Trần Quang Bảo, director of the Department of Forestry, speaks about opportunities and challenges faced by Việt Nam’s furniture industry at the 2024 Vietnam Furniture Industry Outlook forum in HCM City on March 6, — Photo courtesy of the organiser

HCM CITY — Việt Nam’s wood industry, in addition to meet stringent requirements in terms of origin, environmental and social responsibility, also needs to focus on diversifying export markets and developing uniquely designed products to thrive in the long run, a forum heard in HCM City.

Speaking at the 2024 Vietnam Furniture Industry Outlook forum on the sidelines of HawaExpo being held in HCM City from March 6 to 9, Trần Quang Bảo, director of the Department of Forestry, said wood product exports declined for the first time in 2023 after two decades of impressive growth due to global inflation.   

He mentioned difficulties and challenges faced by the industry, including increasingly strict control in major markets over the legality of timber sources to prevent deforestation and forest degradation and more stringent requirements in terms of environment and social responsibility.

Besides, most businesses are too small to build brands and vulnerable to market volatility. 

They also face huge competition, he said.

But there are also opportunities that could drive the industry’s growth, he said, pointing out that Vietnamese wood products are trusted by consumers around the world and Việt Nam ranks among the world's largest wood products exporters.

But it still accounts for a very small market share, which means there is considerable room for growth, he said.

Giovanna Castellina, senior partner at CSIL, an independent Italian research and consulting company, said globally furniture production is a large industry and was worth around US$480 billion last year, with China being the largest producer followed by the US, Italy, Germany, India, and Việt Nam. 

She said prospects for 2024 and 2025 are clouded by major uncertainties like trade barriers and measures, geopolitical issues and strong inflationary pressures.

CSIL forecast the global wood industry to remain flat this year and grow again from 2025.

She admired Việt Nam’s furniture industry, saying it is flexible and has been growing faster than all the other countries’ in the last 10 years. 

But she also cautioned about its reliance on the US market, which accounts for 75 per cent of its shipments, saying: “The Vietnamese furniture export system is unbalanced and this is risky because when such a partner market is weak, the industry will suffer as a whole.”

Diversifying export markets is imperative, she added.

Nguyễn Quốc Khanh, chairman of the Handicraft and Wood Industry Association of HCM City (HAWA), said demand for wooden furniture and interior products is expected to increase in the long term.

He urged firms to find ways to gradually increase their share in major markets and constantly explore new markets.

Nguyễn Liêm, chairman of the Bình Dương Furniture Association, said during the market downturn last year low-value export orders fell the most since inflation and recession only affect low-income groups and they quickly cut back on purchases of discretionary goods.

A good sign is that many firms have invested significantly in technologies to improve product quality, and have shifted from OEM production to developing uniquely designed products to enhance the value.

The products have been appreciated by many global buyers, he added. — VNS