Furniture Market Report 2009.9

8/8/2019 Furniture Market Report 2009.9

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FURNITUFURNITUFURNITUFURNITURE MARKET IN CHINARE MARKET IN CHINARE MARKET IN CHINARE MARKET IN CHINA

MARKET RMARKET RMARKET RMARKET REEEEPORTPORTPORTPORT 2002002002009999


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TABLE OF CONTENTTABLE OF CONTENTTABLE OF CONTENTTABLE OF CONTENT

1.1.1.1. INTRODUCTIONINTRODUCTIONINTRODUCTIONINTRODUCTION .... 3

2.2.2.2. MARKET OVERVIEWMARKET OVERVIEWMARKET OVERVIEWMARKET OVERVIEW 4

3. INDUSTRY LANDSCAPE3. INDUSTRY LANDSCAPE3. INDUSTRY LANDSCAPE3. INDUSTRY LANDSCAPE ... 6

4444. PRODUCTION OVERVIEW. PRODUCTION OVERVIEW. PRODUCTION OVERVIEW. PRODUCTION OVERVIEW .. 8

4.1 Product Quality and Production Technology 8

4.2 Production cost . 9

4.3 Product Trend ... 10

5555. IMPORT. IMPORT. IMPORT. IMPORT----EXPORT ANALYSISEXPORT ANALYSISEXPORT ANALYSISEXPORT ANALYSIS ...... 12

5.1 China Import .... 12

5.2 China Export ..... 17

6666.... DISTRIBUTION SYSTEMDISTRIBUTION SYSTEMDISTRIBUTION SYSTEMDISTRIBUTION SYSTEM ... 20

7777. GOVER. GOVER. GOVER. GOVERNNNNMENT POLICIES AND REGULATIONSMENT POLICIES AND REGULATIONSMENT POLICIES AND REGULATIONSMENT POLICIES AND REGULATIONS ..... 21

8888. CONSIDERATIONS FOR ITALIAN PLAYERS. CONSIDERATIONS FOR ITALIAN PLAYERS. CONSIDERATIONS FOR ITALIAN PLAYERS. CONSIDERATIONS FOR ITALIAN PLAYERS .... 22

9999.... CONCLUSIONS AND RECOMMENDATIONSCONCLUSIONS AND RECOMMENDATIONSCONCLUSIONS AND RECOMMENDATIONSCONCLUSIONS AND RECOMMENDATIONS ...... 23

APPENDIXAPPENDIXAPPENDIXAPPENDIX ... 25


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1. I1. I1. I1. INTRODUCTIONNTRODUCTIONNTRODUCTIONNTRODUCTION

ObjectivesObjectivesObjectivesObjectives

The objective of this market briefing is to provide a general overview of Chinese

furniture industry.

Doing market researchDoing market researchDoing market researchDoing market research in China and Methodologyin China and Methodologyin China and Methodologyin China and Methodology

Generally speaking, conducting market research in China is different and

significantly more challenging than it is in developed countries because of

1) The size and diversity of the country;

2) Lack of fully reliable centralized or official information databases;

3) The change is constant and extremely rapid the whole China economic system

is far from being in equilibrium

Therefore, our methodology leverages a combination of resources & activities such

as secondary research in both Chinese and English, primary research and interviews

with industry exports, as well as our collective China knowledge and industry

expertise.

Information SourcesInformation SourcesInformation SourcesInformation Sources

Key sources of information for this report include all background information,

several secondary sources such as Association of China Furniture Industry, China

Customs, interviews with industry experts and proprietary databases.

In the report, sources are mentioned for chart, tables and key data. Secondary

sources include dozens of Chinese and English sources (News reports, publications,

trade journals, government statistics and bulletins, etc, as well as all companies

web sites, press release etc.).


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2.2.2.2. MARKET OVERVIEWMARKET OVERVIEWMARKET OVERVIEWMARKET OVERVIEW

Chinas furniture industry has grown rapidly since China started its market-oriented

economic reform and opening towards the outside world in 1978s. China's

furniture production and export have shown rapid growth in the last ten years.

According to the data from China National Furniture Association, the production

value of China furniture industry in 2008 was US$ 42.81 billion, increased 20.38%

compared with year 2007. The total sales revenue for furniture manufacture

industry was US$ 41.20 billion, increased 20.6% compared with year 2007. As to the

export value of China furniture industry, the total export value is US$ 27.58 billion

in 2008, increased 21.94% compared with year 2007. China has replaced Italy as the

first country to export the furniture and accounting over 20% of the total world

trade in 2008.

China Furniture Industry

0.00

5.0010.00

15.00

20.00

25.00

30.00

35.00

40.00

45.00

2006 2007 2008

US$ billion

Production

Value

Sales Revenue

Export Value

Source of data: China National Furniture Association


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In 2008, the total volume of furniture production was 518.7 million pieces, dropped

1.91% compared with year 2007. A wide of variety of raw materials are used in

production, including wood, rattan, plastic and metal. Wooden furniture used to

be the major production and exports of the industry, but recently it has been

overtaken by metal furniture. The total production for wooden furniture was 189.5

million pieces while the total production for metal furniture was 264.4 million

pieces in 2008.

China offers a huge potential market for furniture makers. The increasing

consumption power of Chinese people, its booming property market and

promising tourist industry would drive the demand for both residential and hotel

furniture, as well as other higher-end products.

According to official statistics, each year China completes infrastructure area of 1.2

billion square meters, among which 500 million square meters are for civilian

households. That is to say, each year about 5 million families need to upgrade their

furniture, not to mention the booming demands for office and public facilities.

China National Furniture Industry Association estimates that by the end of 2010,

the total output value of Chinese furniture industry will reach USD 40 billion,

among which export value will account for 25% of the total.

