Traditionally, consumers around the globe made the decision to purchase furniture based on the price, style and reputation of the retailer from whom the purchase was made, said Nguyen Ton Quyen, chairman of Viforest.
This resulted in poor brand awareness by consumers, said Mr Quyen, but even more importantly it gave rise to a lackadaisical attitude among local manufacturers for developing their brands.
Over the past decade, manufacturers in markets such as the US, EU, China, Canada, Taiwan, Mexico, and Italy have rapidly been establishing their own dedicated retail outlets and showrooms worldwide.
In addition, every major manufacturer in the aforementioned markets now has a web site dedicated exclusively to marketing and brand building, said Mr Quyen, — and they have proven quite effective.
Most of these manufacturers have no intention of selling direct to consumers via the Internet but have learned to use the Internet effectively to gain large-scale visibility that is impossible to obtain in traditional brick and mortar stores.
This lack of brand development has severely handicapped local manufacturers when it comes to competing with the foreign rivals in the industry who have established household names the likes of UMA or IKEA.
Vo Van Quyen from the Ministry of Industry and Trade agrees with Mr Quyen.
Local manufacturers have also neglected the domestic market and wasted too much time trying to make inroads into China and other foreign markets, said Mr Quyen, adding that the outward approach has been unsuccessful for the most part because of their low brand recognition.
“The failure to develop strong brand name recognition in the domestic market has created a huge opening for the foreign competition who are swarming onto the market as a result of the ASEAN Economic Community (AEC) formation,” said Mr Quyen.
The AEC is going to bring about an even greater influx of less expensive imports making products such as those from Swedish home furnishing giant IKEA much more competitive and most likely allow for them to corner the domestic market.
The household furniture industry in Vietnam consists primarily of producing wood and wood veneer sofas; dining tables; convertible beds; along with television, radio, phonograph, and sewing machine cabinets.
Furniture manufacturers from China, Canada, Taiwan, Mexico, and Italy have dominated the global furniture market for the past several decades, accounting for in upwards of 75% of the market.