Vietnam Furniture Market 2024: Potential but Not Without Challenges

DNHN - In 2024, the Vietnamese furniture market is expected to continue its robust growth, driven by several favourable factors such as the middle class’s demand for improved living spaces, urbanisation, and the tourism industry’s expansion.

According to a report by market research firm Mordor Intelligence, the size of Vietnam’s furniture market is projected to increase from USD 1.40 billion in 2023 to USD 1.82 billion by 2028, exhibiting a CAGR of 5.33% during the forecast period (2023-2028).

In this regard, data from the General Statistics Office shows that Vietnam’s GDP in 2023 reached 6.5%, exceeding the World Bank’s (6.2%) and the International Monetary Fund’s (6.3%) forecasts. The average income per capita in 2023 was USD 3,700, a 7.1% increase compared to 2022.

The middle class’s growing demand for housing and improved living spaces is driving the furniture market. According to a World Bank report, Vietnam’s middle class has doubled in the past decade, from 12% of the population in 2010 to 26% in 2020. The Vietnamese middle class, with an income ranging from VND 10 million to VND 20 million per month, accounts for 13% of the population and tends to purchase more premium products, including furniture. Rapid urbanisation has led to a significant demand for furniture in apartments and townhouses.

According to the Ministry of Planning and Investment, Vietnam’s urbanisation rate in 2023 reached 40.6%, an increase of 0.9% compared to 2022. The number of apartment projects granted construction permits in 2023 reached 1,000, a 10% increase compared to 2022. The demand for furniture in apartments is projected to increase by 15% in 2024.

The thriving tourism industry has resulted in a high demand for furniture in hotels and resorts. According to the General Department of Tourism, the number of international visitors to Vietnam in 2023 reached 18 million, a 15% increase compared to 2022. Domestic tourists in 2023 reached 85 million, a 12% increase compared to 2022. Hotels and resorts need to invest in upgrading and decorating their interiors to attract customers.

Vietnam’s furniture market not only faces competition from domestic businesses but also from foreign companies, particularly from China, Thailand, and Malaysia. Foreign companies have advantages in terms of price, design, quality, and service. According to the Vietnam Timber and Forest Products Association, in 2023, Vietnam’s furniture import turnover reached USD 3.5 billion, a 20% increase compared to 2022. Of these, China accounted for 60%, Thailand accounted for 15%, and Malaysia accounted for 10%.

Mr Nguyen Ngoc Phuong, CEO of ARC Company, shared that the Vietnamese furniture market has significant growth potential. Vietnam’s economy is growing well, people’s incomes are increasing, and the demand for furniture is also increasing. However, the Vietnamese furniture industry is facing many challenges: fierce competition, a shortage of human resources, and inconsistent product quality. To succeed in the furniture market, businesses need to improve product quality, enhance customer service, and build a strong brand. ARC Company always pursues the goal of becoming a leading furniture brand in Vietnam and the region.

The Vietnamese furniture industry is facing a shortage of quality human resources, especially skilled workers, design personnel, and management staff. According to the Vietnam Timber and Forest Products Association, in 2023, the Vietnamese furniture industry needed about 500,000 workers, but only 300,000 workers met the requirements. Of these, only 10% of workers are skilled, 5% of workers are capable of designing, and 3% of workers are capable of management.

On the other hand, the crucial factor in building customers’ prestige and trust is product quality. Businesses need to ensure product quality from raw materials, design, production, packaging, transportation, installation, and warranty. Furniture products need to meet the criteria of durability, safety, aesthetics, convenience, and environmental friendliness.

Simultaneously, businesses need to provide professional, dedicated, and flexible customer services, such as consultation, design, installation, warranty, maintenance, return, and technical support. Businesses need to listen, understand, meet, and exceed customer expectations.

To create differentiation and competitiveness for businesses, they need to build a strong brand by creating furniture products with added value, creativity, and a unique style. Businesses need to implement effective communication, promotion, and marketing strategies, targeting the target customer group, and enhancing brand recognition and trust. The Vietnamese furniture market in 2024 is predicted to continue its robust growth with significant growth potential.

Quang Duy – Van Nguyen