Lured by the market potential, some foreign companies are actively seeking for

suitable entry to the Chinese furniture market. Hong Kong, Shanghai, Beijing and

some other international cities in China now act as platforms for these companies

to enter the mainland market with its long-time experience in production and

distribution network on the mainland, as well as the reputation for their good

quality, integrity, reliable delivery and management.


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INDUSTRY LANDSCAPEINDUSTRY LANDSCAPEINDUSTRY LANDSCAPEINDUSTRY LANDSCAPE

Overall, the furniture industry in China is highly fragmented, with over 50,000

furniture manufacturers in total. These companies engage in a wide range of

products including household, office and kitchen furniture, as well as mattresses,

bedding and parts of furniture. The majority of them are small-medium sized

producing simple and low value furniture or OEM orders. They are geographically

centralized primarily in the East Coast provinces. In the terms of the number of

furniture produced, the top five provinces were Guangdong (156.8 million pieces),

Zhejiang (139.5 million pieces), Fujian (86.2 million pieces), Shandong (39.2 million

pieces) and Liaoning (19.2 million pieces). All these five provinces are economically

developed coastal areas in the country. In total, the furniture production by the

five provinces account for about 85% of the national production. Approximately

one third of the total furniture production and half of the export are from one

Southern province Guangdong.

Source of data: China National Furniture Association


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Competition is intensive in the world furniture industry. Furniture manufacturers

and exporters are suffering from decreasing profit margins. Many companies strive

to reduce their cost of production and increase efficiency. Some relocate their

manufacturing operations to other areas with lower operation cost, such as the

Chinese mainland. For example, IKEA has set up production bases in Tianjin,

Shanghai and Chengdu. On the other hand, foreign manufacturers are taking steps

to strengthen their domestic production through product specialization. For

example, some US companies focus on popular wood species not available

elsewhere.

China furniture manufacturers have also started to develop their own brands.

Notable examples include mattress manufacturers marketing their own brands in

the local and overseas markets. Furniture manufacturers also become more careful

about the choice of raw materials to meet international standards, such as

compliance with legal or other environmental requirements in their target markets.

To most furniture manufacturers, the major source of raw materials is local market

and oversea market, including South East Asia, South America and Russia.

Nowadays, some Chinese furniture manufacturers also set up the head office in

Hong Kong acting as a controlling office principally responsible for high

value-added services such as management, finance & accounting and marketing.

Production plants have been set up on the Chinese mainland to utilize the

advantage of lower operation cost and abundant land supply there. Many of these

establishments have been classified as engaging in import-export.


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4444.... PRODUCT OVERVIEWPRODUCT OVERVIEWPRODUCT OVERVIEWPRODUCT OVERVIEW

4444.1 Product.1 Product.1 Product.1 Product Quality and Production TechnologyQuality and Production TechnologyQuality and Production TechnologyQuality and Production Technology

Quality has long been an issue with the industry but the tide is changing. Many

Chinese manufacturers pay more attention to the quality and continuity of supply,

and move away from volume. Leading manufacturers usually have strong designcapability, while accommodating to OEM orders from overseas buyers. Some even

specialize in the manufacture of higher-end set furniture for hotels, offices and

other real estate projects under tender-contracts. To maintain globally

competitive, leading furniture manufacturers strive to reduce costs, initiate quality

control, improve design concepts and capability, upgrade management skills and

increase marketing and sales effectiveness. Many manufacturers have obtained ISO

9000/9002 certification.

China has been massively introducing foreign state-of-the-art machinery in order

to improve its production technology since 1980s. In the meantime, Chinese

machinery technology has been improving all the time, initially by copying

imported machinery. Today, Chinese furniture machinery manufacturers have

considerable research and development capacity to provide new production

technologies and machinery to meet the need of the furniture industry.


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4444.2.2.2.2 Production CostProduction CostProduction CostProduction Cost

Labor rates in China average approximately Euro 0.5 per hour, about 20 times

lower than that in Europe. Further, China has a seemingly never-ending labor force.

Currently, Chinese furniture manufacturers recruit workers from rural areas where

about 800 million people live. These people represent an overabundant supply of

cheap labor, almost guaranteeing that wage rates will remain low for many years

to come. In the past, high employee turnover caused many Chinese manufacturers

to operate inefficiently. However, manufacturers are investing resources in

training and development to attract and retain skilled employees.

Another important cost difference between China and Europe is overhead, which

includes all manufacturing costs, excluding direct labor, freight and raw materials.

Whereas steady furniture demand from the domestic and overseas markets has

pushed Chinese manufacturers to quickly increase capacity, the investments have

not been a hindrance. Low construction costs in China permit manufacturers to

rapidly expand while keeping the low cost advantage.

Additionally, Chinese factory owners are not subject to the same building

standards that European firms face. Many Chinese factories have insufficient dust

collection system, poor or no sprinkler systems, and lack many other safety and

convenience features typically in developed countries. This minimalist approach

not only reduces overhead costs, but also keeps the initial investment low.


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4444.3.3.3.3 Product TrendsProduct TrendsProduct TrendsProduct Trends

Currently, there are many different kinds of furniture in the market, mainly are

home furniture, hotel furniture, office furniture and public furniture. As for the

home furniture, people pay more attention on the living tasty and the personal

furniture. Therefore, the following characteristics are considered by customers,

when they are choosing the furniture.

Simple, Cultured and Personal Design

Raw Material

Chinese and European classical style

Eastern and Western mixture modern style

Furthermore, the following characteristics are going to be popular in the Chinese

market.

Kitchen furniture:Kitchen furniture:Kitchen furniture:Kitchen furniture: The idea of the completed kitchen furniture is accepted by

more and more people lived in the cities. This market shows the positive

development trends and is huge potential market. Today, the Chinese new

generation want to show their personality through all different parts of their lives.

