In recent times, news about furniture exports reaching a turning point has been circulating frequently. Reports suggest that the furniture industry's decline this year is also on the decline. During an interview with Zhu Changling, chairman of the China Furniture Association, he clarified that there is no actual "turning point" in furniture exports. However, after the first negative growth in 2009, another decline occurred this year. This reality signals to furniture companies that shifting from export to domestic sales is becoming urgent.
Furniture exports fell twice
According to Zhu Changling, the value of furniture exports in the first half of this year was $24.614 billion, representing a 5.83% drop compared to the previous year. This marks the second consecutive negative growth since 2009. Despite the poor performance in the first half, August saw a significant rebound, with exports reaching $4.567 billion, up 16.73% year-on-year. As a result, the total value of furniture exports from January to August reached $33.441 billion, declining only 1.33% year-on-year.
Zhu explained that China remains the world’s largest furniture exporter, with an annual export volume of around $50 billion. Last year, exports totaled $53.1 billion, marking a 6.3% increase. The main markets for Chinese furniture are the United States and the European Union, which together account for more than half of the total exports. The decline in these two key markets contributed significantly to the overall decrease in exports during the first half of the year.
Zhu identified several factors behind the decline in furniture exports this year. First, the lack of economic improvement in Europe and the U.S. is a major cause. Second, manufacturing industries in these regions are returning, impacting China's export volumes. Third, rising labor costs have prompted many factories to move production to countries like Vietnam. Lastly, the U.S. has initiated anti-dumping lawsuits against some of China's wooden bedroom furniture exports.
An executive at a Guangdong-based furniture export company mentioned that due to increasing labor, energy, and land costs, many European and American companies have shifted orders from China to Vietnam, fueling strong growth in Vietnam's furniture export sector. In 2013, Vietnam's wood product exports reached $5.7 billion, ranking sixth globally and second in Asia, with U.S. exports growing by over 20%.
The furniture industry enters the "shift period"
Zhu noted that while the idea of a turning point in furniture exports may seem dramatic, the industry has indeed transitioned from high-speed growth to a slower phase. He described this as entering a "shift period." During the 2001–2010 decade, the furniture industry grew at around 30% annually, experiencing rapid development. Since 2006, China has surpassed Italy to become the world's top furniture exporter. In the first half of this year, the main business income of 4,859 large-scale enterprises reached 328.2 billion yuan, rising 12.87%, while output increased by 4.30%. Profits rose by 17.32%, indicating a shift from quantity-driven to quality-focused growth.
Industry insiders said that many Chinese furniture companies are gradually moving away from export or OEM (original equipment manufacturer) models. To improve gross profit and market space, they are shifting toward domestic sales, transitioning from pure manufacturing to design and production. Some have even begun building their own brands and channels. Wang Limin, a designer who regularly attends the Guangzhou and Shanghai Furniture Fairs, mentioned that China, as the world's largest consumer market, is expected to have an annual consumption capacity of 500 billion yuan. This market attracts both domestic and foreign producers, offering greater potential than the export market. For export-oriented companies used to the OEM model, entering the domestic market is no longer just a verbal commitment.
Zhu emphasized that for export-to-domestic transformation, issues related to product design and manufacturing are not major concerns. The popular European and American styles are exactly what these export companies excel at. What matters most is channel construction and customer service, areas that need urgent attention. Jiang Xuehai, head of EDIDASS's domestic market, pointed out that the domestic demand market presents greater challenges, especially for companies transitioning from order-based export models. The most important change lies in mindset, including branding and service awareness.
Transformation to domestic sales
Branding
In recent years, the number of furniture products labeled as "export to domestic" has grown in the Beijing home market. Compared to long-established local furniture companies, export firms still face a significant brand gap. A reporter found that companies like Yihua, Yitong, and Fuyi have opened independent stores or entered retail chains, improving their brand awareness. An executive from Yitong International Home stated that direct sales through independent stores helps maintain pricing power and R&D control. However, the industry acknowledges that brand building cannot be achieved overnight, and it remains a challenge for many companies making the transition. A brand representative noted that export-to-domestic enterprises entered the market later, and brand influence needs gradual improvement through consumer feedback.
Building network
Unlike the previous model of participating in exhibitions and taking orders from foreign clients, today's domestic market transformation requires furniture companies to go directly to consumers. Establishing sales channels is crucial for this transition. Whether building independent stores or joining home store chains, the marketing network must be prioritized. In recent years, warehouse-style furniture sales points have emerged outside Beijing's Fifth Ring Road, offering affordable and high-quality options that attract many consumers. Additionally, salespeople in these networks play a key role in recommending products effectively.
Agent or foundry
As many export-oriented furniture companies shift to the domestic market, they often lack brand recognition and visibility. To quickly gain market share, some companies opt to represent international brands with high global recognition. These brands can help them capture attention and build credibility. On the other hand, the foundry model allows manufacturers to leverage their large-scale production capabilities and efficient processes to produce OEM products for well-known domestic or imported brands. This approach benefits from established distribution channels and stable market demand, helping to absorb the production capacity of transforming companies.
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