The US is the world's largest furniture market, accepting some 30 percent of the global import value of this product category. It has always ranked as the No.1 marketplace for Thai furniture. The U.S. Department of Commerce reports that US imports of furniture from around the globe totaled USD20.949 billion in 2005, rising by 10.41 percent, over-year. Among the top five furniture exporters to the US market were China (accounting for 50 percent), Canada (15.9 percent), Mexico (4.7 percent), Italy (4.5 percent) and Malaysia (3.3 percent). Thailand was placed the ninth on the list of the largest exporters of furniture to the US, with an export value of USD425.8 million, accounting for 2.0 percent of the overall imports to the US.
Evidently, Vietnam has emerged as Thailand's archrival in the US furniture market over the past four to five years. Exports of Vietnamese furniture, totaling USD12.7 million in 2001 surged to USD648 million in 2005, representing a leapfrogging growth of more than 100 percent per year. Comparatively, Chinese furniture has recorded stable growth of over 20 percent annually to the US market during the period, while Thai products grew moderately and inconsistently. In 2005, furniture exports from Vietnam outpaced Thai shipments to the US marketplace for the first time, though Vietnamese exports and their market share there had been far lower than those of Thailand in the past. The latest trend has shown that Thai furniture exports to the US market will likely be outclassed by their Vietnamese counterparts in 2006. Overall, KASIKORN RESEARCH CENTER (KResearch) expects that exports of Thai furniture to the US in 2006 will total some USD400-450 Million.
There are many reasons that contribute to the high growth of Vietnamese furniture to the US market, which is evidently thanks to trade liberalization between Vietnam and the US since 2001, based on their joint trade agreement. In addition, many investors from both Taiwan and the EU have increasingly moved manufacturing bases to Vietnam and their export-oriented manufacturing has been developing steadily, which has enabled furniture manufacture in Vietnam to grow rather rapidly. Moreover, at present, furniture from China occupies a market share in the US so high that American furniture manufacturers have been drastically affected, implying that in the future the US will impose anti-dumping tariffs on Chinese furniture. Another point is the rising wages in China resulting in more foreign investors who had invested in China gradually moving their manufacturing to Vietnam, instead. Meanwhile, furniture entrepreneurs in Vietnam have already paid attention to their furniture production in supplying the Japanese and EU markets, thus the goods that are made in Vietnam have already attained good quality, while their prices have not been expensive, or have not differed substantially from the furniture made in China. Therefore, it is quite possible that Vietnam will become one of the five major furniture exporters to the US, and will definitely have a more significant role in the future.
KResearch, therefore, views that Thai entrepreneurs should take proactive measures, rather than just being responsive to the market, at the same time, they should concentrate on the advantages of differentiation and cost - which is derived from efficient management. Thailand, however, at present, Thailand has lost the advantages of lower production costs, abundant raw material supplies and lower wages that Thailand once had to Vietnam. With regard to differentiation, Thai entrepreneurs should focus on unique designs instead of copying foreign products; improve product quality and add to product value by creativity, and not being limited to contract manufacturing. In the meantime, we should try to find trade alliances or distributors that have widespread distribution channels in the US market. We certainly should more actively take part in international exhibitions, as well as undertake branding strategies to elevate Thailand's product quality to a position at the high-end or middle markets. We should also focus more on niche markets alongside with expanding the target individual consumers to corporate customers including hotels, spas and restaurants.
Enter the code from the poll
Annotation
This research paper is published for general public. It is made up of various sources. Trustworthy, but the company can not authenticate. reliability The information may be changed at any time without prior notice. Data users need to be careful about the use of information. The Company will not be liable to any user or person for any damages arising from such use. The information in this report does not constitute an offer. Or advice on business decisions Anyhow.