In recent times, news about the furniture export industry reaching a turning point has been circulating frequently. However, it's also reported that the decline in furniture exports this year is not as severe as previously thought. The author interviewed Zhu Changling, chairman of the China Furniture Association, who stated that there isn't an actual "turning point" in furniture exports. However, this year marks another period of negative growth after the first decline in 2009. This situation is pushing furniture companies to shift their focus toward domestic sales.
**Furniture Exports Fell Twice**
According to Zhu Changling, the output value of furniture exports in the first half of this year was $24.614 billion, down 5.83% compared to the previous year. This marked the second instance of negative growth since 2009. Despite this, in August, the export value reached $4.567 billion, showing a 16.73% increase year-on-year. As a result, the total exports from January to August amounted to $33.441 billion, which only declined by 1.33% compared to the same period last year.
Zhu explained that China remains the world's largest furniture exporter, with an annual export value of around $50 billion. Last year alone, exports reached $53.1 billion, up 6.3% from the previous year. Most of these exports go to the United States and the European Union, which together account for more than half of the total. The decline in exports to these two major markets is largely responsible for the overall drop in the first half of the year.
The reasons behind this year’s decline are multifaceted. First, the slow economic recovery in Europe and the U.S. has impacted demand. Second, manufacturing industries in these regions are returning home, affecting China’s export volumes. Third, rising labor costs in China have prompted many factories to relocate to countries like Vietnam. Lastly, some Chinese furniture companies have faced anti-dumping lawsuits in the U.S., further complicating export operations.
A representative from a Guangdong-based furniture export company shared that due to increasing labor, energy, and land costs, many Western companies have shifted orders to Vietnam, fueling its rapid growth in furniture exports. In 2013, Vietnam's wood product exports reached $5.7 billion, ranking sixth globally and second in Asia, with over 20% growth in U.S. exports.
**The Furniture Industry Enters the “Shift Periodâ€**
Zhu noted that while the idea of a turning point may be exaggerated, the furniture industry has indeed transitioned from high-speed to low-speed development. Over the past decade, the industry grew at an average rate of 30%, and China became the top furniture exporter in 2006. This year, the main business income of 4,859 large-scale enterprises reached 328.2 billion yuan, growing by 12.87%, while output increased by 4.30%. Profits rose by 17.32%, indicating a shift from quantity to quality growth.
Many Chinese furniture companies are now moving away from pure export or OEM (Original Equipment Manufacturing) models, aiming to boost profits and market space by focusing on domestic sales. Some have started building brands and developing their own channels. Wang Limin, a designer attending major furniture fairs annually, highlighted that China, as the world’s largest consumer market, offers immense potential, with an annual consumption capacity of around 500 billion yuan. This market is highly attractive for both domestic and international producers, making the domestic market potentially more promising than the export market.
Zhu emphasized that transitioning to domestic sales is feasible for export companies, as they already excel in producing popular European and American styles. However, they need to focus on channel development and customer service. Jiang Xuehai, head of EDIDASS’s domestic market, pointed out that the domestic market presents unique challenges, especially for companies shifting from order-based export models. A change in mindset—especially regarding branding and service awareness—is crucial.
**Transformation to Domestic Sales**
**Branding**
Recently, the number of furniture products labeled as “export to domestic†has grown in Beijing’s home market. Compared to long-standing local brands, export-oriented companies still lag significantly in brand recognition. While companies like Yihua, Yitong, and Fuyi have started opening independent stores and improving brand awareness, the industry acknowledges that brand building takes time. Export-to-domestic enterprises often enter the market later, requiring gradual improvement through consumer feedback.
**Building Network**
Moving from traditional exhibition participation and foreign orders to direct consumer engagement is a key challenge. Establishing a robust sales network is essential. Whether through independent stores or chain retail channels, furniture brands must invest in marketing networks during this transformation. Many areas outside Beijing’s Fifth Ring Road now host warehouse-style furniture sales points, offering affordable and quality products that attract consumers. Salespeople in these networks must also be trained to better recommend products.
**Agent or Foundry**
Many export-oriented companies lack brand visibility when entering the domestic market. To bridge this gap, some opt to represent well-known international brands, leveraging their global recognition to gain market share quickly. Others choose to work as OEMs for well-established domestic or imported brands, benefiting from established distribution channels and strong market demand.
Overall, the furniture industry is undergoing a significant transformation, shifting from export dependency to a more balanced domestic focus. This evolution requires strategic changes in branding, sales networks, and operational models.
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