become one of the world’s top five furniture exporting countries, highlighting its strong internal resources.
HAWA Chairman Nguyen Quoc Khanh also holds a similar view, stating that furniture companies are still actively restructuring production, streamlining operations to reduce costs, and seeking support from trade promotion agencies to explore new markets.
Vietnamese furniture brands are expanding into different export markets, especially in wealthy Middle Eastern countries such as Saudi Arabia and Dubai. Minh Duong’s manager Duong Minh Tue said that the company is looking for new customers in the Middle East region. She said that due to cultural and religious factors, the Middle East used to prefer classic, luxurious, and gilded products, so Malaysia had an advantage in design. However, the new generation of customers’ needs have changed and are accepting furniture with innovative designs. This brings opportunities for furniture companies in Vietnam
The export growth target set by the Vietnamese furniture industry this year is 2.5%, equivalent to $17.5 billion. According to data from the Vietnam Forestry Bureau, the export value last year was 17 billion US dollars.
In 2022, Vietnam replaced China as an exporter of furniture to the United States. Last year, Vietnam’s furniture exports to the United States increased by 7% to nearly $9.7 billion, while China’s exports decreased by 7% to about $8.5 billion, accounting for 28% of the entire market share.
And this year, according to data from the General Administration of Customs of China, furniture exports in the first half of 2023 reached 224.06 billion yuan, a decrease of 3.5%. Compared to Vietnam’s decline of over 30%, does China’s furniture export situation seem good?
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