Rising Affluence in China Diminishes Furniture Makers' Cost Advantage
Increasingly more makers
2010/08/23 | By CENSThe American Chamber of Commerce head in China said on TV recently that the emerging nation's economic growth is on a steady uptrend, where its size was a mere thirtieth of America's some years ago, but now has grown to an eighth. And China's new car market exceeded the American counterpart in volume in 2009; while wages in IT and automotive factories in southern China have been raised recently. So the standard of living in China is paralleling the growing affluence, with greater spending power also fueling the housing market, so much so that the government considered deflating the bubble. As more people own homes, so rises the demand for furniture.
Going Upmarket
However, rising living standards in China also tend to diminish its cheap labor advantage. So furniture makers in China, challenged with higher land cost too, have been forced to develop more sophisticated, high-end products to go upmarket, both at home and abroad.
Especially for export-oriented furniture makers, rising eco-awareness in Europe and elsewhere is shaping demand, which seems to revolve around simplicity and eco-friendliness. The green trend is no fad for even China is promoting, for example, installing energy-efficient street lighting. To lag global trend is to be left behind in business. So Increasingly more furniture manufacturers are trying to use recyclable materials, reduce using hazardous chemicals to build green products.
In 2009 of the tens of thousands furniture makers in China, nearly 900 made dining room sets, turning out mainly Chinese, European and American dining tables and chairs. While most had been export-oriented, increasingly more have in recent years refocused on the domestic market.
Der Chyuan Furniture Co., Ltd., established in Dongguan, Guangdong Province in 1998, specializes in dining room furniture, but also occasional furniture as coffee tables, end tables, TV stands, planter stands, cabinets etc.
The company employs over 300 persons in a 20,000 square meter factory. “Backed by over 20 years of field experience, we can generate products to meet different demands. Our dining room sets are mainly made of solid wood lacquered with dark tones, imparting elegance, classical charm, warmth and nobility,” says a senior manager.
“Our dining room sets are focused on the mid- and high-tier segments in the Middle East and North America. Currently the Middle East takes a lion's share of 60% of our total dining set exports, and North America, including the United States and Canada, accounts for 20%; while Europe makes up the remaining 20%,” he adds.
Unlike other furniture items, designing dining tables and chairs involves less trendiness and change, instead tending towards moderation and conservativeness, which explains seldom seen novelty and boldness in style. So, Der Chyuan rolls out only one or two new models of dining room furniture a year, in contrast to 20-30 new designs for coffee tables.
In addition to design, the company pays attention to safety, comfort, and practicality, and has recently developed a series of ergonomic dining room sets that are highly promoted in the market now.
Modern Home Furniture
Modern Home Furniture Co., Ltd., a Taiwanese-invested furniture manufacturer, is also located in Dongguan and spread across 30,000 square meters. Having been in business in China for about 10 years, the company is today a leading furniture maker there with over 400 workers.
“With achieving quality as the lifelong corporate goal, we import advanced machines and facilities to fabricate high-end furniture, as well as sparing no effort to keep up to ever-changing market trends, always developing innovative products to meet global taste shaped by different culture, habit and living standard,” says Robert Liu, sales manager.
Not only does this maker offer wide-ranging products, including dining room sets, metal beds, computer desks, occasional tables, dressing mirrors and consoles, but also stays sensitive to rising global awareness for eco-friendliness, consistently applying recyclable materials as metal, glass and wood.
Dining room sets are major players in the company's range, of which three to four new models are introduced a month. “Our dining room products are innovative, diverse and stylish, so are very popular among buyers in the United States, Germany and the United Kingdom,” says Liu, who captains a strong R&D team and skilled workers to be committed to roll out innovative, quality products to satisfy customers globally.
Jiangsu Schihome Furniture
Introducing Italian-styled furniture into China as early as 1999, Jiangsu Schihome Furniture Co., Ltd. has grown into a renowned maker of branded furniture, building a nationwide marketing network of more than 600 sales outlets.
The company has four production bases in China: one in the east (Suzhou, Jiangsu Province), the south (Foshan, Guangdong Province), the north (Beijing), and the west (Chengdu, Sichuan Province).
Jiangsu Schihome turns out mostly upholstered sofas, beds, and metal & glass furniture, exporting to nearly 30 countries but mainly Europe, including Germany, Italy, France, UK, and Belgium as well as Asia including Japan, South Korea and Singapore.
In recent years the company has increasingly been focusing on producing dining room furniture, made of mostly recyclable wood and metal that feature simplicity in design and glamour in style. With well-established marketing channels, the company has for years successfully promoted products both at home and abroad, solidifying a good reputation as well.