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Furniture Export Meets Bottleneck To Do OEM Without Profit And No Orders.

Since 2016 China furniture exports in negative growth for the first time in seven years later, on January 24th, the daily economic news "reporter learned from bing-bing zhang, deputy secretary-general of China furniture association, 2017 1 ~ 11 months, China's furniture industry above designated size enterprises to complete the main business income is 82.8106 million yuan, total year-on-year growth of 10.24%; The total number of enterprises above the scale was $46.393 billion, up 5.29% from the same period last year.

However, the daily business news reporter learned that China's furniture exports have suffered a bottleneck and have not been able to break through for a long time. To furniture export situation, January 25, China liansu's collar (02128, HK) the relevant person in charge of the global family of Qin Xu said when accepting a reporter to interview, most of the domestic furniture export in OEM (OEM OEM) way, profit space is very limited. "OEM without profit, no OEM orders."

Industry: furniture export gross profit rate is low.


On January 24, the current situation and future development trend of Chinese furniture industry was released. According to the report, from January to November, 2017, the enterprises in the furniture industry have accumulated a total revenue of 828.106 billion yuan, an increase of 10.24% compared with the previous year. Total profit was 49.586 billion yuan, up 9.42% year on year. The cumulative output was 73,520.59 million, up by 3.47% year on year. In terms of import and export, the total value of enterprises in the furniture industry was $46.393 billion in january-november 2017, up 5.29% from the same period last year. The total value of imports was $2.758 billion, up 15.72% year on year.



Guangdong province is our country furniture production and sales big province. On January 24, wang ke, President of the guangdong furniture association, told the daily economic news that the total value of furniture sales in the province was estimated at about 420 billion yuan in 2017, up 5.5% from a year earlier. Among them, the export of furniture was about 137 billion yuan, up 4.1% year on year. Domestic sales grew by 6.2%.


In 2016, China's furniture export volume was negative, and from the data of 2017, the national furniture export situation seems to be improving. However, qin xu told reporters that the Chinese furniture export is "do OEM without profit, do not do OEM orders."

This sentence points out the long-standing predicament of Chinese furniture industry. According to qin xu, in the domestic furniture export, nearly 9 chengdu is OEM products. In recent years, with the increase of labor costs in China, and import countries have become stricter on the quality evaluation of furniture products, the gross profit rate of furniture exports is very low.

The reporter understands, our country furniture export traditional market mainly concentrates in the European Union, the United States, Japan and so on the country and the region. In recent years, southeast Asian countries, such as Vietnam, which have a strong cost advantage, are also squeezing out the share of China's export market.


Overseas sales are difficult to solve.


In early 2018, the furniture industry came up with a bombshell. Dongguan taisheng furniture co., LTD. (hereinafter referred to as dongguan taisheng), a well-known furniture OEM in dongguan, has announced that it will stop production on February 1, 2018 due to the decline in business. Then the dongguan station subordinate units litres international group chairman Samuel kuo, at a news conference in this special response, dongguan factories because to make intelligent manufacturing, transformation and upgrading, is expected to begin in dongguan factory will be back soon, dongguan factory will from overseas to domestic.

In qin xu's view, since 2017, the price of furniture raw materials has been rising, further squeezing the gross margin of furniture enterprises. He also said that Chinese furniture makers' lack of understanding of overseas markets is an important reason for the difficulties in expanding overseas markets.

He said the reasons for the low gross profit margin of Chinese furniture exports include the high level of transparency in China's furniture market. "They [foreign purchasers] know very well what he needs. They all know how much your template has and how much it imports. Chinese furniture first contact the international market, basically start from the exhibition, so there is no profit space, the competition is big, everybody grabs each other."


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