Green furnitureGreen furnitureGreen furnitureGreen furniture: As a result of the increasing awareness about environmental

protection and more stringent legal requirements worldwide, Chinese furniture

manufacturers are more cautious in choosing the materials for production. For

example, they use fabrics that do not give off toxic fumes in the production process,

such as polypropylene. In order to reduce the consumption of wood, some

alternative materials are used in view of environmental concerns. Some

manufacturers are also making furniture from recycled products, such as reclaimed

wood and old teak from wood building.

Except for recycled plastics and discarded metal, stone and even tri-wall, a strong

cardboard commonly used in packaging, are used in making furniture. With

innovative designs, some even become a fashion and have created the heat of


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"green furniture" in the western market. In the meantime, metal, which was rarely

used in residential furniture, has increased its presence in the sector.

MultiMultiMultiMulti----functionalityfunctionalityfunctionalityfunctionality:::: More flexible, functional and smaller furniture, which

incorporates more than one function, is popular. The demand for this type of

furniture is not limited to people living in small quarters but also people who are

cluttering up with stuffs. Products such as a raised bed with lots of storage space

underneath and folding chairs hung on a wall can help provide storage solution

and free space on the floor.

Simplicity and neutral coloursSimplicity and neutral coloursSimplicity and neutral coloursSimplicity and neutral colours:::: Simple lines and clarity in design will be the maintrend in terms of new furniture styles. Neutral colours, including earth tones,

cream, and black and white to orange (softened to coral, peach and copper) and

red, will be the major tone.

Home office, RTA and DIY furnitureHome office, RTA and DIY furnitureHome office, RTA and DIY furnitureHome office, RTA and DIY furniture:::: There is an increasing demand for home

offices in order to meet the need for people working from home, early retirements

and layoffs. Leather and heavier durable fabrics are the majority for upholstered

furniture. Ready-to-assemble (RTA) and Do-it-yourself (DIY) furniturehave gainedpopularity around the world, especially in Europe and North America. Chinese

furniture manufacturers, who are becoming more export-oriented, are producing

more such products to fit the increasing demands from domestic and overseas

markets.


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5555.... IMPORTIMPORTIMPORTIMPORT----EXPORT ANALYSISEXPORT ANALYSISEXPORT ANALYSISEXPORT ANALYSIS

Since China entered the WTO for several years, and implemented the related

regulations, China has replaced Italy as the largest furniture export country in the

world. Obviously, it will incur more competition for furniture industry.

In the Chinese furniture market, the total value of importation was much smaller

than the total value of exportation. The imported furniture products are mainly

mid-high class furniture and special furniture whose price is triple or even higher

compared with that of domestic furniture. For those foreign furniture companies

want to enter the Chinese market, they must provide the good products satisfied

by local customers, also with suitable price.

5555.1 China Import.1 China Import.1 China Import.1 China Import

For the last decade, China witnessed a quick growth on furnishing importation.

The total value of furnishing importation got an annual growth of 18.07% in 2008,

up from US$ 1.3 billion in 2007 to US$ 1.53 billion in 2008. However, this

development trend becomes steadily in the first half year of 2009, even with a

trend to fall due to the world financial crisis. The total importation valve from

January to June in 2009 is 0.77 billion, only with a 3.05% increase compared with

the same period in 2008.

Germany, Japan, United States, South Korea, Italy were the top five countries by

importation value in 2008. Germany was always the first, followed by Japan, the

total importation value from these two countries accounted over 1/3 of the total

importation value in 2008, in which 20.17% of Germany with an amount of US$

309.18 million, 15.41% of Japan with an amount of US$ 236.27 million. But things

were changed in the first 6 months of 2009. Korean furnishing products seemed to

be more and more popular among the Chinese, especially the young people. From

January to June in 2009, the importation value from Korea has a 150% increase

compared with the same period in 2008. Korea has replaced Japan and became the

No.2 in the imported furniture market in China, with a marketing share of 16.33%.


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China - Imports - Furniture

Jan - Dec 2008

Italy

6.70%

Others 18.32%

Germany 20.17%

Japan 15.41%

United States 8.80%

Korea, South 7.42%

Italy 6.70%

Taiwan 6.24%

China 5.39%

Poland 4.56%

United Kingdom 4.34%

Vietnam 2.65%

Source of data: China Customs

China - Imports - Furniture

Jan - Jun 2009

Italy

6.22

Others 18.98%

Germany 18.59

Korea, South 16.33

Japan 14.63

Taiwan 7.05

United States 6.46

Italy 6.22

China 3.39

Poland 3.17

Vietnam 2.88

United Kingdom 2.30



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Italy is always the main player in the Chinese imported furniture market. In 2008,

Italy was No.5, with the importation value of US$ 102.73 million. The yearly

importation valve from Italy increased by 8.18% compare to 2007.

Furniture - Imports - Total - from Italy

0.00

20.00

40.00

60.00

80.00

100.00

120.00

2006 2007 2008

Calendar YearMillions of USD

2006

2007

2008


2009 witnessed the big influence that the world financial crisis brought to the

furniture market. Just in the first 6 months of 2009, more than half of the top ten

countries by importation value in the Chinese furniture market have a significant

drop in their importation business. Even through, Italy still gained a stable

importation value accounted by 6.22% of total furniture import value with an

amount of US$ 48.26 million from January to June.

Furniture - Imports - Total - from Italy

0.00

10.00

20.00

30.00

40.00

50.00

60.00

2007 2008 2009

January - JuneMillions of USD

2007

2008

2009



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Regarding the importation value of different categories of furniture in the recent 3

years, the top three categories were always HS 9401 (Seats, other than those of HS

9402), HS 9403 (metal and wooden furniture used in the office, kitchen and

bedroom) and HS 9405 (lamps, lighting and fitting). In the first six months of 2009,

the total importation value of these three categories accounted by 91.65% of total

furniture importation of the country, in which 40.77% by category HS 9401 with an

amount of US$ 316.26 million, 25.72% by category HS 9405 with an amount of US$

199.47 million and 25.16% by category HS 9403 with an amount of US$ 195.17

million respectively.

