Wooden furniture producers prefer outsourcing, reluctant to build brands
Vietnam is a big woodwork exporter, but products are labeled as foreign made, with few local brands.
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Smith has been running his business with Vietnamese staff, from designers to producers. He uses cajuput (Acacia auriculiformis) timber as the major material.
Theodore Alexander is now a well known brand in the international wooden furniture market. However, in Vietnam, few enterprises can build up brands of their own.
Vietnam has 4,500 woodwork and forestry product enterprises, of which 1,800 enterprises make products for export, according to the Ministry of Agriculture and Rural Development (MARD). Vietnam-made products are present in 120 countries and territories.
However, the country is still far from becoming a leading center in the world in woodwork and non-timber forest product (NTFP) because it is not a strong brand.
The value chain in the forest product processing industry includes production, trade, design and branding, according to Hawa (Handicraft and Wood Industry Association of HCM City) chair Nguyen Quoc Khanh.
Vietnam is still weak at branding.
As the fifth biggest exporter of woodwork and forest products in the world, the second largest in Asia and ranked first in Southeast Asia, Vietnam aims to export $11 billion worth of woodwork this year.
The target was set by MARD in the context of the dollar price increase, which can reduce production costs and improve product competitiveness in the world market.
However, experts doubt the goal is attainable, saying that current conditions do not facilitate exports.
International forecasts say that with 10-year recession cycles, consumers may tighten their purse strings if a recession occurs. They will use old furnishings or buy second-hand products rather than brand new ones.
Experts said it would be better for Vietnam’s enterprises to build their brands and sell products under their names. This would allow them to approach more clients and increase sale opportunities.
AA Corporation, which now has products in 50 markets, allocates big budgets to branding, which it considers an important task.
Branding helps increase the commercial value of products and positions Vietnam’s woodwork industry on the world map.
Instead of working with intermediaries, AA works directly with project owners and designers to provide products, and it advertises its brand directly to investors.
