Vietnam surges up world furniture production rankings to 6th

Vietnam has seen "impressive growth" in its ranking, moving up from 13th in 2014, a CSIL representative said at the HawaExpo 2024 international furniture export fair held in HCMC.

The five largest are China, the U.S., Italy, Germany, and India.

China and the U.S. have remained in the top two spots for over a decade.

Giovana Castellina, senior partner at CSIL, said Vietnam's furniture industry has grown faster than that of any other country in the last 10 years.

"Initially, this place [Vietnam] mainly supplied outdoor furniture, but now its interior furniture production has also developed strongly.

"For example, 25% of its products are upholstered furniture and account for 10% of the upholstered furniture output in the Asia-Pacific region.

"Exports are the driving force behind that growth, accounting for 93% of the total production."

According to data from the Department of Forestry, furniture accounted for 82.9%, or US$8.4 billion, of the country’s wood and wood products exports.

Subsidiary Tran Duc Homes recently started exporting prefabricated wooden houses to the U.S.

It has also invested in Southeast Asia’s first production line for cross-laminated timber, an alternative to traditional reinforced concrete.

Some furniture on display at the HawaExpo 2024. Photo courtesy of Tran Duc Corporation

Nguyen Tuan Hung, an expert at the forestry department, estimated the international furniture market to be worth $405 billion.

The exports of wood and wood products in the first two months of 2024 were worth $2.4 billion, up nearly 44% year-on-year.

Businesses’ order books are full for until at least April or May, according to the Handicrafts and Wood Industry Association of HCMC.

But Castellina expected the global furniture market to be dull this year before growing again in 2025.

She also noted however that it is difficult to forecast the market given the ongoing geopolitical conflicts.

Furniture made by a Vietnamese company on display at the HawaExpo 2024. Photo courtesy of the export fair

According to CSIL, in the long term Vietnam’s furniture industry might face several challenges stemming from its narrow customer base, modest design capabilities and trade fraud.

It should expand exports to other markets instead of focusing on the U.S. as it does now, it said.

The U.S. accounts for more than 50% of its exports.

Castellina said: "Their [the U.S.] consumption weakened last year due to high inflation and mortgage interest rates. This year the country is having a presidential election, and so people will be cautious."

It is important for the industry to develop a brand and unique designs early on to get higher prices and reach high-end customers, she added.

Another challenge, according to Hung of the forestry department, is that the global is becoming more stringent, like with the Carbon Border Adjustment Mechanism that is set to take effect in 2027.

Nguyen Liem, chairman of the Binh Duong Furniture Association, said trade fraud is still a huge concern.

"We have been working with local authorities, customs, tax agencies, and economic security agencies to combat frauds like fake origin labeling."

Binh Duong accounts for over 40% of the country's wood and wood product exports.