Top three imported furniture categories total

0.00

100.00

200.00

300.00

400.00

500.00

2007 2008 2009


9401

9405

9403


HS 9401HS 9401HS 9401HS 9401Seats (Other than those of HS 9402), whether or not

convertible into beds, and parts thereof

HSHSHSHS 9402940294029402

Medical, surgical, dental or veterinary furniture; barber's

chairs and similar chairs; parts pf the foregoing articles

HSHSHSHS 9403940394039403Other furniture (metal and wooden furniture used in the

office, kitchen and bedroom) and parts thereof

HSHSHSHS 9404940494049404Mattress supports; articles of bedding and similar

furnishing, whether or not covered

HSHSHSHS 9405940594059405Lamps, lighting and fitting; illuminated signs, name-plates

and the like

HSHSHSHS 9406940694069406 Prefabricated buildings


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As to the imported furniture products from Italy, the top one category by

importation value was always HS 9403, followed byHS 9401 and HS 9405.In thefirst six months of 2009, the importation value of these 3 categories covered

94.91% of total importation value of the country, in which 61.52% by category HS

9403 with an amount of US$ 29.69 million, 22.84% by category HS 9401 with US$

11.02 million and 10.55% by category HS 9405 with US$ 5.09 million respectively.

Top three imported furniture categories from Italy

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

2007 2008 2009


9403

9401

9405




HSHSHSHS 9402940294029402Medical, surgical, dental or veterinary furniture; barber's







and the like


For more detail information, please refer to APPENDIX 1: CHINA IMPORT


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5555.2 Chinese export.2 Chinese export.2 Chinese export.2 Chinese export

The main markets of Chinese furniture export are Asia, North America and Europe.

In 2009, Chinese furniture was exported to over 100 countries (regions). The top 5

exportation countries (areas) for Chinese furniture were: United States, Japan,

United Kingdom, Germany and Russia.

The total value of Chinese furniture export has grown rapidly in the recent years,

increased from US$ 27.96 billion in 2006 to US$ 42.79 billion in 2008. Yet, the

exportation value fell by 11.74% in the first half year of 2009 due to the world

financial crisis compared with the same period in 2008.

Contrary to Italys important position in the imported furniture market, Italy was

only the No.14 among all the countries to which China export its furniture product

in 2008, accounted by US$ 781.36 million. In the first 6 months of 2009, however,

there is significant drop of the furniture exportation value to Italy, accounted by

14.02% compared with the same period in 2008.

- Furniture - Exports - Total - to Italy

0.00

200.00

400.00

600.00

800.00

1000.00

2006 2007 2008

Calendar YearMillions of USD

2006

2007

2008



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- Furniture - Exports - Total - to Italy

0.00

100.00

200.00

300.00

400.00

500.00

2007 2008 2009


2007

2008

2009


Regarding the exportation value of different categories of furniture to Italy in the

recent 3 years, the top three categories were HS 9401, HS 9405 and HS 9403. In the

first six months of 2009, the total importation value of these three categories

accounted by 86.63% of total furniture importation of the country, in which

33.71% by category HS 9401 with an amount of US$ 113.46 million, 27.15% by

category HS 9405 with an amount of US$ 91.37 million and 25.77% by category HS

9403 with an amount of US$ 86.72 million respectively.

Top three exported furniture categories to Italy

0.00

20.00

40.00

60.00

80.00

100.00

120.00

140.00

2007 2008 2009


9401

9405

9403



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HSHSHSHS 9402940294029402Medical, surgical, dental or veterinary furniture; barber's







and the like


For more details, please read APPENDIX 2: CHINA EXPORT


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6666. DISTRIBUTION SYSTEM. DISTRIBUTION SYSTEM. DISTRIBUTION SYSTEM. DISTRIBUTION SYSTEM

On the retail side, chain stores and supermarkets are the most popular sales

channels in China. Imported furniture is mainly sold in specialty stores and

high-class furniture shopping malls. In these matured markets, buyers increasingly

source furniture directly from manufacturers, while some still purchase through

agents and distributors. Specialised furniture districts are popular on the Chinese

mainland for both retail and wholesale business. Shanghai and Beijing have been

the important sales places for all furniture companies.

Many manufacturers produce on an OEM/ODM basis for major foreign brands.

Some establish their own retail outlets particularly on the mainland and hold

subsidiaries, branch offices and showrooms in major Chinese cities to facilitate

domestic sales.

Low to medium-end products are often sold in furniture hypermarkets. For

instance, Xianghe Furniture Market, about 100 km away from central Beijing, is the

third largest furniture market in China and the largest in North China. With a

sales area of nearly 500,000 square meters, it mainly sells low to medium-end

products at 20-30% lower prices than Beijing. For mass production products such as

garden chairs, folding chairs, shoes racks and mattress, Chinese manufacturers of

such products heavily reply on their own sales or marketing departments to sell

directly to the hypermarkets. In order to reduce costs, many factories are built near

the hypermarkets.

Manufacturers specialised in the production of replicas of Chinese antique

furniture rely on their established network with overseas agents, wholesalers and

retailers, such as furniture specialty shops run by overseas Chinese in the US, EU,

Canada and other major markets. In order to meet the taste of the local shoppers,

some overseas retailers design their "modified Chinese furniture" and engage a

Hong Kong agent for production in the mainland.


