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Furniture industry vietnam summary & global market outlook

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Furniture industry vietnam summary & global market outlook

  1. 1. Furniture Industry - Vietnam & Global Market OutlookEquatorial Hotel – Ho Chi Minh City28 March 2013DAM HUY BINHBusiness Development DirectorDun & Bradstreet Vietnam
  2. 2. AGENDA• Vietnam Timber and Furniture Industry• Global Furniture Market Outlook• US: Opportunities & Challenges for Vietnam Wood Furniture Exporters• Solutions For Development of Vietnam Furniture Export 2
  3. 3. Vietnam Timber & Furniture Industry 3
  4. 4. VIETNAM TIMBER AND FURNITURE SUMMARY• Processing & Manufacturing: o 2,500 domestic invested enterprises and 400 FDI enterprises o 1.796 enterprises in South East Area, Dong Nai (827), Bình Dương (762), Ho Chi Minh (207)• Employment contribution: 300,000 persons• Global export coverage : Over 100 countries• Export (90%); home consumption (10%)• Material for manufacturing and export: Over 80% import from overseas Source: MOIT, GSO 4
  5. 5. VIETNAM IMPORT OF TIMBER Timber Import Value in the past 5 years Key Import Markets USD Million USD Million1,600 1,500 285 3001,400 1,362 2501,200 200 196 1,098 1,147 2001,000 905 150 800 89 86 100 62 50 600 50 31 28 26 400 - 200 - 2008 2009 2010 2011 2012 Source: MOIT 5
  6. 6. VIETNAM EXPORT VALUE OF TIMBER ANDFURNITURE IN THE PAST 5 YEARS USD Million 4,670 5,000 3,955 4,000 3,436 2,829 2,598 3,000 2,000 1,000 0 2008 2009 2010 2011 2012 Source: MOIT 6
  7. 7. VIETNAM EXPORT OF TIMBER AND FURNITURE2012 Export turnover: US$4.67 Billion - 19% YOY Ranking in Worldwide Furniture Export: 6th in the world, 2nd in SEA Vietnam Key Export Market 2012 Other United Korea Countries, States of South, 13% America, 5% 39% EU, 14% Japan, 14%Source: MOIT China, 7 15%
  8. 8. KEY CHALLENGES• Product design competitiveness : o Weaker than China , Taiwan, Malaysia and Thailand o Monotonous, not diversified, so much dependent on foreign designs• Global competitiveness: have not appropriate plans and strategies of sales & marketing for world market penetration• Skilled manpower: o Lack of trained work force o Lack of professional designers for creating products of own styles o Lack of well trained and experienced marketing team thus losing profitable sales opportunities.• Uncontrolled production costs due to unsustainable energy price (electricity, coal,…) , increase of minimum wage• Requirement for certificate of origin for legal timber as US LACET Act, EU FLEGT regulations from markets of high responsibility in society and environmentSource : MOIT, GSO, CSIL 8
  9. 9. GLOBAL FURNITURE MARKET OUTLOOK 9
  10. 10. GLOBAL FURNITURE INDUSTRY World Furniture • China, Poland, Vietnam, Malaysia Production World Major Export • China, Italy, Germany, Poland, Vietnam, US, Canada, Countries Malaysia, MexicoWorld Major Imports • US, Germany, France, Japan, UK, Canada Countries • EU, Norway, Switzerland, Iceland, North America: 46% World Consumption • Asia Pacific: 44%Source: WTO, CSIL (Centre 10for Industrial Studies)
  11. 11. GLOBAL FURNITURE INDUSTRYCommon furniture products: Wood and metal household, office, and institutional furniture; mattresses; wood kitchen cabinets; commercial showcases and shelving USD Million Hong Italy Kong2012 sales revenue gained Samson Holding 423.44from Global FurnitureBrands Natuzzi 629.79 US La-Z-Boy 1,231.68 US Temper-Pedic 1,402.90 US Herman Miller 1,724.10 US rlands Japan US HNI 2,004.00 Okamura Corporation 2,283.29 Nethe Hunter Douglas 2,573.00 Steelcase 2,749.50 US Leggett & Platt 3,720.80 Swed en IKEA 27,500.00 0.00 5,000.00 10,000.00 15,000.00 20,000.00 25,000.00 11 30,000.00
  12. 12. PRODUCT DESIGN TRENDS BY MAJOR MARKETS Market Design TrendCurrent Global Designs • Europe : Classic Designs Movement• Green, Sustainable & Healthy Designs (People • USA & Australia : Contemporary Designs & Nature)• Multi Function • Middle East : in between COMBI CD& CTD• Multi / Alternative Materials • East Asia : Modern Designs (Including Korea, Japan, modular system) Taiwan & India Source: WTO, CSIL (Centre 12 for Industrial Studies)
