In July, a significant number of Vietnamese processors saw their orders return, indicating that the global wooden furniture market is exhibiting signs of recovery.
Nguyen Quoc Khanh, chairman of the Handicraft and Wood Industry Association of Ho Chi Minh City (HAWA), stated on July 28 that businesses need to re-evaluate their product lines to bring growth back to Vietnam's wooden furniture export market.
In the last two months, the purchase of new, updated, and repaired homes has increased in the major import markets such as the United States and the EU, indicating an increase in demand for interior and exterior wooden products.
However, over the first six months of 2023, orders at timber processing companies fell by an average of 30 per cent, according to HAWA data.
Thien Minh Trade Co., Ltd.'s export sales have slowed, according to the company's vice president Tran Lam Son.
However, he stated, "We have already received orders from the German and Dutch markets. Also, in the US, our associates have depleted their stocks as consumers are resuming their shopping habits."
According to Son, consumers have changed their mind regarding purchases and the order quantity has decreased. The delivery time has also dropped to 45–60 days, rather than the 70–90 days seen previously. European buyers are placing a greater emphasis on product origin, and Americans prefer products from plantations priced between $300 and $750.
If it seeks out opportunities in new markets, Vietnam's timber processing industry can still return to the global market.
Tran Nhu Trang, a representative of the Swiss Import Promotion Programme (SIPPO), encourages businesses to seek out more opportunities in markets such as Australia, Canada, Japan, South Korea, and India, with a particular emphasis on the Middle East.
According to the Vietnam Trade Office in the United Arab Emirates, the annual growth rate of furniture demand in Gulf Cooperation Council countries exceeds 45 per cent. Consumers are interested in Vietnamese furniture; in the first four months of the year, Vietnam's exports of timber and furniture to the UAE surpassed $11 million, up 38 per cent from the same period in 2022.
"The industry must restructure its product segment to match the needs of each market," said Trang.
According to SIPPO data, market demand is shifting towards products made with novel wood materials, engineered wood (3D-printed wood), and timber that is entirely traceable.
Over the last three years, the industry has encountered difficulties as factories have had to reduce capacity and labour, with many businesses becoming insolvent and being forced to pay back their debts.
According to the General Statistics Office, the export value of timber and wooden products in the first half of 2023 is estimated at $6 billion, a decline of 28.8 per cent from the same period in 2022.
| ||Wood industry striving to regain growth momentum |
Having undergone numerous hardships, businesses in the wood industry are showing great resilience with a high level of adaption and flexibility to regain their growth momentum.
| ||Furniture export orders return but requirements higher |
While the demand for export markets remains low, the timber industry must increase its competitiveness to remain viable.