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7.... GOVERGOVERGOVERGOVERNNNNMENT POLICIES AND REGULATIONSMENT POLICIES AND REGULATIONSMENT POLICIES AND REGULATIONSMENT POLICIES AND REGULATIONS

Foreign merchants must pay attention to the Chinese furniture industry standards

when entering China market. Imported furniture products need to comply with

certain safety and quality requirements. Compulsory standards by national begin

with GB and Compulsory standards by China Light industrial Products and

Art-Crafts Enterprises begin with QB. In addition, government also encourage to

adopt recommendatory standards which start with /T.

Please check the following table for the related stands specify the product

classification, technical requirement, test methods, inspection rules, marking issues

and so on.

The Number ofThe Number ofThe Number ofThe Number of

StandardStandardStandardStandardName of StandardName of StandardName of StandardName of Standard

GB/T 3324-1995 Wooden furniture -- General technical requirements

GB/T 3325-1995 Metal furniture -- General technical requirements

GB/T 3326-1997 Furniture -- Main sizes of tables and seats

GB/T 3327-1997 Furniture -- Main sizes of cabinets

GB/T 3328-1997 Furniture -- Main sizes of beds

QB/T 1951.11994 Wooden furniture -- Quality inspection and certification

QB/T 1951.21994 Metal furniture -- Quality inspection and certification

QB/T 3661.11999 Soft furniture -- Sofa

QB/T 3661.21999 Soft furniture -- Mattress

QB/T 22801996 Swivel chair

QB/T 36441999 Painted furniture

GB/T 4893.1 ~ GB/T 4893.9 Furniture -- Assessment of surface criteria


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8888.... CONSIDERATIONS FOR ITALIAN PLAYERSCONSIDERATIONS FOR ITALIAN PLAYERSCONSIDERATIONS FOR ITALIAN PLAYERSCONSIDERATIONS FOR ITALIAN PLAYERS

For most Chinese, Italian furniture means luxury products with creative design,

good quality and raw materials and perfect hand-made job. On one hand, the

high-class furniture from Italy is easy to find its market in China. These high quality

and design furnishing products are quite popular among the rich people in China.

On the other hand, the mid-low class Italian furnishing products are very hard to

enter China market since they arent not competitive compared with local or Asia

products on price.

Most Italian furniture now is sold in specialty stores through the local distributors

or agents in Shanghai to distinguish with the domestic products. They mainly focus

on high-end customers in China. There are three main problems for these Italian

furniture companies to develop in China market,

- High currency value, which reflects on final cost to consumers;

- High cost of transportation and long time of delivery;

- Long-term investment return.

There also one more potential risk for the Italian companies - copy. Once their

brands are successful in China market, then they would possibly face the problem

that their furniture design could be copied by local small and medium

manufacturers.

Considering the market situation, it is better to find suitable Chinese partners to

enter Chinese market for Italian furniture manufacturers. For those who havealready entered the China furniture market, they should put more effort on the

environment of their local showrooms and try to build an atmosphere of Italian

culture. This will help to give a strong impression to the consumers and make

Italian furniture different.


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9999.... CONCLUSIONS AND RECOMMENDATIONSCONCLUSIONS AND RECOMMENDATIONSCONCLUSIONS AND RECOMMENDATIONSCONCLUSIONS AND RECOMMENDATIONS

In China, the industry is still lagged behind of western country in term of scale of

production and caliber of employee, especially the supplier chain even if through

these years of development and probably the thorough privatization. In addition,

China still lacks for specialized manufacturers and skillful workers for specialized

products.

The worldwide financial give a big influence on the world furniture market, China

is no exception. Yet the marketing share and importation valve of Italian furniture

in China market is still stable in the first half of 2009 and even with a little increase

compared with same period of 2008.

In China market, it would be good advantages for Italian companies on their world

class of design, high level of manufacture technique, and advanced equipments.

But every coin has its two side, high cost per head, high freight fee, high selling

costs and appreciation of currency will still be disadvantage for Italian manufacture

in foreseeing future.

The point is how Italian enterprises fully use their comparative advantage and

minimize their disadvantage. Also they need to balance the market niche

promotion with cost effective strategy.

For the Italian furniture merchant, they still continue focus on high-class furniture

market since these Italian furniture brands always have a good image as high

quality, world-class design and eternity. Their products are welcomed by high-end

customers in China.

For the Italian furniture manufactures, they should start looking for cooperation

with local companies in term of jointly set-up factories, corporation joint venture

or work as component supplies. This would help them to counter the challenge and

risk facing in Chinese market.


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APPENDIXAPPENDIXAPPENDIXAPPENDIX


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Appendix 1:Appendix 1:Appendix 1:Appendix 1: China ImportChina ImportChina ImportChina Import

94949494 FURNITURE AND BEDDINGFURNITURE AND BEDDINGFURNITURE AND BEDDINGFURNITURE AND BEDDING

bbbby Countryy Countryy Countryy Country

Millions of US Dollars

RankRankRankRank CountryCountryCountryCountry 2006200620062006 2007200720072007 2008200820082008 2006200620062006 2007200720072007 2002002002008888 08/0708/0708/0708/07

% Share% Share% Share% Share % Change% Change% Change% Change

--------WorldWorldWorldWorld-------- 944.44944.44944.44944.44 1,298.411,298.411,298.411,298.41 1,533.051,533.051,533.051,533.05 100.00100.00100.00100.00 100.00100.00100.00100.00 100.00100.00100.00100.00 18.0718.0718.0718.07

1 Germany 211.06 292.60 309.18 22.35 22.54 20.17 5.67

2 Japan 205.74 195.11 236.27 21.79 15.03 15.41 21.10

3 United States 81.23 119.71 134.90 8.60 9.22 8.80 12.69

4 Korea, South 98.88 86.19 113.71 10.47 6.64 7.42 31.93

5 ItalyItalyItalyItaly 44.1844.1844.1844.18 94.9694.9694.9694.96 102.73102.73102.73102.73 4.684.684.684.68 7.317.317.317.31 6.706.706.706.70 8.188.188.188.18

