Wood processing enterprises strive to increase the proportion of individually designed goods

International visitors highly appreciate Vietnamese interior designs. Photo: N.H

Moving forward to ODM method

Converting from manufacturing (OEM) to developing custom-designed products (ODM) to enhance the value of wooden products and "made in Vietnam" furniture is one of the goals set at the Association. Ho Chi Minh City Furniture and Wooden Furniture Export Market - Hawa Expo 2024 is taking place at the Saigon Exhibition and Convention Center (SECC). Mr. Nguyen Quoc Khanh, Chairman of Ho Chi Minh City Handicraft and Wood Processing Association, Head of the Organizing Committee of Hawa Expo 2024, said, taking advantage of the time when Vietnam is attracting global attention with a series of new factories being started. This year, Hawa Expo 2024 will showcase the industry's current capabilities.

“The fair introduces groundbreaking designs from furniture - accessories - material brands, building a community of talented designers. Besides hundreds of trade connection sessions, the fair also "shows off" many new strengths of the industry, so that customers can properly understand the national capacity and expand the list of cooperation" - Mr. Nguyen Quoc Khanh added.

Mr. Nguyen Chanh Phuong, Vice Chairman of Ho Chi Minh City Handicraft and Wood Processing Association, said that the growth of wood and furniture export turnover in January 2024 showed a positive signal about the market resilience. However, although orders have begun to return, many businesses are operating below capacity. Seizing the opportunity from the return of orders, Mr. Phuong recommends that businesses need to quickly stabilize the workforce, prepare finances, raw material sources... In particular, the issue of price is always a concern. A headache for businesses in the battle to compete with competitors from other countries as well as FDI enterprises. Accordingly, Mr. Phuong believes that businesses need to develop their own, unique designs to create added value for themselves.

Mr. Tran Quoc Manh, Chairman of the Board of Directors of Sadaco Company also said that in the trend of shifting supply chains in the wood and furniture industry, many international buyers are looking for new suppliers in Vietnam and some Asian region countries. Accordingly, recently there have been many orders for sample products from new customers. If you can create a difference, excel in design as well as have competitive prices, businesses can sign larger orders from these customers. According to Mr. Manh, at Sadaco, there was a time when sample goods accounted for 40-50% of the total export volume. This requires great effort and perseverance from businesses because making samples requires a lot of effort and meticulousness, while profit margins are lower than other large orders.

Investing heavily in design

Talking about the current trend of investing in design in the wood and furniture industry, Mr. Nguyen Chanh Phuong revealed that in 2023, a number of businesses will emerge that have achieved success thanks to investing in fairs, design, and retail. There are especially businesses that achieved growth rates of over 300%. “Investing in design has helped many businesses achieve outstanding sales. This is also a lesson for many other businesses to learn" - Mr. Phuong emphasized.

In fact, many Vietnamese wood processing enterprises have methodically invested in design activities and are gradually moving from OEM to ODM methods. As one of more than 500 exhibitors at Hawa Expo 2024, Mr. Dang Rang, Sales Director of ASAHI Furniture Company, said that participating in Hawa Expo 2023, when introducing products designed by Vietnamese people, The company has received very positive feedback from customers. Thanks to that, the company has signed an order with a very large customer in Japan and many other customers. From this positive result, at Hawa Expo 2024, ASAHI continues to bring a new product line with its own design to introduce to American and European customers.

Through observing the booths at Hawa Expo 2024, Mr. Nguyen Liem, Chairman of Binh Duong Wood Processing Association, assessed that this year's fair has an outstanding level of investment in booths with many new designs, the quality is significantly improved.

Typically, the booth of Lam Viet Joint Stock Company has all new models. Mr. Nguyen Thanh Lam, General Director of Lam Viet Joint Stock Company, said that currently the proportion of ODM goods in Lam Viet's total exports accounts for 50%. In particular, Lam Viet's designs are always highly appreciated by international customers with about 70-80% of designs accepted by customers.

Mr. Nguyen Ngoc Tinh, Director of Tan Hoa Co., Ltd. also said that the company has proactively designed about 80% of exported goods. This gives the company a huge advantage against customer changes in shortening delivery times. “Previously, delivery time could be from 3-6 months, but now there are orders that require delivery within just one month. By being proactive in design, the company will prepare some stages for best-selling models. When the customer buys, the company only needs to complete and deliver the goods" - Mr. Tinh said.

At the perspective of an expert in the furniture field, Mr. Zilahi Imre, Chairman of the alliance of publications writing about the wood furniture industry, sees interior design as always a double-edged sword, because beautiful designs can easily copied. Therefore, businesses need to create designs with their own identities. "Businesses need to create products that customers are willing to spend money to buy instead of making products that customers just want to buy at cheaper prices" - Mr. Zilahi Imre emphasized.