Comfortable and multi-furniture tells you how Chinese companies are nuggeting under the dual demand to promote the rapid development of the "Vietnamese home furnishing industry" Domestic demand: economic development, household consumption CAGR reached 9.6% According to data released by the EVBN (European Union-Vietnam Business Federation), the total household consumption expenditure of Vietnamese residents in 2015 was 10 billion euros, an increase of 9% over 2014 and even higher than the GDP growth rate. From 2015 to 2020, with the increase in residents' income, the acceleration of urbanization, and the massive construction of new houses, the total household consumption CAGR is expected to reach 9.6%. Based on this growth rate, the total household consumption expenditure of Vietnamese residents in 2018 exceeded 14.4 billion euros. The household consumption of Vietnamese residents can be divided into two major components: mass products and high-end products. In the field of furniture, Volkswagen products come from carpenter shops and local small furniture factories, while high-end products usually have the pedigree of overseas enterprises or domestic well-known enterprises. Home decoration in Vietnam includes handicrafts, home textiles, glassware, pottery, rattan products, bamboo products, etc. Among them, the mass products come from the local handicraft villages in Vietnam, and the high-end products come from overseas and domestic well-known enterprises. 1. Popular products In the Vietnamese furniture sector, the prices of mass products are lower. According to the official website of HOA PHAT, XUAN HOA and other companies that locate the public, the average price of a set of dining table and chairs is about 200 euros, the average price of the bed is about 250 euros, and the price of chairs is as low as 16 euros. Furniture factories in Vietnam are mainly located in three regions: the northern Red River Delta (Hung Yen, Vinh Phuc, Bac Ninh, Hai Duong), the central coastal region (Quang Nam, Binh Dinh), the central mountainous region (Gia Lai, Dak Lak), and the south Coastal areas (Ho Chi Minh City, Binh Duong, Dong Nai, etc.). There are a large number of small, medium and large wood processing enterprises in these areas, including foreign direct investment and joint ventures. Foreign direct investment and joint ventures are usually located in industrial parks. Most home decoration products on the Vietnamese market are produced by handicraft villages and towns, which have formed industrial clusters, and each village and town focuses on specific products. These villages and towns are mainly located in northern Vietnam, where Hanoi enjoys an important position and is regarded as the cradle of Vietnamese handicrafts. 90% of home furnishing output comes from the handicraft industry, and about 13 million workers nationwide are engaged in the manual production of home furnishing. 90% of the Vietnamese home decoration industry is local small and medium-sized enterprises, and foreign companies account for a relatively low amount, about 10%, usually from mainland China, Taiwan, Germany and Russia. 2. High-end products Vietnam's high-end furniture prices are higher, and well-known brands include BoConcept, AA corporation, Nha Xinh and so on. The average price of chairs sold by these brands is around 500 euros, the price of a set of dining tables and chairs can be as high as 4000 euros, and the average price of beds is more than 1000 euros. Imports of home decoration and furniture mainly come from China, Malaysia and Thailand. According to EVBN, between 2014 and 2015, Vietnam's home decoration and furniture imports grew rapidly. The CAGR of home furniture imports is as high as 40.9%, and the CAGR of home decoration products is 14.4%. The import of home decoration is mainly home textile, accounting for more than 90%. Free trade agreements are a major factor driving the import of Vietnamese furniture and home furnishings. The Vietnam Customs Law stipulates that unless the exporting country and Vietnam reach a free trade agreement, they must impose a 25% tariff on imported furniture and home furnishings. China and Vietnam have reached a free trade agreement to enjoy tax exemption when exporting home decoration and furniture to Vietnam. The EU-Vietnam Free Trade Agreement (EVFTA), which will take effect in 2019, will bring the tariffs of high-end furniture and household products exported from EU member states to Vietnam to zero, which is expected to further reduce product prices and make imported products more friendly to the people. At present, IKEA has entered Vietnam, spending more than 500 million US dollars to establish a retail network and warehouse in Hanoi. As the economy develops, per capita disposable income increases, and consumption is gradually upgraded, industry analysts estimate that more than 1.5 million Vietnamese have the ability to consume high-end home decoration and furniture products, and the overall level of home consumption is also increasing. The Vietnamese real estate industry is expected to reach a compound annual growth rate of 6% annually between 2015 and 2020. The process of urbanization is accelerating, driving urban housing demand. Similar to the situation in China, Vietnamese consumers also believe that real estate is a long-term investment, and they tend to obtain long-term returns by renting out to young people and foreigners after buying a house. Therefore, the scale of the home furnishing market is expected to expand further. In addition to the increase in the construction of commercial housing, the construction of office buildings is also increasing. The construction of high-end office buildings has brought a large demand for office furniture. External Demand: Industrial Transfer, Chinese Enterprises "Going to Nanyang" Vietnam ’s wooden furniture exports ranked first in Southeast Asia, second in Asia, and fourth in the world. In 