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    Looking at the future of Chinese furniture manufacturing from the perspective of the development environment of American furniture

    Looking at the future of Chinese furniture manufacturing from the perspective of the development environment of American furniture
    2023/5/2 0:00:00

    About 70 percent of beds and related products in the United States are now imported, up from 58 percent before Washington intervened and tried to protect the domestic furniture industry from Chinese "dumping." Trade concerns have fueled calls for tougher action from Washington to protect U.S. jobs. Are the tariffs working? In the case of furniture, this has significantly slowed down the Chinese export machine. In 2004, before the tariffs went into effect, Chinese bedroom furniture exports to the United States were worth $1.2 billion, compared with $691 million last year.

    But at this stage, imports from Vietnam—where wages and production costs are even lower than in China—exploded, rising from $151 million to $931 million. Meanwhile, the number of jobs lost in the United States has accelerated. Fewer than half as many Americans now make bedroom furniture as before the tariffs.

    China's irresistible export power is not unstoppable, just ask the boss of the Woodworth Wooden Furniture Company. His Dongguan-based factory used to export 400 containers of bedroom furniture to the U.S. a month, but now it exports only 60 containers. That's what Yan's scrambled American rivals hope will happen. In January 2005, the U.S. Department of Commerce imposed import duties on beds, bedside tables and related products produced in China. What happened next, however, did not go as the U.S. had expected: Yan opened a factory in Vietnam and began exporting products to the U.S. from there. Others do the same. Now, he is building a large factory in Indonesia, hoping to export more products to the United States.

    Some small manufacturers in the United States banded together to form the American Furniture Manufacturers Legal Trade Council, demanding that Washington "save them from death." With the help of the union, they filed petitions accusing Chinese competitors of dumping furniture on the U.S. market. After a lengthy debate, the U.S. Department of Commerce ruled that China was "low-priced" dumping and began imposing tariffs on Chinese exporters. Furniture makers in Dongguan held meetings to discuss countermeasures, they set up a fund to support lobbying efforts in Washington, and they began hiring lawyers to fight the lawsuit. Yan has other ideas. “I told them I was going to build a factory in Vietnam,” he said, explaining that it would not only allow his company to avoid U.S. tariffs, but also get rid of rising production costs in China.

    Vietnam has now replaced China as the main source of furniture sold in the United States, thanks in large part to the relocation of factories from Dongguan and elsewhere to Vietnam. Travis, an American furniture buyer who has moved from Virginia to Dongguan. Bell dismissed claims that anti-dumping provisions have helped domestic industry in the United States. “The only thing that has changed is where you have dinner,” he said. “It used to be in Dongguan, but now it’s in Ho Chi Minh City.”

    Looking at the future of Chinese furniture manufacturing from the perspective of the overall environment of the American furniture industry

    With reference to the development of the furniture industry in the United States, perhaps, we can find a new way out for the confused Chinese furniture industry. Looking at the way out of Chinese furniture from the perspective of the American furniture industry during the period of industry transformation, "Using copper as a mirror can straighten your clothes; using people as a mirror can help you learn from gains and losses; using history as a mirror can reveal success."

    一、 The general environment of the furniture industry in the United States

    1. The U.S. furniture industry shifted three times: it first developed from the Northeast, New York, Pennsylvania and New England, then moved to the Midwest, and then to the South. Every transfer is actually moving to areas with lower manufacturing costs and rich high-quality hardwood resources. This "transfer of manufacturing capacity" is also the case in my country's furniture industry.

    2. The negative impact of globalization on the furniture manufacturing industry in the United States is extremely serious. From 1992 to 2005, the import of all furniture products increased from US$4.1 billion to US$23.65 billion, an increase of almost US$20 billion, or an increase of 477%. From 1997 to 2005, the furniture industry, excluding kitchen cabinets, lost 108,000 jobs, accounting for 21% of the unemployed workers in the United States during this period.

    3. The impact of the change of furniture consumption concept on the American furniture industry: like many mass-produced consumer goods, civilian furniture has become a "common commodity" that is more like a bulk category, and sales volume depends on price. Consumers no longer regard furniture as something worth spending money on, and spend less and less money on furniture; at the same time, furniture companies compete for prices in the market, and profits have shrunk greatly, but production costs have continued to increase. As a result, investment in factories and equipment fell sharply, and eventually the technology and equipment of many American furniture factories were greatly obsolete.

    二、 The operation strategy of the American furniture industry in the face of "rising costs, intensified competition, reduced profits, and shrinking market"

    Facing the market environment of rising costs, intensified competition, lower profits and shrinking markets, American furniture manufacturers have adopted a variety of operating strategies.

    1. Shut down their own factories and become wholesalers and retailers: In the retail channel, they use their own brands to attract consumers, and place their products in countries with low wage costs such as China for manufacturing. Its profits come from retail sales. The difference between price and manufacturing price.

    2. Strengthen its own manufacturing capacity and integrate imported products into its own product series. In addition, they also use lean manufacturing and the latest technology to improve their energy level.

    3. Concentrate on making customized products and switch from producing "common goods" products to customized products. Customers are willing to pay a little more for customized products, which makes it impossible for large importers.

    4. Develop new markets and product uses: The wooden parts industry is a good case. They have changed their product structure and positioned the market in the construction industry and kitchen cabinet industry to cope with the downward trend of the furniture industry.

    5. Re-establish the industrial agglomeration of the furniture industry, or establish an advantage center to make the entire supply chain run more closely, so as to provide more value to target customers.

    三、 Where does China's furniture manufacturing industry go from here?

    1. Transform from "ordinary commodities" to "customized commodities", get closer to customers, and create value-added products and services.

    This requires better marketing capabilities, better sales networks, lean production and flexible manufacturing capabilities, immediate supply chain operation capabilities, supply chain management, innovative thinking and leadership, better education and training for employees, etc. , in short, it is a new business model.

    2. In terms of manufacturing, factories must be automated as much as possible to obtain maximum production efficiency and improve labor productivity.

    Therefore, it may be necessary to adopt new technologies and "lean manufacturing" (lean manufacturing) to reduce costs; at the same time, it is necessary to increase investment in worker education and training, new product development and research, so as to train workers with special skills, Create high-end products and sell them at a good price. If we continue to produce ordinary commodity products and provide low-level services, then we will continue to lose markets and give them up to regions with more abundant and cheaper labor.

    3. Establish relevant advantage centers or gather competitive advantages.

    According to Mike. Porter's definition in "Theory of Competition", "Agglomeration refers to a group of companies that are geographically close and interrelated, have synergistic institutions in a specific field, and are linked together through common interests and complementarity", through supply chain development Strategic partners, all links of the entire supply chain work together to make the most effective integration and utilization of resources.

     

     

     

     


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    E-mail:tom.xu@laminating.com / export@tclaminating.com

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    Marketing Centre:  North of Xinxi 3rd, Lunjiao Town, Shunde , Foshan, Guangdong , China

    Companies:Guangdong TC Machinery Manufacturing Co.Ltd , Foshan Tc Woodworking Machinery Co.,Ltd

    Marketing Centre:  North of Xinxi 3rd, Lunjiao Town, Shunde , Foshan, Guangdong , China

     

       



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