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Analysis of the international furniture market, where should Chinese furniture manufacturing go?
Today, about 70% of bed and related products in the United States are imported, but before Washington intervened and tried to protect the domestic furniture industry from “dumping†of Chinese products, the ratio was 58%. Trade concerns have sparked calls for Washington to take more rigorous action to protect US employment. Has the tariff worked? In terms of furniture, this has obviously slowed down the speed of Chinese export machines. In 2004, before the entry into force of the tariff, the value of bedroom furniture exported by China to the United States reached 1.2 billion U.S. dollars, compared with 691 million last year. But at this stage, imports from Vietnam, where wages and production costs are even lower than China's, have exploded, from $151 million to 931 million. At the same time, the number of jobs lost in the United States is accelerating. Americans who now work on bedroom furniture are less than half of the pre-taxes. China's irresistible export power is not unstoppable. Just ask the boss of Woodworth Wooden Furniture Company to be clear. His factory in Dongguan has 400 containers in the bedroom house that was exported to the US every month, but now only 60 containers. This is what the US competitors who are exhausted are hoping to happen. In January 2005, the US Department of Commerce imposed import duties on beds, bedside tables and related products produced in China. However, the next thing did not develop as expected by the United States: Yan opened a factory in Vietnam and began to export products to the United States 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 American manufacturers have formed a group to set up a legal trade committee for American furniture manufacturers, asking Washington to "save them to death." With the help of the trade unions, they submitted a request to accuse Chinese competitors of dumping furniture into the US market. After a long debate, the US Department of Commerce ruled that China’s “low price†dumping began to impose tariffs on Chinese exporters. Dongguan furniture manufacturers held meetings to discuss countermeasures. They set up a fund to support lobbying efforts in Washington and began to hire lawyers to file lawsuits. Strict but have another idea. He said: "I told them that I will build a factory in Vietnam." He explained that this will not only enable his company to evade US tariffs, but also eliminate China's rising production costs. Vietnam has now replaced China as the main source of furniture for sale in the United States, thanks in large part to the transfer of factories in Dongguan and elsewhere to Vietnam. Travis Bell, an American furniture buyer who has moved from Virginia to Dongguan, dismissed the claim that anti-dumping clauses have helped the US industry. “The only thing that changes is where you eat dinner,†he said. “It used to be in Dongguan, but now it is in Ho Chi Minh City.†Looking at the furniture industry in the United States, where does Chinese furniture manufacturing refer to the development of the US furniture industry? Perhaps, we can find a new way out for the lost Chinese furniture industry. In the period of industrial transformation, the way out of Chinese furniture from the American furniture industry is "with copper as the mirror, can be the crown"; with the human mirror, it can be learned and lost; with history as the mirror, it can be seen as a replacement." First, the environment of the American furniture industry The three shifts in the US furniture industry: first developed from the northeastern regions of New York, Pennsylvania, and New England, and later moved to the Midwest, and then to the South. Each transfer is actually moving to an area with lower manufacturing costs and high-quality hardwood resources. This “transfer of manufacturing capacity†is also true in China's furniture industry. 2. The negative impact of globalization on the US furniture manufacturing industry 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 other than kitchen cabinets has lost 108,000 jobs, accounting for 21% of unemployed workers in the United States during this period. 3, the impact of changes in the concept of furniture consumption on the US furniture industry: Like many mass-produced consumer goods, civilian furniture has become a more common category of "common goods", the sales volume depends on the price. Consumers no longer regard furniture as a thing worth spending, and spend less and less on furniture. At the same time, furniture companies fight for price in the market, profits are greatly reduced, but production costs are constantly Rising, the investment in factories and equipment fell sharply, which eventually led to the great fallout of the technology and equipment of many American furniture factories. Second, the US furniture industry faces the "cost increase, increased competition, lower profits, market shrinkage" operating strategy in the face of rising costs, increased competition, lower profits, market shrinking market environment, US furniture manufacturers have adopted a variety of operations Strategy. 1. Turn off your own factory and become a wholesaler and retailer: in the retail channel, they use their own brands to attract consumers and put their products in low-wage countries such as China for manufacturing. Its profit comes from retail. The difference between the price and the manufacturing price. 2. Strengthen your manufacturing capabilities and integrate imported products into your own product range. In addition, they use lean production and the latest technology to improve their energy levels. 3, focus on custom products, from the production of "general goods" products to customized products, customers are willing to spend a little more on custom products, so that large importers can not do. 4. Development of new markets and product uses: The wooden parts industry is a good example. They have changed the product structure and positioned the market in the construction and kitchen cabinet industries to cope with the downward trend in the furniture industry. 5. Re-establish the industrial agglomeration of the furniture industry, or establish an advantage center to make the entire supply chain operate more closely to provide more value to the target customers. 3. Where is the Chinese furniture manufacturing industry? 1. From “common goods†to “customized goodsâ€, it is closer to customers and creates value-added products and services. In the furniture industry, there is a lack of contact between many furniture manufacturers and end customers, and too much is relying on retailers to obtain information on customer needs and expectations. The furniture industry must learn how to approach end customers, how to provide them with products, and ensure that they make a profit. This requires better marketing capabilities, better sales networks, lean manufacturing and flexible manufacturing capabilities, immediate supply chain operations, 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 achieve maximum productivity and increase labor productivity. Therefore, it is possible to adopt new technologies and “leanmanufacturing†to reduce costs. At the same time, it is necessary to increase investment in the education and training of workers, the development of new products and research, so as to cultivate workers with special skills. Create high-end products and sell for a good price. If we continue to produce products in the general merchandise category and provide low-level services, then we will continue to lose market and give way to areas where labor is more abundant and cheaper. 3. Establish relevant advantage centers or gather competitive advantages. According to Mike. Porter's definition in "Competition", "aggregation refers to a group of geographically close, interconnected companies, with synergistic institutions in specific areas, linked through common interests and complementarities", through supply chain development Strategic partners, all aspects of the entire supply chain work together, making the most effective integration of resources.