Challenges create new opportunities
The Asian furniture manufacturing industry faces serious challenges due to various factors resulting from the recent Covid global pandemic and the ongoing Russian war. For example, American and European furniture demand has dropped drastically. Supply chain disruptions, fluctuation of raw material costs, and shortage of workers are common factors manufacturers encounter. This situation is even worse for manufacturers focusing on lower-end furniture who traditionally produce large volumes of low-cost products sold at very low margins.
The recent furniture exhibitions held in South East Asia prove a general lack of innovative designs amongst Asian manufacturers, and few are interested (or capable?) of adapting to the current economic situation. However, a few manufacturers focus on the medium and higher-end markets, introducing new designs and materials, thus creating a range of furniture that attracts foreign buyers.
The Covid pandemic forced many people to work from home, resulting in a rise in demand for multi-functional furniture. Multi-purpose units have gained popularity, providing combined storage, seating, and sleeping options. There are also growing environmental concerns, increasing the demand for wooden furniture made from sustainable sources and eco-friendly materials. Some designers combine wood and non-wooden materials, creating simple and clean designs with natural finishings, while others play with bold colours. It also seems that “retro” and “vintage” looks are in higher demand again.
Overall, the short & medium-term outlook for Asian mass furniture manufacturers is very dim. Those adapting to changing market conditions and capitalizing on emerging opportunities have a much higher chance of success.