| Vietnam -- The New Taiwan? How Vietnam is Making Her Voice Heard in the Global Wood Furnishings Industry |
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As a child, I was taught that products marked "Made in Taiwan" were synonymous with cheap junk, and, more importantly, a sign of the theft of American jobs by cheap Asian labor markets. As American manufacturing grew and matured throughout the latter half of the 20th century, however, and our labor and facilities costs rose, less expensive foreign goods, particularly clothing, furniture, and household items, became increasingly hard for American buyers to resist. As the imports began to encroach on our home-grown products, we were repeatedly reminded that "buying American" saved American jobs, and buying those imported items was downright unpatriotic.
As a child, I was taught that products marked "Made in Taiwan" were synonymous with cheap junk, and, more importantly, a sign of the theft of American jobs by cheap Asian labor markets. As American manufacturing grew and matured throughout the latter half of the 20th century, however, and our labor and facilities costs rose, less expensive foreign goods, particularly clothing, furniture, and household items, became increasingly hard for American buyers to resist. As the imports began to encroach on our home-grown products, we were repeatedly reminded that "buying American" saved American jobs, and buying those imported items was downright unpatriotic. Over time, however, as Asian manufacturers matured, the quality argument could no longer be made, and the Law of Supply and Demand won out. Without externally imposed tariffs, lower prices will always woo consumers, and so, imported Asian goods became staples of the American buyer's diet. This was nowhere more true than in the home furnishings industry, where shoppers could save a bundle by buying imports. Something else happens over time, however, as the manufacture of cheap exports thrives in a country. Japan, Taiwan, and China have all seen their labor costs rise as the fruits of their laborers gradually transformed poverty-stricken rural communities into busy commerce centers. "Cheap labor" never stays that way for long, and for that reason, new sources of lower-wage employees must be sought. Today's up-and-coming manufacturing center, at least for wood furniture, is Vietnam. Since 2001, Vietnam's share of the U.S. furniture market has risen from a negligible 0.1% to a strong second behind 1st-place China, now at 8.3%. China is still far and away the market leader here, providing almost 64% of our imported furniture, a number that has steadily risen, and almost doubled from the 37% seen in 2001. There is no reason to doubt China's continued dominance in this market, however, Vietnam already has double the share of the next biggest competitor, Malaysia, while once-powerful Taiwan has fallen to one-third of its turn-of-the-century share, with only 2.4% in 2008. Can Vietnam continue its climb to the top? That will depend on her response to a number of challenges currently faced. Besides cheap labor, Vietnam is not particularly well-endowed in some of the other needed inputs for furniture manufacture. Vietnam does not currently have a strong domestic timber industry, and imports 70-80% of the raw materials used. Also, chemicals, needed to treat wood products bound for the home furnishings market, and textiles used for seat cushions and coverings, are not readily available. Despite these challenges, however, Vietnam's future in furniture exports looks bright. The country has an advantage over China, inasmuch as U.S. tariffs on Chinese wood products are stiff and no such tariffs have yet been imposed on Vietnamese imports. Vietnam's products have also developed a reputation for quality craftsmanship and unique, detailed designs. To show their commitment to this burgeoning industry, Vietnam now holds its own annual furniture expo, the Ho Chi Minh City International Furniture and Handicraft Fair and Exhibition (HCMC Expo). Clearly, Vietnam would like to replace China, Taiwan, and the other Asian importers as the new "Made in..." here in the U.S., the primary recipient of its fine manufactured wood products. If the American market continues to gobble up her wares as it has, Vietnam's almost exponential rise should continue. More information: Learn more about wood furniture at Room2Eat Tables & Chairs, the online store owned by author and market researcher, Maria B. Spicer. At her store you can find a new accent table, living room table, dining room table, or anything else you need for your home.
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