Question

do the national or international market analysis of trading of the Chinese furniture industry.
Write a report (not less than 3000 words) about importing and exporting of the Chinese furniture industry.

Answer 1

Ans- The Chinese furniture industry is the biggest of its kind in the world. China is the number one furniture producer(sells internationally), consumer(national consumers) and exporter. The industry maintained an astonishing and a realistic growth rate of 17% between 2006-2016. The production side of Chinese furniture industry accounts for around 39% of the world’s furniture production. Chinese furniture manufacturers produce various types of furniture from house furniture to office supplies. Mainly the Greater Bay Area plays an important role in production. Over 70% of the country’s furniture manufacturers are headquartered in the GBA area, because the GBA has a lot of technical and labour resources. GBA has various labour resources which becomes the main reason for the increasing sales of furniture Initially.However, recently a shift is taking place in where the furniture itself is being produced. The Chinese furniture industry is slowly moving from the Eastern and Southern coastal regions to the central region of China.

There are a variety of reasons why China is the number one consumer of furniture in the world. Furniture is a basic need in every household.People who mostly just started living on their own or are newly married have the highest demand for furniture. Furthermore, the Chinese middle-class has been growing rapidly and has led to an increased demand for higher quality products. This is just a mere part of domestic consumption. Internationally, chinese exports a big amount of furniture to foreign countries.Moreover, urbanization is a major cause for demand. According to the latest data released by the National Bureau of statistics; at the end of 2017 the urbanization rate in China was 58.52%, an increase of 1.17% from the previous year. (Data from a source).

Chinese consumer have an increasing taste for environmental friendly furniture. They prefer furniture made from natural and eco-friendly materials. This demand is not only caused by caring for the environment, but also out of fear for chemicals harming the well being of the customer.

Lastly, intelligent furniture is becoming a trend. According to IDC’s quarterly tracking report on the smart home equipment market in China, shipments of smart home devices in China are expected to reach 150 million units in 2019. The intelligent furniture trend is not only popular in the Chinese furniture market. Mobile phone manufacturers, like Huawei and Xiaomi, and Internet Giants, such as Baidu and JD.com, are actively promoting intelligent furniture.(source-1421.consulting).

Internationally, in 2017, the total amount of imported furniture grew with 15.65% to 30.52 billion USD. There are three ways how a foreign furniture company can enter the Chinese furniture industry: by exporting furniture to China in their original packaging, through manufacturing consignment agreements, and by establishment of a local company.

The furniture that is imported from abroad has a relatively low market share in China, because it is often sold for a high price and is seen as a more high class product. In manufacturing consignment agreements foreign furniture brands entrusts Chinese factories with the production of their goods. However, if the furniture brand is not registered as a company in China, it cannot sell the produced furniture in China. Therefore, all produced furniture has to exit the country first, before returning China to be sold. This is the only way for unregistered companies to legally sell their products in China, even though the furniture is produced in China.(source).

The largest furniture exhibition in China is the China International Furniture Expo, held 9-12 September 2019 in Shanghai. The China International Furniture Expo, better known as Furniture China, has been leading in the industry for over two decades. As one of the world’s leading B2B trade fairs, over 100,000 participants are involved in the show every year. 300,000 square meter of exhibition area and 3500 high quality suppliers.

Before China, Italy was the largest exporter of furniture. However, in the year 2004, China became the country with the highest number of furniture exports. From that day on there has been no looking for this country and it is still providing the world with the most amount of furniture. Many of the leading furniture designers have their furniture produced in China, although usually, they avoid talking about it. The population of China is also playing a vital role in making this country the biggest exporter of many products, including furniture.