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GLOBAL ISSUES AND CHALLENGES WORLD ECONOMIC UNCERTAINTY USAGE OF ICT INCREASE ROLE OF SERVICES ASEAN FREE TRADE AREA (AFTA) GLOBALISATION AND TRADE LIBERALISATION INDUSTRIAL MERGERS ABOLITION OF MULTI FIBER AGREEMENT (MFA) TRADE AGREEMENTS EMERGING OF CHINA AND INDIA’S ECONOMIC MIGHT NON TRADE MEASURES
CHALLENGES OF MALAYSIAN FURNITURE: The industry must quickly adapt, learn and foresee obstacles in the near future Malaysia designers, exporters and manufacturers must be capable to produce good furniture design, in order to increase the perceive value of furniture by the customers that need value-for-money furniture.
CHALLENGES OF MALAYSIAN FURNITURE: Standardization allows Malaysia to produce furniture products equivalent to other established standards products. New trends in marketing will be introduced to consumers, public health and safety will be safeguarded, high quality and value products are impetus to branding and help to move towards a higher targeted market.
CHALLENGES OF MALAYSIAN FURNITURE: To enable companies to produce and market the same quality product globally and help gaining entry to new markets. With a good lumber grading system capability the industry understands the importance of value adding Malaysia furniture products. This is done by adding esthetical values to the furniture design
STRATEGIES TO PROMOTE MALAYSIAN FURNITURE Participation in trade promotion activities related to furniture (e.g. Cologne Furniture Fair, MEBEL Russia, MIFF); To design the products to reflect market preferences; Strengthening the value added activities such as designing, packaging, marketing and distribution; Branding (one of the ways to increase competitiveness, and a means to differentiate the country and the products and services offered to the market); Malaysian companies should look at new and innovative ways to conduct business, in particular, companies should intensify the use of ICT and the internet to promote products and services as it is an effective means to reach global markets in situations where travelling is not possible (e.g. website, e- mail marketing, trade portal, e-market places, virtual trade exhibition).
STRATEGIES TO PROMOTE MALAYSIAN FURNITURE Maintain high values both in production, quality and business ethics; Focus on original design and functional furniture; Invest in R&D for innovative creation and marketing techniques Emphasis on establishing long term relationship; Target on medium to up market segment, where emphasis is on quality and not quantity
CASE STUDYFURNITURE MARKET IN THE UNITED KINGDOM
CASE STUDY – FURNITURE MARKET IN THE UK UK is a net importer of furniture. In 2006, UK imports of furniture increased by 6 per cent and Malaysia is one of the top exporters to UK. The UK household furniture sector is well established and mature markets. The furniture market in UK has become more fashion oriented, which demands more innovation in furniture, versatility and functionality to suit the changing of lifestyle. The trend to smaller houses has resulted in changes to the design of new homes. This has significant implications for the types of furniture being demanded by the consumers. Smaller size and more flexible types of furniture are highly demanded. Bedroom furniture is also a major area of opportunities.
CASE STUDY – FURNITURE MARKET IN THE UK Great opportunities can also be found with furniture parts and upholstered seating. Furniture that can be supplied by flat-packed is of interest to Malaysian exporters. It applies to children’s bedroom, home office and shelves, and storage units. Malaysian exporters can also tap the market segment for older affluent group in the UK. In 2005, 20.3 million people in the UK were aged 50 and over. This group is looking for products with built-in extras – such as reclining chairs. Malaysian exporters to the UK often being pressured by the lower/cheaper products from Vietnam and China. To compete, Malaysian exporters must maintain quality standard and keep up with the changing trends and enhancing designs of the furniture.
CASE STUDY – FURNITURE MARKET IN THE UK Outsourcing of UK production is providing opportunities for Malaysian exporters. However, the major opportunities lie in providing good value, highly designed products to meet the changing lifestyle need of modern UK households. Malaysian exporters should also be looking for opportunities to sell to big multiples such as B&Q, Home Base or even Tesco. Potential importers, eg: i) B&Q PLC (www.diy.com) ii) Focus Do It All (www.focusdoitall.co.uk) iii) Homebase (www.homebase.co.uk) iv) Tesco v) Wickes Building Supplies Ltd
CASE STUDY – FURNITURE MARKET IN SPAIN The Spanish market has undergone changes in furniture preferences. The trend is moving towards modern contemporary style, more practical and convivial furniture. For domestic furniture: Increasing demand for kitchen furniture. The main trend in terms of materials are stainless steel kitchen tops and wooden cabinets, designed with geometrical and simple lines. Contemporary dining table is characterised with simple lines in rectangular form. The demand is more on light colours, entirely made of wood or metal feet with glass on top. Increasing demand for all types of chairs and relax-seats. Rising demand for small furniture, comprising small and low tables for living room, shelves for DVD and other small cupboards.
CASE STUDY – FURNITURE MARKET IN SPAIN For office furniture: Increasing trends for hot-desking (shared facilities) office furniture Higher demands for meeting table due to increasing team work Increasing demands for ‘multiplan’ desk with addidtional levels for storage purposes The pricing can be divided into 3 categories – up market, middle market and low market. The prices of low market can be four times lower than the up market. Among Malaysia’s main weaknesses in the Spanish furniture market is the lack of awareness of Malaysian product
CASE STUDY – FURNITURE MARKET IN SPAIN Malaysian exporters must be aggressive in promotional efforts in Spain. Factors for successful market entry include: Awareness Pricing Effective marketing Quality products Innovations – designs, materials, functionality Improved products Compliance with EU Standard Potential importers: CONFORAMA (www.conforama.es) MOBLERONE (www.expomobi.com)
CONCLUSION The Malaysian Furniture Industry: must be aware of new standards and developments to stay ahead of competition must collaborate and exchange ideas, practices and collaboration within the business community domestically and internationally.
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