6 Taiwan 53.51 70.34 95.67 5.67 5.42 6.24 36.00

7 China 45.88 68.50 82.65 4.86 5.28 5.39 20.65

8 Poland 17.10 33.34 69.87 1.81 2.57 4.56 109.57

9 United Kingdom 19.49 46.15 66.50 2.06 3.56 4.34 44.09

10 Vietnam 10.49 30.27 40.60 1.11 2.33 2.65 34.12

11 France 17.85 50.44 40.15 1.89 3.89 2.62 -20.40

12 Sweden 11.12 26.75 29.24 1.18 2.06 1.91 9.31

13 Denmark 6.89 13.25 17.64 0.73 1.02 1.15 33.13

14 Canada 5.58 11.35 13.48 0.59 0.87 0.88 18.81

15 Slovakia 2.97 10.43 13.09 0.32 0.80 0.85 25.50

16 Austria 7.52 10.51 12.83 0.80 0.81 0.84 22.04

17 Malaysia 14.17 14.76 11.71 1.50 1.14 0.76 -20.68

18 Spain 7.80 8.44 10.22 0.83 0.65 0.67 21.18

19 Hong Kong 6.02 6.41 9.55 0.64 0.49 0.62 48.87

20 Czech Republic 10.43 8.53 9.27 1.11 0.66 0.60 8.63



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(January June)



% Sha% Sha% Sha% Sharererere % Change% Change% Change% Change

0000 --------WorldWorldWorldWorld-------- 553.40553.40553.40553.40 752.71752.71752.71752.71 775.65775.65775.65775.65 100.00100.00100.00100.00 100.00100.00100.00100.00 100.00100.00100.00100.00 3.053.053.053.05

1 Germany 132.11 156.45 144.16 23.87 20.79 18.59 -7.86

2 Korea, South 46.95 49.92 126.63 8.48 6.63 16.33 153.68

3 Japan 89.98 115.65 113.51 16.26 15.37 14.63 -1.85

4 Taiwan 31.00 38.26 54.66 5.60 5.08 7.05 42.85

5 United States 52.98 71.03 50.11 9.57 9.44 6.46 -29.45


7 China 29.47 41.39 26.27 5.33 5.50 3.39 -36.52

8 Poland 9.51 40.18 24.60 1.72 5.34 3.17 -38.77

9 Vietnam 8.60 16.23 22.33 1.56 2.16 2.88 37.61

10 United Kingdom 16.66 32.22 17.86 3.01 4.28 2.30 -44.57

11 Austria 3.15 6.82 15.52 0.57 0.91 2.00 127.74

12 France 16.45 21.75 14.60 2.97 2.89 1.88 -32.90

13 Sweden 8.40 15.99 10.85 1.52 2.12 1.40 -32.15

14 Lithuania 1.29 2.77 10.76 0.23 0.37 1.39 288.62

15 Norway 1.21 3.68 6.77 0.22 0.49 0.87 84.14

16 Czech Republic 2.97 4.34 6.75 0.54 0.58 0.87 55.58

17 Thailand 2.11 4.08 5.74 0.38 0.54 0.74 40.56

18 Malaysia 5.59 6.53 4.95 1.01 0.87 0.64 -24.17

19 Singapore 2.25 3.40 4.74 0.41 0.45 0.61 39.24

20 Indonesia 2.83 4.58 4.73 0.51 0.61 0.61 3.44



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China Import by product in 2006China Import by product in 2006China Import by product in 2006China Import by product in 2006 2008200820082008


HSHSHSHS DescriptionDescriptionDescriptionDescription 2006200620062006 2007200720072007 2008200820082008 2006200620062006 2007200720072007 2008200820082008 08/0708/0708/0708/07


--------WorldWorldWorldWorld-------- 791,793.90791,793.90791,793.90791,793.90 956,261.49956,261.49956,261.49956,261.49 1,131,468.691,131,468.691,131,468.691,131,468.69 100.00100.00100.00100.00 100.00100.00100.00100.00 100.00100.00100.00100.00 18.3218.3218.3218.32

94Furniture And

Bedding944.44 1,298.40 1,533.06 0.12 0.14 0.14 18.07

9401 Seat (Not Dental,Etc) 570.90 712.88 751.66 60.45 54.90 49.03 5.44

9403 Other Furnit,Not Seat 163.65 298.29 365.12 17.33 22.97 23.82 22.41

9405 Lamps,Lightng,Fitting 122.75 161.83 277.25 13.00 12.46 18.09 71.32

9402 Med/Surg/Den/Vet/Etc. 43.65 60.04 65.60 4.62 4.62 4.28 9.27

9404 Articles Of Bedding 27.32 34.04 42.11 2.89 2.62 2.75 23.71

9406 Prefabricated Buildng 16.18 31.32 31.30 1.71 2.41 2.04 -0.06


China Import from Italy in 2006China Import from Italy in 2006China Import from Italy in 2006China Import from Italy in 2006 2008200820082008




ItalyItalyItalyItaly 8,605.628,605.628,605.628,605.62 10,216.5010,216.5010,216.5010,216.50 11,657.4711,657.4711,657.4711,657.47 1.091.091.091.09 1.071.071.071.07 1.031.031.031.03 14.1014.1014.1014.10

94Furniture And

Bedding44.18 94.96 102.73 0.51 0.93 0.88 8.18

9403 Other Furnit,Not Seat 19.43 49.18 45.24 43.98 51.79 44.04 -8.01




9404 Articles Of Bedding 0.65 2.36 2.60 1.48 2.48 2.53 10.36

9406 Prefabricated Buildng 0.22 0.46 0.69 0.51 0.48 0.68 52.29



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China Import by product in 2007China Import by product in 2007China Import by product in 2007China Import by product in 2007 2009200920092009

