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China Furniture Manufacturing Sector Soars But Exports Still Priority

Despite a multitude of conflicting industry events, the Shanghai-hosted China International Furniture Expo still sprawled across a record 300,000 sq m of premium exhibition space and attracted more than 150,000 keen trade attendees.

Photo: Furniture China: The best in fixtures and fittings from around the world on show.
Furniture China: The best in fixtures and fittings from around the world on show.
Photo: Furniture China: The best in fixtures and fittings from around the world on show.
Furniture China: The best in fixtures and fittings from around the world on show.

Now in its 24th year, the most recent edition of the China International Furniture Expo (Furniture China) filled 300,000 sq m of exhibition space, using up nearly all the available halls at the Shanghai New International Expo Center. For 2018, the expo ran concurrently with a sister event – Maison Shanghai (held over at the Shanghai World Expo Exhibition & Convention Center) – while also finding itself jostling for attendees with the China International Furniture Fair, a rival trade showcase taking place at the National Exhibition and Convention Center Shanghai at almost exactly the same time (10-13 September). Fortunately, the sheer scale of the sector seemed to allow all the scheduled events to prosper.

Indeed, across the mainland, furniture production is now massive, with China's National Bureau of Statistics estimating the collective 2017 turnover of the country's furniture manufacturers to be in excess of RMB900 billion (US$131 billion). In light of that, it should be no surprise that the combined footfall for Furniture China and Maison Shanghai was some 151,588.

Despite such apparently impressive visitor numbers, some exhibitors felt serious international trade buyers were a little thin on the ground. Among such cynics was Flemming Lindtofte, Managing Director of Unique Furniture, a 12-year-old southern Denmark-based furniture manufacturer and distributor.

Assessing the attendee demographic, he said: "It's fair to say there are a lot of spectators here, as well as individual consumers trying to get a one-off deal. Overall, though, serious buyers seem to only account for about 1% of the footfall.

"For our part, we're not seeing a great deal of demand for our furniture in China, largely because mainland consumers prefer solid wood furnishings while our items tend to be veneered. Typically, parents here will purchase furniture for their children when they get married, with high-quality, long-lasting items being the priority.

"As we are here mainly to meet with US and EU customers, we are only selling by the container-load. At a similar event in Cologne, for example, we have to take over an entire warehouse in order to keep up with demand."

One company targeting a similar demographic – but for quite different reasons – was Bellagio Asia. With showrooms in Hong Kong and Shanghai, the company operates in China as a Wholly Foreign Owned Enterprise (WFOE). Although it is entitled to manufacture furniture on the mainland, all its output has to be exported rather than sold domestically.

Outlining his company's experience at the event, Managing Director Paul Weerens said: "Compared with a similar show we attended in Singapore, there is more traffic here but less serious buyers. We see our USP as providing a bridge between classic and contemporary European looks, while we can also deliver a high-end product at a good price point."

Photo: Bellagio Asia: European, classic and contemporary.
Bellagio Asia: European, classic and contemporary.
Photo: Bellagio Asia: European, classic and contemporary.
Bellagio Asia: European, classic and contemporary.
Photo: Kid-friendly bed-vroom furniture from Cilek.
Kid-friendly bed-vroom furniture from Cilek.
Photo: Kid-friendly bed-vroom furniture from Cilek.
Kid-friendly bed-vroom furniture from Cilek.

For one US producer, the scale and attendance at the event was more a matter of nostalgia than concern. Explaining his sudden burst of sentimentality, Ron Holliday, Sales Manager of Greenington, a Washington-state based specialist supplier of bamboo furniture, said: "Hallways are getting smaller and smaller at shows in the US these days. Everyone is simply selling online and people aren't visiting fairs any more, but here it's like 20 years ago.

"Our priority, however, is to keep all our factory staff employed in case of a drop in our state-side business as a result of US-China tariff friction. In line with that, we are looking to target Australia in particular, so we are delighted by the strong showing from Down Under at this particular event."

At present, the company produces its range of bamboo furniture – including chairs, tables and beds – in China from sustainably harvested bamboo grown in the north-western Zhejiang province. Although it does sell into the domestic market, it sees its price point as too high for the majority of local consumers, so most of its output remains destined for export.

In that regard, Greenington was typical of many of the companies in attendance, with the majority focused on international markets rather than China. One exception – one with big plans for the mainland – was Cilek, a Turkish specialist manufacturer of furniture for children and babies.

Founded in 1996, the company has 500 sales outlets around the world, including 200 in Turkey alone. In October last year, it opened a flagship outlet in Shanghai – its 20th store in China.

Together with Turkey and the US, the company aims to make China one of its three main markets, with plans in place to roll out 200 stores within 10 years across the mainland. Already well-familiar with the peccadilloes of local consumers, this was the second time the company attended the Shanghai event, while it has been frequenting a similar event in Guangzhou for 10 years.

Detailing the particular peculiarities of targetting the mainland, Export Director Behlül Nergiz said: "We've been selling our complete bedroom solutions for children in China for three years and it's been challenging, but promising. For one thing, the consumption culture is very different, while we've also had to adapt our materials and sizes in line with local preferences."

Another business with its eye firmly on the Chinese market was Italy's Fonderia Artistica Ruocco. Operating out of Naples, it has nearly a half a century of heritage in the interior statue sector.

Commenting on the somewhat unlikely demand for this niche offering among mainland consumers, company President Giuseppe Ruocco said: "Italian furnishings are surprisingly popular in China right now. We've been selling across the mainland for three years and one thing we've found is that there are significant regional differences. While our statues sell well in Shanghai, for instance, it's a very different story in Shenzhen."

Another veteran of the event was Cebu-based Janice Minor Export, with the company having bought its range of furniture, accessories and lamps to Shanghai every year since 2012. This year, it was mainly looking to showcase a number of its smaller items, including its marble and wood side-tables.

Commenting on the company's experience of the 2018 event, Account Handler Marlyn Aragones said: "It's certainly busier than last year and we've received a lot of interest. We are mainly interested in overseas buyers, however, partly because none of us speak Chinese. Also, the Chinese purchasers that are in attendance tend to only want to place very small orders."

Similarly looking more to the international markets was Maxi Power, a Shenzhen-headquartered contemporary-furniture manufacturer. Originally established in Taiwan in 1986, the company shifted its base of operations to the mainland in 1998. Despite that, it has retained its international focus, with the majority of its products destined for the UK, Dubai, Australia or Japan – markets where its largely veneered range is more popular.

Clearly not entirely satisfied with its 2018 reception, Sales Manager Linda Gu said: "Last year at this show, there were a lot more serious buyers. That's something of a blow to us given that, like many in the industry, we are facing increasing competition from countries such as Vietnam and India, where costs are so much cheaper. As a result, we've had to invest in a higher-level automation while experimenting with a different mix of materials in order to bring our costs down."

Photo: The funkier furnishing zone: International innovations under inspection.
The funkier furnishing zone: International innovations under inspection.
Photo: The funkier furnishing zone: International innovations under inspection.
The funkier furnishing zone: International innovations under inspection.

The China International Furniture Expo 2018 took place from 11-14 September at the Shanghai New International Expo Center.

Chen Rong, Special Correspondent, Shanghai

Content provided by Picture: HKTDC Research
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