Furniture and handicrafts makers need help penetrating home market

Since 2009, when the global economic crisis broke out on the world, Vietnam’s wooden furniture and fine handicrafts producers have turned their attention to the neglected home market. It’s got ‘lots of potential,’ they say. However, they have just scratched the surface, reports Saigon Tiep Thi, and sorely need some experts on distribution to help them out.

At the Tan Toan Phat Company, a leading pottery exporter, its deputy director, Nguyen Phuoc Hien laments that Vietnamese people don’t think of vases or pots as decorations in their home.  They purchase such things only a few times in their life and they consider them as something to use until they become broken.

Still, Hien adds, the habits of the Vietnamese people are changing little by little.  Further, he’s sure, foreign-made pottery products, including Chinese products, cannot compete with his company’s wares.  Every pot, every vase is totally hand made; each has its individual characteristic and a ‘soul’.

All it takes to develop our home market, Hien muses, is an effective distribution system . . . .”

Selling ‘just temporarily’ on the home market

Three years ago, Lam Hiep Hung Company had already established a name as a maker of wicker furniture for export.  Now export orders have dropped, and for two years the Binh Duong province company has been selling on the domestic market.  It’s just to earn money to feed the company’s workers, explains a manager, Nguyen Minh Hoang, while the company waits for export demand to rebound.

Hoang said Lam Hiep Hung’s wicker furniture has selling very well in the home market, because it is of high quality, reasonably priced and has been tweaked to appeal to the taste of Vietnamese people. There’s a problem, though: domestic consumers aren’t used to ordering in advance; when they want something, they want it now.  To meet such demand, the company must keep products in inventory.  That raises a lot of problems, including warehousing and a distribution network, that require substantial capital investment.

Nguyen Vu Company also said that it has been developing a nice home market for its acacia wood products.  “We have 5000 hectares of acacia forest and we have modern equipment so our products are good quality at reasonable prices,” said Vo Ngoc Than, Deputy General Director of Nguyen Vu.

As for Gia Long Art, which has just turned back to the domestic market during the last year, the ratio of domestic and export sales is 50/50.  “Our home décor products are modern, sleek and attractive, and not too big or heavy, and we’re able to offer them at reasonable prices,” says Director Nguyen Viet Tien.  “But, to really ramp up sales of our products here in Vietnam, we need to have official distributors.”

Some one needs to take the lead

Nguyen Van Nhan, Deputy Director of NTN, another company that specializes in making composite-made furniture and high quality fine art products, said that its products cannot be sold on the internal market because it still does not have a distribution network. Nhan aspires to have a professional network through which he can market many kinds of high quality products.  It’s possible now, he thinks, because Vietnamese people’s living standards have considerably improved.

Tri Quang Company currently just fills orders from foreign partners. “We are making products mainly for export,” said Ly Huu Quoi, Deputy Director of Tri Quang. “If we were to sell domestically, we would have to have a distribution network and a chain of shops.  To do that, we would need huge sums of capital.”

Again and again, the story is the same.  The Binh Phu Furniture Co. is mainly exporting products to the US and Europe, and only selling five to seven percent of its output in Vietnam. Phu Tai Woodworking also has the same problem – no distribution network.

Nguyen Van Vy is secretary of the Handicraft & Wood Products Industry Association of HCM City (HAWA).  Vy says that last year the association organized a workshop on establishment of a professional distribution network within Vietnam but so far nothing has been decided.  Vy said that in December, HAWA will organize a trade fair focused on wood furniture and fine arts products for the domestic market. He emphasizes that the domestic market will still be important to the association’s members in 2010, awaiting the full recovery of the global economy.

In 2009, Vietnam exported $2.6 billion worth of wooden furniture and fine art products.

VietNamNet/SGTT

Tags: Vietnam Furniture makers, Vietnam handicrafts makers