Vietnam's timber and timber product exports are up, but the domestic market is buying foreign imports, due largely to a lack of planning and product diversity.
Domestic timber furniture facing tough competition
Exports of timber and timber products rose 5.5 percent in the first quarter on a year earlier to USD1.52bn. But locally made furniture accounts for just 20 percent of sales in Vietnam.
Vo Van Quyen, in charge of domestic trade affairs at the Ministry of Industry and Trade, said Vietnam has 4,000 manufacturing facilities, mostly small-scale, with 340 traditional villages, specializing in making timber furniture.
The Handicraft and Wood Industry Association (HAWA) of Ho Chi Minh City said domestic makers are facing increasing difficulties as Vietnam joins trade pacts lowers import duties in line with its obligations under ASEAN trade integration next year.
Huynh Van Hanh, deputy head of HAWA, said, "This is a warning bell. Companies should make plans and find ways to make a strong impression in the marketplace with brand recognition for customers or they'll lose in this integration era."
He said there was a lot of potential in domestic markets, but companies lacked professional distribution, product diversity and brand recognition.
The Vietnam Wood and Wood Product Association said 26 countries are planning, or have made moves, to invest in the timber furniture industry, including China, Thailand, Japan, South Korea and the UK.