  13. 13. GLOBAL: FURNITURE MERCHANT WHOLESALERS – 174,193 COMPANIES Size by revenue break Global Merchant Wholesalers 1,000M - 10,000M 7 500M - 1,000M 11 50M - 500M 375 10M – 50M 2,144 5M - 10M 2,505 1M - 5M 14,260 <1M 68,399 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000Source: D&B Hoovers 13 No. of companies
  14. 14. GLOBAL: FURNITURE RETAILERS – 307,623 COMPANIES Size by revenue break Global Retail Trade Companies 1,000M - 10,000M 20 500M - 1,000M 27 50M - 500M 259 10M – 50M 1,050 5M - 10M 1,479 1M - 5M 19,096 <1M 123,263 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000Source: D&B Hoovers No. of companies 14
  15. 15. US FUNITURE MARKETOPPORTUNITIES AND CHALLENGES 15
  16. 16. US FURNITURE INDUSTRY – 2012 REVENUE OF MORE THAN USD 60 BILLION Institutional furniture (used in schools, hospitals, Office and… furniture, Household 30% furniture, 60% Household Consumption Blinds andMattresses , shades , Major Product Consumption 15% 10% Wood kitchen cabinet, 35% Non- upholstered furniture, 20% Upholstered furniture, 16 Source: D&B Hoovers 20%
  17. 17. US FURNITURE INDUSTRY • Country Risk - Household and office furniture sales depend on the health of the US economy • Design Trend — Focus more on Design, Quality. o Office Furniture: More flexible to support changing work styles and greater numbers of wires and cables for computer equipment accommodation o Household Furniture: for more multipurpose rooms, with distinctions between kitchens, living, and dining rooms disappearing. • Large installation of Inventory Control Systems to: o to track and age merchandise and monitor product availability o to fill customer orders on time o to decrease inventory costs at maximum Will require vendors of good production assemblies, finance in good condition, time-delivery committed transportation services for on time product delivery • Finance Trend – More long term credit requirement to Sellers due to smoothing uneven cash flow from US buyersSource: D&B Hoovers 17
  18. 18. US - OPPORTUNITIES FOR VIETNAM FURNITURE EXPORTERS USD million 1,000M – 10,000M 2 US consumer spending 500M – 1,000M 7 on furniture and bedding forecast to grow 4.3% in 50M - 500M 56 2013 10M - 50M 271 5M - 10M 361 US Furniture Merchant Wholesalers – 1M - 5M 4,560 16,537 companiesUSD million < 1M 40,40650M - 500M 15 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 US Furniture Retailers – 10M– 50M 240 52,957 companies 5M - 10M 323 1M - 5M 1,598 13,264 <1M Source: D&B Hoovers 18 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000
  19. 19. POTENTIAL MARKETS FOR 2013 EXPORT Traditional Markets: • US (Increase homebuilding index in 50 years) • Japan (Rebuilding after tsunami) • Singapore • Australia Emerging Markets: • Middle East: Saudi Arabia, UAE, Bahrain • Africa: Egypt, Algeria, Morocco, South Africa • Russia, Kazakhstan ChileSource: CSIL, World Furniture, MTIB , D&B Hoovers 19
  20. 20. SOLUTIONS FOR DEVELOPMENT OF VIETNAMFURNITURE EXPORT• Upgrade trained and skilled work force; esp., design team• Always monitor, update and establish plan to meet with consumer behaviors, preferences, designs, financial and legal developments in targeted markets;• Build global supply management system to avoid hidden supply disruption;• Aggressively penetrate global markets, actively approach various customers: o Direct buyers o Independent retailers o Hypermarkets o Contract manufacturing o Hotels and resorts, public projects  Always be proactive in your business development plan, minimize your dependence on few of your key customers 20
  21. 21. SAMPLE OF A GOOD SALES LEADS FORVIETNAM FURNITURE EXPORTERS 21
  22. 22. SAMPLE OF A GOOD SALES LEADS FORVIETNAM FURNITURE EXPORTERS– KEY PEOPLECONTACTS 22
  23. 23. HOW TO GET YOUR BUSINESS INDENTIFIEDGLOBALLY 23
  24. 24. You need more than information… Thank you 24

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