(January - June)




--------WorldWorldWorldWorld-------- 434,184.52434,184.52434,184.52434,184.52 567,112.40567,112.40567,112.40567,112.40 424,472.17424,472.17424,472.17424,472.17 100.00100.00100.00100.00 100.00100.00100.00100.00 100.00100.00100.00100.00 ----25.1525.1525.1525.15

94Furniture And

Bedding553.40 752.71 775.65 0.13 0.13 0.18 3.05

9401 Seat (Not Dental,Etc) 329.95 395.18 316.26 59.62 52.50 40.77 -19.97



9402 Med/Surg/Den/Vet/Etc. 27.01 31.66 30.21 4.88 4.21 3.90 -4.56

9404 Articles Of Bedding 13.36 20.65 19.76 2.41 2.74 2.55 -4.33



China ImpChina ImpChina ImpChina Import from Italy in 2007ort from Italy in 2007ort from Italy in 2007ort from Italy in 2007 2009200920092009

(January - June)




ItalyItalyItalyItaly 4,845.394,845.394,845.394,845.39 5,827.195,827.195,827.195,827.19 5,255.425,255.425,255.425,255.42 1.121.121.121.12 1.031.031.031.03 1.241.241.241.24 ----9.819.819.819.81

94Furniture And

Bedding31.47 47.78 48.26 0.65 0.82 0.92 1.01


9401 Seat (Not Dental,Etc) 10.39 13.21 11.02 33.00 27.65 22.84 -16.56

9405 Lamps,Lightng,Fitting 5.07 10.05 5.09 16.12 21.04 10.55 -49.36


9402 Med/Surg/Den/Vet/Etc. 0.79 1.73 1.06 2.50 3.62 2.20 -38.64

9406 Prefabricated Buildng 0.38 0.18 0.18 1.22 0.38 0.37 -0.01



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Appendix 2:Appendix 2:Appendix 2:Appendix 2: China ExportChina ExportChina ExportChina Export

94949494 FURNITURE AND BEDDINGFURNITURE AND BEDDINGFURNITURE AND BEDDINGFURNITURE AND BEDDINGbbbby Countryy Countryy Countryy Country




0000 --------WorldWorldWorldWorld-------- 27,956.1627,956.1627,956.1627,956.16 35,956.9335,956.9335,956.9335,956.93 42,785.7342,785.7342,785.7342,785.73 100.100.100.100.00000000 100.00100.00100.00100.00 100.00100.00100.00100.00 18.9918.9918.9918.99

1 United States 11,557.83 13,701.37 14,412.06 41.34 38.11 33.68 5.19

2 Japan 2,061.11 2,338.34 2,887.34 7.37 6.50 6.75 23.48

3 United Kingdom 1,472.38 2,173.23 2,316.49 5.27 6.04 5.41 6.59

4 Germany 1,043.64 1,528.37 1,890.30 3.73 4.25 4.42 23.68

5 Russia 313.32 487.60 1,600.08 1.12 1.36 3.74 228.15

6 Canada 913.92 1,240.89 1,594.11 3.27 3.45 3.73 28.47

7 Australia 724.28 994.53 1,358.24 2.59 2.77 3.18 36.57

8 Netherlands 539.41 806.08 1,074.49 1.93 2.24 2.51 33.30

9 Hong Kong 1,693.96 1,642.18 1,056.53 6.06 4.57 2.47 -35.66

10 France 498.02 778.12 995.36 1.78 2.16 2.33 27.92

11United Arab

Emirates373.65 554.45 899.14 1.34 1.54 2.10 62.17

12 Korea, South 605.64 792.20 874.66 2.17 2.20 2.04 10.41

13 Spain 542.18 739.95 856.30 1.94 2.06 2.00 15.72


15 Belgium 338.21 502.08 648.75 1.21 1.40 1.52 29.21

16 Saudi Arabia 279.09 344.60 508.52 1.00 0.96 1.19 47.57

17 Sweden 275.05 401.70 447.02 0.98 1.12 1.05 11.28

18 Malaysia 143.69 215.36 433.81 0.51 0.60 1.01 101.43

19 Singapore 110.17 214.21 383.67 0.39 0.60 0.90 79.11

20 Poland 154.17 269.00 378.83 0.55 0.75 0.89 40.83



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(January June)




0000 --------WorldWorldWorldWorld-------- 16,059.6016,059.6016,059.6016,059.60 19,903.1619,903.1619,903.1619,903.16 17,567.2717,567.2717,567.2717,567.27 100.00100.00100.00100.00 100.00100.00100.00100.00 100.00100.00100.00100.00 ----11.7411.7411.7411.74

1 United States 6,383.85 7,214.22 5,819.81 39.75 36.25 33.13 -19.33

2 Japan 1,042.38 1,360.09 1,251.19 6.49 6.83 7.12 -8.01

3 United Kingdom 981.44 1,173.71 961.21 6.11 5.90 5.47 -18.11

4 Germany 668.52 871.69 873.10 4.16 4.38 4.97 0.16

5 Canada 585.28 775.24 647.00 3.64 3.90 3.68 -16.54

6 Australia 361.72 576.60 558.59 2.25 2.90 3.18 -3.12

7 Netherlands 361.51 535.41 532.59 2.25 2.69 3.03 -0.53

8 France 338.69 481.95 503.23 2.11 2.42 2.87 4.42

9 Malaysia 75.76 150.03 422.82 0.47 0.75 2.41 181.82

10 Hong Kong 885.36 547.90 410.07 5.51 2.75 2.33 -25.16

11 Spain 340.68 432.14 341.35 2.12 2.17 1.94 -21.01

12 ItalyItalyItalyItaly 289.20289.20289.20289.20 391.43391.43391.43391.43 336.54336.54336.54336.54 1.801.801.801.80 1.971.971.971.97 1.921.921.921.92 ----14.0214.0214.0214.02

