Overview of Vietnam's Wood Products and Furniture Market

Vietnam, a country blessed with rich natural resources, has gained significant attention over the past few years, particularly in the realm of  wood products and furniture manufacturing. This Southeast Asian nation is emerging as a robust hub for sourcing furniture, with a broad array of wood types and an array of styles to choose from. This comprehensive guide aims to provide insights into sourcing furniture from Vietnam, with a focus on the types of wood, import duties, and potential challenges. 

Vietnam’s furniture industry has been active for decades but has gained increasingly more attention in recent years. Everything from multinationals like IKEA and Scancom to small-to-medium-sized furniture manufacturers like Wendelbo from Denmark is based here.

Vietnam has recently surpassed countries like Poland and Germany and become the second-biggest furniture exporter, only behind China. There are a handful of reasons for this.

First, the country has a long history of exporting both wood and furniture, allowing it to build up a robust supply chain with a broad and versatile sourcing market. It’s a forested country with no shortage of wood and many suppliers harvest wood sustainably.

You have no issues in finding Vietnamese suppliers that are FSC-certified and meet legal requirements.

Looking at furniture manufacturers, there are around 1,500 exporters available, and where 30% are foreign invested. Half a million Vietnamese are employed in the industry and 5,600 companies produce furniture, for either domestic use or exports, or both.

Vietnam-produced furniture is now exported to more than 120 countries and where the main markets are the US, the UK, Canada, Australia, and Japan.

The industry has seen double-digit growth in recent years and is expected to grow significantly more with new lucrative trade agreements in place. Despite the impact of the epidemic outbreak, Vietnam’s wood and furniture exports increased by up to 20% in 2021 compared to 2020.

Major competitors to wood and furniture sourcing are Indonesia, Thailand, and Malaysia. Yet, Thailand and Malaysia have higher costs for wood while it’s harder to find suppliers with timber legality in Indonesia.

What wood types are used in furniture from Vietnam?

The wood types used in Southeast Asia are different from the ones found in Russia, Europe, and the US. Due to the hot and humid climate, tropical hardwoods are the most common wood types found. The wood should therefore have a dense core to handle the heat and high moisture levels, for robustness.

Many of the wood types grow significantly faster compared to wood in Europe, Russia, and the US, like beech. This is beneficial for companies that need high volumes of wood and that can also enjoy Vietnam’s low labor costs.

Let’s review the most common wood types used among Vietnamese suppliers for exports.

Among these, rubberwood and acacia are the most popular ones for both domestic and export markets. Padouk, ebony, mahogany, and cherry wood are also favored by the Vietnamese for their beautiful grains and durability, but they gradually become less common due to the threat of deforestation.

Acacia

Acacia is the most used wood and suppliers will often recommend it to potential customers. The wood is known for its durability, light modern color, and solid look. The climate is suitable for the wood, which makes it grow fast, resulting in a large and low-cost supply.

As Acacia has evolved to tolerate heat and moisture, it’s suitable for furniture that must sustain tough weather conditions. It doesn’t warp as easily and has anti-mold and anti-bacterial properties. Acacia can therefore be used for kitchen sinks and outdoor furniture.

Due to its density, solid Acacia products are heavy and harder to handle and transport.

Rubberwood

In addition to Acacia, Rubberwood is also widely used in Vietnam. If more than 50% of suppliers have Acacia, then 20% to 30% have Rubberwood. Therefore, there’s a large supply available and it’s also environmentally friendly.

It’s also easy to engrave, paint, and nail well. The wood doesn’t tend to shrink after drying and you’ll have fewer issues with warping.

A disadvantage of rubberwood is the resistance to mold and termites. It can also be easily mixed up with heartwood and sapwood that have a yellow-white color. Worth mentioning is also the smaller diameter of the trees that must be cut into pieces and then reassembled into larger planks.

Even if this won’t affect the quality of the products, you will lose some homogeneity in the appearance.

