Export opportunities for wood and furniture with cross-border e-commerce

Diversifying risk and increasing sales

During the "Cross-border e-commerce workshop - Global growth opportunities for Vietnam's wood and furniture export" held on March 8, Ms. Duong Minh Tue, Vice President of the Handicraft And Wood Industry Association of Ho Chi Minh city (HAWA), stated that Vietnam's wood industry, as one of the world's leading wood suppliers, has expanded its target range and reached key markets around the world such as the United States, the EU, South Korea, Japan, and emerging markets such as the UAE, India, etc.

"Thanks to its strengths in forestry development, support policies for local businesses, and free trade agreements, Vietnam's wood and wood product exports have achieved considerable success on the global stage. Notably, Vietnam is currently the leading furniture supplier to the US market.

The Vietnam's wood industry benefits from a favorable position which allows it to capitalize on strong demand from domestic and international markets. On the other hand, businesses are investing in modern technologies and digital transformation to develop new products, services, enhance competitiveness, increase efficiency, and productivity," noted HAWA Vice President.

According to Ms. Tue, traditional export market segments have faced significant challenges due to stagnated global economic growth, weak global consumer demand, increasing protectionist barriers, and strict monetary policies from multiple countries around the world. Conversely, e-commerce sales of furniture and handicrafts are experiencing remarkable growth.

Ms. Tue believes that businesses within the wood industry must explore different sales channels, and increase recognition and access to diverse customer files to diversify risks and increase sales. "Participation in e-commerce platforms is a new trend of development for Vietnamese wood businesses. A small number of businesses have participated in selling products through e-commerce platforms such as Wayfair, Amazon, Amass to relatively promising results," Ms. Tue reported.

Vietnam's E-commerce Exports Expected to Grow by 20% Annually

According to Ms. Nguyen Thanh Yen My, Senior Account Manager of Amazon Global Selling Vietnam, the unabated growth of global e-commerce presents a new form of export which supplements the development of small and medium businesses. "Vietnam currently ranks in the top five countries with the highest growth rates in terms of e-commerce globally. The country provides ample opportunity for cross-border e-commerce development. It is a 'land of promise' for all businesses," Ms. Yen My remarked.

Estimates suggest that between the years 2020 and 2027, the comprehensive growth rate of global cross-border retail e-commerce increased by 28.4%. Notably, Southeast Asia stands as the region with the fastest growth rate of online sales globally, with e-commerce exports in Vietnam expected to grow by over 20% annually.

According to Ms. Nguyen Thanh Yen My, e-commerce in the furniture industry in the United States, Vietnam's largest export target, is projected to increase exponentially within the next four years, with the potential of reaching 118.6 billion USD by 2027.

Surveys indicate that there has been an increase in demand for home care and decoration among Americans following the COVID-19 pandemic. Furniture items such as personalized wooden gifts, wooden products, bookshelves, shoe racks, kitchen shelves, bathroom cabinets, wardrobes, and compact desks are relatively popular on e-commerce platforms.

"Vietnam has numerous experienced wood processing factories, diverse and high-quality raw materials, and skilled labor. Additionally, Vietnamese goods can easily be imported into large markets around the world thanks to its involvement in numerous free trade agreements. Consequently, the effectiveness of Vietnam's wood furniture exports will increase considerably by leveraging these advantages.

Manufacturers should prioritize products that are easy to disassemble, assemble, package and transport, compact in size, and cost-effective when selling on e-commerce platforms," Ms. Yen My advised.

Mr. Jimmy Wang, Senior Supplier Sourcing Manager at Wayfair, noted that numerous Chinese suppliers have been buying Vietnamese furniture and reselling through cross-border e-commerce.

"So why aren't Vietnamese manufacturers leveraging their own strengths to directly sell to customers through cross-border e-commerce?" Mr. Jimmy Wang raised the issue. Furthermore, according to Mr. Jimmy Wang, online customers may experience hesitation due to a lack of physical contact with the product.

As a result, effective online sales require sellers to prioritize comfort, and actively advise customers on the products they want to buy. Additionally, customer service and delivery are crucial factors.

"E-commerce platforms currently provide a wide range of services to support businesses, which include posting products online, packaging, shipping, and product returns," Mr. Jimmy Wang stated.