2017, the turnover of the Vietnamese wood processing industry reached 8 billion US dollars, an increase of 10% over 2016; As of July 2018, the Vietnamese wood processing industry had a turnover of US $ 5.3 billion, an increase of 13.6% compared to the same period last year. It is expected that the growth in the next few months will remain the same, thus reaching USD 9 billion in export transactions in 2018. This year, Vietnam's furniture export scale has further expanded. According to data from the General Administration of Customs, between January and April 2019, exports of wood and wood products reached nearly US $ 3.12 billion, a year-on-year increase of 18.3%, much higher than the previous year ’s growth rate of around 10%. According to the export volume ranking, the top ten export markets are the United States, Japan, China, South Korea, the United Kingdom, Germany, Canada, Australia, France and the Netherlands. The United States is Vietnam ’s most important export market. In 2015, the United States alone accounted for 38% of Vietnam ’s total household exports, while Japan, China, and the European Union combined accounted for only 40%. Similar to furniture exports, the United States is the most important destination for Vietnamese home textile products exports, followed by the European Union. Vietnam's ceramic products have the most exports to the United States, followed by the European Union. Vietnam has become a fast-rising rising star in the ranks of household exporters. Its comparative advantages are: (1) Strong attraction to foreign investment. According to the data released by the Foreign Investment Bureau of the Ministry of Planning and Investment of Vietnam, Vietnam approved foreign investment, capital increase and financing of USD 35.5 billion in 2018, equivalent to 99% of the same period in 2017. 2018 is the third consecutive year that the foreign direct investment funding rate has set a new record, at US $ 19.1 billion, an increase of nearly US $ 2 billion compared to 2017. Foreign investors have invested in 18 fields in Vietnam, of which processing and manufacturing are the areas that attract the most foreign investment. The investment capital is US $ 16.5 billion, accounting for 47% of Vietnam ’s foreign direct investment. Secondly, in the real estate field, the total amount of foreign investment reached 6.6 billion US dollars; the wholesale and retail industry ranked third, with a total amount of 3.6 billion US dollars. (2) Free trade agreements have come into effect one after another. The EU-Vietnam Free Trade Agreement (EVFTA) and the Trans-Pacific Partnership Comprehensive Progress Agreement (CPTPP) entered into force in 2019 and will bring broader opportunities for Vietnam. These two agreements are expected to reduce export barriers and increase the global competitiveness of local companies. After the implementation of the EU-Vietnam Free Trade Agreement, the EU will immediately exempt textiles and most furniture from Vietnam, provided that the exporter must be able to ensure that the raw materials are derived from legal logging, in compliance with the "Voluntary Partnership Agreement on Forest Law Enforcement, Governance and Trade "(VPA-FLEGT). This not only brings opportunities for local companies, but also makes Vietnam an attractive production destination for many Chinese companies and American companies. (3) State support for furniture and home decoration manufacturing. In recent years, the Vietnamese government has introduced various policies and measures to help manufacturers promote, acquire customers, and occupy the market, and promote the development of the home decoration industry. The establishment of the Hanoi Design Center and the national brand Vietcraft Excellence are good examples. The Hanoi Design Center is Vietnam ’s first design center, established by the Vietnam Handicraft Exporters ’Association (Vietcraft) in collaboration with the Industrial Design Institute of Lund University, Sweden. It aims to provide product design, merchandising and international standards for handicraft designers and craftsmen. Knowledge training to improve the international competitiveness of Vietnamese handicraft products. The national brand Vietcraft Excellence was co-founded by the Ministry of Trade and the Vietnam Handicrafts Export Chamber of Commerce. It can be described as a "state-owned enterprise among state-owned enterprises" in terms of cultural and foreign publicity entrusted by the government. (4) Labor is abundant and cheap. China's labor costs are increasing, while labor in Southeast Asia is cheaper. Vietnam has a population of more than 90 million. At the same time, it also imports labor from the three countries of Cambodia, Myanmar and Laos. These three countries have a population of more than 100 million, and the industrial population structure is relatively young, suitable for the development of manufacturing. However, an obvious shortcoming is that the quality of Vietnam's labor force is not high. In terms of skills, most of the workers belong to "foot washing", lack of vocational skills, and serious shortages of colleges and training institutions; In terms of professionalism, workers are more lazy and have less acceptance of overtime. Zhao Lingmin, an analyst engaged in overseas investment consulting services in Southeast Asia, once revealed to Sanlian Life Weekly: "Southeast Asian workers are generally reluctant to work overtime. Two hours a day is the upper limit. No more money will be given, and it is simply unthinkable to work for a 24-hour shift like the one in China. " (5) For China's furniture manufacturing industry, the most important reason for promoting some of the players to "Go to Nanyang" is the US tariffs imposed on Chinese furniture. Elevator Decoration,Electric Escalator Decoration,Moving Escalator Decoration,Elevator Decoration For Sale MAURER TECHNOLOGIES CO., LTD. , https://www.maurer-elevator.com