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Overview of Vietnam’s wooden furniture industry

Overview of Vietnam’s wooden furniture industry

Saturday 21, 05 2022
Vietnam's wooden furniture industry has overcome great challenges in the past time due to the impact of the Covid-19 pandemic, experiencing impressive growth results. The country has now become one of the world's leading countries in exporting wooden furniture with markets spanning 140 countries and territories.

Taking advantage of opportunities

Over the past time, although the world has had to deal with complicated developments of the Covid-19 epidemic, Vietnam's wooden furniture industry still experienced an impressive growth rate. Vietnam has now become one of the world's leading countries in exporting wooden furniture with markets spanning 140 countries and territories.

export value of wooden furniture

While in the period 2006 - 2010, the export value of wooden furniture and forest products of Vietnam was USD 2.8 billion/year, in the period 2011 - 2020 it increased to about USD 8 billion/year. In 2020 and the first months of 2021, facing the Covid-19 pandemic, wood and furniture processing and manufacturing enterprises responded to the epidemic strictly, implementing a reasonable production organization, improving technology, researching and creating products suitable for customers, so it had special advantages in the international market.

The export value of wood and wood products in 2020 reached USD 12.3 billion. In the first 8 months of 2021, the export of wooden furniture and wood products reached USD 10.4 billion, an increase of approximately 42% over the same period in 2020.

In particular, in the first 7 months of the year, the export of wood and wood products reached USD 9.5 billion, up 53.7% over the same period in 2020. This is an impressive growth in exports while many other industries were still facing difficulties.

Leading in export value was the US market with USD 5 billion, up 93.9% over the same period in 2020. Following was by China market with USD 814 million, up 27.1%; Japan with USD 704 million, up 17.2%; Korea with USD 453.1 million, up 12.8%.

Wooden furniture is the most promising item among exported wood products. In particular, the export turnover of kitchen furniture in the first 7 months of 2021 reached about USD 550 million, up 66% over the same period in 2020. Export turnover of bedroom furniture (mostly wooden furniture) in July 2021 reached USD 196 million.

In fact, in the past, the United States mainly imported bedroom furniture from China, but so far, Vietnam has surpassed China, becoming the largest supplier of bedroom furniture for the United States. The export value of bedroom furniture to the US market accounted for the highest proportion, reaching USD 991.4 million, up 69.8% over the same period in 2020.

Experts said that Vietnam's advantage in the wood and furniture export industry in recent years is due to having a safe production environment thanks to strict control of the Covid-19 epidemic while many countries had to suspend production and close factories. On the other hand, enterprises in the wood and furniture industry in Vietnam are able to identify the market well and take advantage of opportunities quite effectively.

The Vietnam Wood and Forest Products Association said that the rapid growth to markets such as the UK, Canada, France and Australia also contributes to boosting the export value of bedroom furniture in the coming time because the demand of these markets for bedroom furniture is at a high level. Accordingly, Vietnam is the sixth largest wood furniture supplier to France but accounts for only 4.5% of the total import value, which is quite low compared to the import demand of this market. Therefore, the opportunity to expand market share in France is huge for Vietnamese wooden furniture exporters.

The Vietnam Wood and Forest Products Association

Besides, the advantage from the EU-Vietnam Free Trade Agreement (EVFTA) has also helped Vietnam's wood industry increase its price competitiveness compared to similar products of its competitors.

Future forecast

It is forecasted that the global furniture market still has great potential with a compound growth rate of 3.75%. In 2020, Vietnam only accounted for 2.58% of the global furniture market, reaching USD 509.8 billion USD. By 2027, it is expected to reach about USD 650 billion.

According to the Government's plan for the development of the wood industry, by 2025, wood exports will reach USD 20 billion, domestic consumption will reach USD 5 billion. By 2030, the figure for wood export will reach USD 25 billion while that for domestic consumption will be USD 6 billion.

Government's plan

More than 80% of wood processing and preservation establishments have reached the level and capacity of advanced production technology; 100% wood and wood products are from legal wood materials.

The goal of Vietnam's wood industry is to achieve the export target of USD 20 billion, in which, Vietnamese enterprises must account for 60-70% of export turnover, 30% of export enterprises can create value-added products, and 20% of export value is ODM.

Source: vneconomy, consosukien

Compiled by VietnamCredit

 

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