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Overview report about Interior Furniture Market of Vietnam

Furniture market: Attractive high-class export furniture segmentAt the end of July 2019,Overview report about Interior Furniture Market of Vietnam (2015-2020) Articles Dongsuh Furniture, a luxury furniture brand from South Korea, launched in Ho Chi Minh City. With the scale of two large factories located in Binh Duong with an area of more than 10,000 m2, Dongsuh Furniture boosts its production to export with living room furniture such as leather sofas, sofa tea tables, wooden TV shelves, and furniture. bedroom furniture such as wooden bed, modern dressing table, wooden wardrobe, dining room equipment such as dining table set, …

Mr. PARK YOUNGNAM – Managing Director in Vietnam of Dongsuh Furniture said: “After 5 years of exploring the Asian market, Dongsuh Furniture recognized the attractiveness of the Vietnamese market”. That is the reason for Dongsuh Furniture to come to Vietnam earlier than planned, after invading China and Japan. Vietnam is the third market in Asia, after China, where Dongsuh Furniture is present.

It is also the attraction of the market that made King Mattress – funded by Casper, a well-known American mattress supplier, decided to bring Amando high-end mattresses in Vietnam combined with Korean furniture Dongsuh Furniture to distribute. in Viet Nam. Currently negotiating for cooperation.

The furniture market attracts thousands of participating businesses, including the most exciting high-end segment with names such as Pho Xinh, Nha Vui, Index living mall, etc. foreign brands because of the opportunity from the domestic furniture market of Vietnam.

Real demand and purchasing power of furniture industry per capitaAccording to data of the Ho Chi Minh City Association of Fine Arts and Wood Processing (HAWA), only for furniture, the average consumption demand in Vietnam is 21 USD / person / year. Calculated, the scale of domestic wooden furniture consumption in 2018 reached US $ 4 billion.

According to Mr. Phan Dang Chuong – Deputy General Director of ERNST & Young Vietnam Limited, in the past 5 years, about 400,000 – 500,000 townhouses and high-class apartments have been born in Vietnam. On average, each apartment uses at least 1-2 hundred million dong for the interior, so there is less than 100,000 billion dong for this demand.

In addition to real estate, the strong growth of the furniture industry is also related to the formation of the middle class in Vietnam that has spread the aesthetics and demand of consumers. “Customers do not choose furniture as ordinary items but express their lifestyle, sophisticated aesthetic sense,” Mr. Phan Dang Chuong shared.

In 2018 Vietnam spent nearly 500 million USD to import furniture, which is expected to continue to increase in the following years.

According to the sharing of representative of Eric Dinh, marketing director of Dongsuh Furniture, middle and high-end products have many price segments ranging from tens of million to nearly 400 million dong / product. In particular, the purchasing power of the price segment below 50 million VND accounts for 40% of sales of this business. And at the same time affirmed, the current furniture market has not been properly evaluated in terms of product value, many products have been raised from 3 to 5 times.

“The opportunity to experience a complete interior space for every Vietnamese family is almost a luxury. It is a challenge but Dongsuh Furniture’s model of selling furniture online will completely change that. Buying goods online in Korea as a habit of the people, we believe that in Vietnam, we will do the same, especially before the explosion of IoT and e-commerce platforms in Vietnam. selling home furniture will help save significant costs and help all Vietnamese people have the opportunity to access the luxury furniture segment at an affordable cost “- Mr. Eric Dinh shared with reporters tablets.

Not only Dongsuh Furniture, other high-end brands distributed by Dongsuh Furniture also grow very high as the model of living furniture (sectional sofa) classroom furniture, office room with office chair samples.

With kitchen equipment, kitchen, Kohler, Rita Vo is one of the 10 largest distributors of this group. Mr. Vo Mau Quoc Trien – Chairman of the Board of Directors Rita Vo said that Vietnam is the third largest market in Asia, after India and China. Kohler products distributed by the company increase every year. Rita Vo currently has 7 stores (each store area is from 3,000 – 10,000m2) and will open more to reach 20 stores within the next 5 years.

Evaluating the market will continue to grow strongly, in the fourth quarter of this year, Dongsuh Furniture intends to open 3 more large-scale production factories and open two more stores in Ho Chi Minh City and Hanoi so customers can easier to position the brand and then gradually move to online.

In the plan to conquer Vietnamese consumers, in the next 5 years, this business will open 15-20 furniture stores in Vietnam. “We choose Vietnam as the center to explore the ASEAN market. When having a satisfactory partner, the development of the distribution system will be very fast, ”Mr. Park Young Nam affirmed.

 

What is the potential of Vietnam’s furniture market today?While leading the world in furniture export, Vietnam is still leaving many potentials of the domestic market open.

“Ignoring” the domestic furniture marketAccording to a report on the Vietnam furniture market made by Dongsuh Furniture, Vietnam ranks first in Southeast Asia, 2nd in Asia and 4th in the world in furniture export. In 2015 alone, in the European market, the total export turnover of furniture reached US $ 7.2 billion and US $ 1.7 billion with home decor items.

The development of the furniture industry in Vietnam is expected to grow steadily at a rate of 9.4% per year.

Also according to Dongsuh Furniture’s analysis, the current Vietnamese furniture market is mainly export-oriented and leaving the yard open. Most of the domestic market is a playground for imported goods, originating mainly from China, Malaysia and Thailand.

Domestic consumption of wooden products remains weakA recent report on Vietnam’s wood product market by the Ministry of Agriculture and Rural Development also pointed out that. Although ranked 6th in the world in exporting wood products, the domestic market with the consumption of 90 million people, estimated at 1-2 billion USD a year has not been paid enough attention.

Partly due to the incorrect pricing of products in the domestic furniture market, as originally shared by Eric Dinh. Causing many families as well as interiorguide consumers to wonder before going down, although in general, the quality of furniture in Vietnam is quite good.

Statistics show that Vietnam’s domestic wooden furniture market only accounts for about one third of export turnover

With an average GDP growth rate of 6% per year, along with the development of construction and real estate sectors, the increase in household income will also help increase spending on goods and services. Interior.

The Ho Chi Minh City Fine Arts and Processing Association estimates that in 2018, the total domestic furniture consumption is estimated at about US $ 4 billion.

In the context that domestic companies are focusing on exporting, Dongsuh Furniture said that the furniture market in Vietnam is similar to South Korea 20 years ago, but this will be the first step for attracting foreign investor. Many international brands are planning to set up manufacturing plants, or seek opportunities to expand business in Vietnam when the tariff barriers on furniture and home decor are removed.

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