China's furniture exports fall as demand from EU and US weakens

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ITTO
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According to the latest statistics from China Customs, the value of China's furniture exports has declined year-on-year for two consecutive quarters. The value of China's furniture and parts exports fell 8.1% to US$11.31 billion in the first quarter and fell 7.6% in the second quarter.

The main reason cited for the decline is the weakening of demand in the USA and European Union. These two markets account for around 50% of the China's total furniture exports.

In the first quarter of 2014, the value of China's furniture exports to the USA fell 0.9% to US$3.45 billion (now 31% of t he national total) while exports to the EU fell marginally to US$2.44 billion (now 22% of the national total).

Another factor squeezing Chinese furniture exports has been the transfer of business by US importers to suppliers in Vietnam where export prices are very competitive compared to China which suffers from rising labour, energy and transaction costs.

According to local experts raising per capita productivity in China will help restore competitiveness. But to sustain the export markets which are so important since domestic demand is fading due to China's demographics it will be necessary for Chinese companies to change their business models from a focus on made to order to one of branding and buyer loyalty.

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