13United Arab

Emirates220.01 348.20 332.94 1.37 1.75 1.90 -4.38

14 Singapore 73.24 118.60 312.68 0.46 0.60 1.78 163.63

15 Belgium 220.18 296.65 279.47 1.37 1.49 1.59 -5.79

16 Saudi Arabia 121.79 197.08 267.74 0.76 0.99 1.52 35.86

17 Korea, South 360.64 428.80 263.51 2.25 2.15 1.50 -38.55

18 Russia 203.07 324.24 247.49 1.26 1.63 1.41 -23.67

19 Sweden 173.25 218.11 169.65 1.08 1.10 0.97 -22.22

20 Poland 116.06 167.54 142.55 0.72 0.84 0.81 -14.92



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China Export by product in 2006China Export by product in 2006China Export by product in 2006China Export by product in 2006 2008200820082008




--------WorldWorldWorldWorld-------- 969,323.62969,323.62969,323.62969,323.62 1,218,155.481,218,155.481,218,155.481,218,155.48 1,428,869.191,428,869.191,428,869.191,428,869.19 100.00100.00100.00100.00 100.00100.00100.00100.00 100.00100.00100.00100.00 17.3017.3017.3017.30

94Furniture And

Bedding27,956.16 35,956.93 42,785.73 2.88 2.95 2.99 18.99

9403 Other Furnit,Not Seat 9,722.57 11,810.46 13,728.28 34.78 32.85 32.09 16.24

9401 Seat (Not Dental,Etc) 7,409.58 10,348.37 13,195.73 26.50 28.78 30.84 27.52

9405 Lamps,Lightng,Fitting 6,314.57 7,720.27 9,241.91 22.59 21.47 21.60 19.71

9404 Articles Of Bedding 3,760.71 4,790.08 4,881.55 13.45 13.32 11.41 1.91

9406 Prefabricated Buildng 636.67 1,095.84 1,442.71 2.28 3.05 3.37 31.65



China Export to Italy in 2006China Export to Italy in 2006China Export to Italy in 2006China Export to Italy in 2006 2008200820082008




ItalyItalyItalyItaly 15,975.4315,975.4315,975.4315,975.43 21,17721,17721,17721,177.41.41.41.41 26,608.3126,608.3126,608.3126,608.31 1.651.651.651.65 1.741.741.741.74 1.861.861.861.86 25.6425.6425.6425.64

94

Furniture And

Bedding 434.45 630.27 781.36 2.72 2.98 2.94 23.97









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Appendix 3:Appendix 3:Appendix 3:Appendix 3: FurnitureFurnitureFurnitureFurniture Custom DutiesCustom DutiesCustom DutiesCustom Duties

CodeCodeCodeCode DescriptionDescriptionDescriptionDescription MFN%MFN%MFN%MFN% GEN%GEN%GEN%GEN% VAT%VAT%VAT%VAT% EDEDEDED

9401940194019401 Mobili per sedersi (esclusi quelli della voce 9402), anche

trasformabili in letti, e loro parti0 100 17 13

9401 20 009401 20 009401 20 009401 20 00 Mobili per sedersi dei tipi utilizzati per autoveicoli 10 100 17 13

9401 90 119401 90 119401 90 119401 90 11 Parti di mobili per sedersi, dei tipi utilizzati per veicoli aerei 10 100 17 13

9402940294029402 Mobili per la medicina, la chirurgia, lodontoiatria o la

veterinaria (per esempio:tavoli operatori, tavoli per esami,

letti con meccanismo per usi clinici, poltrone

0 100 17 13

9402 10 909402 10 909402 10 909402 10 90 Poltrone per dentisti, poltrone da parrucchiere e poltronesimili, e loro parti

0 30 17 13

9402 90 009402 90 009402 90 009402 90 00 altri 0 30 17 13

9403940394039403 Altri mobili e loro parti 0 100 17 13

9403 3009403 3009403 3009403 3000000 Mobili di metallo dei tipi utilizzati negli uffici 0 100 17 13

9404940494049404 Sommier; oggetti letterecci ed oggetti simili (per esempio:

materassi, copripiedi,

piumini, cuscini, cuscini-poufs, guanciali), con molle oppure

imbottiti o guarniti

internamente di qualsiasi materia, compresi quelli di

gomma alveolare o di materie

plastiche alveolari, anche ricoperti

10 100 17 13

9405 10009405 10009405 10009405 1000 Lampadari ed altri apparecchi per lilluminazione, elettrici,

da appendere o da fissare

al soffitto o al muro, esclusi quelli dei tipi utilizzati per

lilluminazione delle aree

o vie pubbliche

10 80 17 13

9405 2000Lampade da comodino, da scrittoio e lampadari per interni,

elettrici20 80 17 13

9405 3000 Ghirlande elettriche dei tipi utilizzati per gli alberi di Natale 16 100 17 13

9405 4010 Proiettori 17,5 70 17 13

9405 5000 Apparecchi per lilluminazione non elettrici 20 80 17 13

9405 6000 Insegne pubblicitarie, insegne luminose, targhette

indicatrici luminose ed oggetti

simili

20 80 17 13

9406 0000 Costruzioni prefabbricate 10 70 17 13

Source from China Customs

MFN: Duty rate for Most Favored Nations GEN: GeneralVAT: Value Added Tax ED: Export Duty

Furniture Market Report 2009.9

Documents

Transcript of Furniture Market Report 2009.9