The attention of furniture going overseas is increasing.

According to Statista, the global furniture market is expected to reach $770 billion by 2023, with a compound annual growth rate of 5.31% between 2023 and 2027. This gives furniture enterprises going overseas a broad space for development. A few days ago, cross-border e-commerce furniture enterprises to European technology, Lege shares have disclosed the 2023 annual report to the online brand to go to sea, are to achieve double growth in revenue, net profit, better than the performance of the same period of cross-border e-commerce enterprises;

Known as the "South China City four young" Aoji Technology has just submitted a listing application to the main board of the Hong Kong Stock Exchange, is recovering from the impact of Amazon's blocking wave, revenue and profitability has also improved. However, despite the bright performance, the impact of Chinese furniture brands overseas is still limited, and this is especially true for companies that only sell through online channels.Wayfair Greater China Commercial General Manager Stephen Lee told the 21st Century Business Herald that China has always been the main exporter of furniture to the overseas market, but the core is the price, not the brand.

Maintain the price advantage, enterprises are faced with tighter cost control, and logistics is one of the difficult problems that can not be bypassed - the ups and downs of shipping prices, the cost of soaring overseas warehouse leasing, do large cross-border e-commerce enterprises to bear a greater risk of the outside world.

For them, it is still a good business?

Brand start, online acceleration

In fact, furniture overseas is not a new topic. Benefiting from the export policy dividend, perfect supply chain, low labor costs and mature production processes, the furniture export industry has grown rapidly since the reform and opening up. According to CSIL (Center for Industrial Studies in Milan), the global furniture production will be about $500 billion in 2022, of which China is the major furniture producer, accounting for about 37% of the global furniture production. "The entire Chinese furniture export has been benefiting from a relatively low cost advantage as well as better quality." Li told reporters, "In fact, most of the current European and American countries produce their own furniture has become less and less, basically to Southeast Asia and China's exports of furniture."

However, as with the early manufacturing industry to go overseas, domestic home furnishing enterprises were initially mainly through OEM (independent production) and ODM (independent design) and other modes of OEM, which can be traced back as far as the last century. Under this model, Chinese companies mainly take on the role of manufacturing, while branding and design are the responsibility of overseas customers or companies. With the improvement of technological capabilities and changes in the market, Chinese enterprises gradually accumulated the ability of independent design and production, and began the exploration of OBM (own brand), which can be regarded as the prototype of branding overseas.

In the past two years, domestic head furniture enterprises overseas layout is more frequent, for example, gold kitchen cabinet and Gujia Home Furnishing and other companies have increased their overseas operations, through the establishment of production bases in Thailand and Mexico to enhance the competitiveness of the overseas market and the ability to provide services, ZhiBang Home Furnishing, Sophia and other enterprises to actively open stores overseas, to further enhance the impact of the brand. And in the cross-border e-commerce new industry, there are also enterprises through Amazon, independent station and other platforms directly for the overseas market, for independent brand sales, such as to Europe and the United States consumers gradually formed the home furnishing and service capabilities of the European and American consumers.

In Europe and the United States consumers gradually formed home, telecommuting habits of the background, coupled with inflationary pressures, "affordable consumption" wave, more and more consumers turned to the price transparency, product variety, cost-effective online home consumption, for the company's market space to further expand the opportunity to create.

From these enterprises can also be seen in the tide of Chinese furniture brands to go overseas. 2023 results have been released, the above three companies have achieved double growth in revenue and profit, performance is bright. Zhi Ou Technology's annual report shows that in 2023, the company realized total revenue of 6.074 billion yuan, up 11.34% year-on-year; net profit of 413 million yuan, up 65.08% year-on-year. Zhi Ou Technology said, its SONGMICS, VASAGLE, Feandrea three major private product brands deep plowing Europe and the United States online market, 2024 will be clear group main brand SONGMICS HOME as the direction of brand normalization. In 2023, the company realized operating income of RMB 3.902 billion, up 21.61% year-on-year, and net profit of RMB 634 million, a year-on-year surge of 189.72%.

The company has launched a variety of ergonomic products under the brand "Loctek" at home and "FlexiSpot" abroad. During the reporting period, the company's own brand product sales revenue accounted for more than 70% of the proportion of the main business income (excluding overseas warehouse business income).

Aoji Technology, which is still in the process of impacting the IPO of Hong Kong stocks, realized operating revenue of 8.683 billion yuan in 2023, up 22.30% year-on-year; net profit was 520 million yuan, up 133.18% year-on-year. The company has a number of furniture and home furnishing brands such as ALLEWIE, IRONCK, LIKIMIO, etc. In 2023, the company has 11 brands with GMV of more than 100 million yuan.

And the online market penetration will continue to expand. According to Frost & Sullivan, the GMV of the U.S. furniture and home furnishing B2C e-commerce market is expected to increase from $74.8 billion in 2023 to $132.3 billion in 2028, with a CAGR of 12.1%, while the GMV of the European furniture and home furnishing B2C e-commerce market will increase from $85.9 billion in 2023 to $144.4 billion in 2028, with a CAGR of 10.9%.

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Source: Furniture Industry

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