A strategic combination of trade liberalization, foreign direct investments, and business-friendly policies has led Vietnam to what it is now — an economic force to be reckoned with.
New research from Furniture Today revealed that Vietnam shipped over $7.4 billion in furniture to the United States in 2020, up 31% from the $5.7 billion in 2019. The figure shows Vietnam has just overtaken China as the US’ main exporter. The East Asian country shipped $7.33 billion to the US in the same 12-month period, down 25% from 2019.
It’s a significant shift in the history of furniture imports, as China was (and relatively still is) the manufacturing center of the world. But it is Vietnam’s close proximity to China that afforded the emerging economy the opportunity to become a competitive business environment.
“This, of course, started slowly with Vietnam emerging as a force in wood bedroom in response to Chinese bedroom manufacturers being hit with anti-dumping duties starting in June 2004,” according to Furniture Today.
Over the past two and a half years, the US government further imposed tariffs as high as 25% on almost all furniture categories. This led to a drop in China’s furniture shipment in the second half of 2018. Vietnam, meanwhile, saw big companies coming in to build manufacturing facilities across the country where they would produce most of their products. Vietnam’s shipments grew 35% to around $5.7 billion in 2019, from just $4.2 billion the previous year.
“That doesn’t surprise me at all,” Fred Henjes, CEO of Riverside Furniture Corp, told Furniture Today. “We are no longer buying products out of China, and I know there are many others besides us.”
Bedroom, dining room, occasional, and home office furniture are the strongest categories Riverside gets from Vietnam. While there are still order backlogs that need to be resolved, particularly due to logistics challenges in Vietnam, Fred said he’s seen improvements.
“I’ve got to believe they are in it for the long haul,” he noted. And he’s not the only one who thinks of Vietnam as an important furniture source.
Klaussner Home Furnishings also sources all of its wood furniture from Vietnam. The company’s sales in the wood segment from Vietnam rose by 10% last year.
Miscellaneous wood furniture was the largest category out of Vietnam with $1.9 billion in shipments, up 43% from the year before.
But the largest increase in terms of major product categories was in wood frame upholstered seating. It rose 83%, to $1.25 billion from 2019.
The next largest categories in order from Vietnam were wood bedroom furniture, where shipments fell 5% to $1.1 billion; wood frame upholstered chairs, which rose 22% to nearly $912 million and wood beds, which rose 11% to $778.9 million, reads the data from Furniture Today.
Even before its export relationship with the US boomed, Vietnam already had a long history of exporting furniture to the EU, which imposes a higher furniture standard. This compliance to EU standards made it easy for the entry of Vietnamese furniture manufacturers into the US market as trade between the two countries grew.
Beyond the wood and furniture exports, textile and garments, as well as footwear and electronics also contributed to the 50% year-on-year growth of Vietnam’s shipment to the US in the first quarter of 2021. Vietnam’s export to the US was valued at $30.3 billion from January to April.