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A View From The Bottom

What better way to get a clear look into the waters than being under it? Having sunken (or floated) thus far, and still charging ahead, is a measure of one’s depth and stamina, if I might add.

The good (and the bad) news is we’re probably going to hit bottom (finally) this final quarter of a difficult year, and get back up into daylight. The American furniture industry may be beginning to see the worst and the faint signs of recovery ahead of that, a report by a High Point-based accountancy and consultancy firm Smith Leonard PLLC says. (Read their outlook on pg 52.)

More is in store once the economy drags its feet up and gets moving, they say. In populous China, second and third tier cities are now touted to be the new land of opportunities. The government is putting much effort to encourage consumer spending in the country, and particularly in the countryside. It’s another horizon beyond the metropolitan Beijing and cosmopolitan Shanghai.

During a mission trip to promote these cities to the Kuala Lumpur & Selangor Furniture Entrepreneur Association, Shenzhen Furniture Trade Association’s Secretary General Hou Kepeng revealed that the Chinese are ready to consume imports now more than before. It seems like its people are as much willing to spend, as the country is buying up corporate assets overseas. China doubled its investments overseas last year and this was expected to still rise by 13 percent this year.

Hou said: “The government understands that by depending on export alone, the country will never become rich…”

Some of China’s most famous furniture brands built their successes in second and third tier cities, and there is definitely room for imported furniture from other Asian manufacturers, Hou added. “China has many successful brand names that sell only within China. QuanU, which targets only second and third tier cities, now has about 2,400 stores and covers 70-80 percent of these cities. Kuka also has a very strong domestic sales base worth RMB 2.5 billion through 1,600 stores. Markor’s total local sales is worth RMB 19.9 billion. Sleemon’s bedding sells for RMB 1.5 billion annually. In addition, there are 70 to 80 enterprises with sales of more than RMB 1 billion within China.” (Full report of the meeting on pg 16.)

And in Russia as well, consumers are rather hungry for good quality imports – the doors are open, if you know how to get in there.

According to Vladimir Makeev, Vice-director of The Association Of Furniture And Woodworking Industries Of Russia, furniture sales grew from US$1 billion to US$10 billion in the period 1999-2008. Moreover, “rates of growth in sales of import furniture exceeded rates of growth in sales of local furniture. In 1999, the ratio of local to imported furniture was 4:1. Now, this ratio is almost equal… Even during a time of financial crisis, positive tendencies of sales are observed,” he said in our Country Report on pages 28-32. In our next (Nov-Dec 09) issue, he details the prospects that Malaysian exports have in Russia, so do keep a lookout for it.

The Nov-Dec 09 issue will be available at our booths in Index, Dubai and of course, Mebel, Moscow. Before that, catch us with this current issue in Furniture China, Shanghai and CIFF Guangzhou, as well as HCMC Expo, Vietnam later in October. Yes, catch us – stamina required.

Nicole Liang
Assistant Editor