Plywood

In addition to natural wood, furniture makers in Vietnam have expertise in the production of plywood, Medium Density Fiberboard (MDF), High-Density Fiberboard (HDF) veneers, and particle boards.

More customers now request products made of these materials for a modern look and to be more lightweight. Suppliers know the requirements of foreign companies and the trend well. As long as you have an idea or a concept you like, they can develop the designs and suggest suitable materials for you.

Bamboo

Bamboo is not a wood type but a grass. Due to being increasingly used for furniture production, we can’t skip bamboo in this article.

After being harvested, bamboo grows back significantly faster than the above-mentioned wood types. This makes it a sustainable replacement for wood. Bamboo has also become increasingly popular for furniture production, thanks to its low water absorption properties, high stability, and is less prone to scratches.

Due to its distinct look, foreign as well as local consumers find bamboo furniture modern and unique. Bamboo chairs, tables, cabinets, boards, and flooring are examples of products that can be produced.

Even if bamboo grows naturally and in abundance in Vietnam, you need to find a factory that specializes in bamboo. It needs different processing methods than most other woods.

What wood types are hard to source in Vietnam?

Although Vietnam has strong production capabilities in the furniture industry, many companies must import raw materials. Foreign companies are either new to Vietnamese wood types or prefer Western wood. Examples of wood types that are hard to source in Vietnam are:

Oak

Beechwood

Pine

Teak

Eucalyptus

Walnut

Ash

Ironwood

Neither oak nor beech is available in Vietnam for sourcing purposes. In most cases, manufacturers have to import these woods from the US and European countries.

Regarding pine and teak, these woods are now grown in some areas in Vietnam, but the quantity is not sufficient to serve overseas demand. Pine is still the wood type that Vietnam imports the most. The reason for the scarcity of these woods is the climate in Vietnam, which is hot and humid.

The main types of wood products and furniture produced by Vietnamese furniture manufacturers

The furniture industry is vast, encompassing diverse product categories across various sectors. It’s a rarity to find companies of colossal scale that produce the entire spectrum of furniture products. Enterprises tend to specialize in specific domains, capitalizing on their strengths to thrive in the competitive market. In Vietnam, furniture manufacturers frequently concentrate on the following prominent segments:

• Natural and engineered wood furniture

• Living room furniture

• Outdoor wooden furniture

• Garden furniture

• Bedroom furniture

• Bathroom furniture

• Restaurant and hospitality furniture

• Metal furniture

• Handcrafted furniture items

• Luxury furniture

• Sofas

• Children’s furniture

• Plastic furniture

• Chairs

• Kitchen cabinets and bathroom vanities

Import Duties for Furniture from Vietnam

If you are considering importing furniture from Vietnam, the first step is to know the HS Code of the furniture type that you want to source. You should also check whether your country and Vietnam have signed a free trade agreement (FTAs).

Vietnam now has FTAs with the EU, ASEAN, South Korea, Japan, New Zealand, Australia, the UK, Canada, Mexico, Chile, and Peru. Besides, you also need to verify if your suppliers can provide all the documents required for the tax exemption, especially the country of origin, which is Vietnam.

Import duties to the US

While Vietnam and the US don’t have a free trade agreement, they do have a bilateral trade agreement. As a result, importers can enjoy lower tariffs compared to China.

US business owners can check the Harmonized Tariff Schedule to see the HS codes and related duties. In general, furniture products from Vietnam are not charged high duties, or not charged at all.

For example, the HS code for wooden dining tables is 9403.40.90. The general tax is noted as “Free” in the Harmonized Tariff Schedule, which means that wooden dining tables from Vietnam to the US are exempted from import tariffs.

Import duties to the EU

The free trade agreement between the EU and Vietnam – EVFTA has come into effect and helped to reduce the tariffs for furniture imports.

However, depending on the products, the rates vary. It is estimated that 99% of wooden products from Vietnam to the EU now have a preferential tax rate of 0%. The remaining 1% products are fiberboard, chipboard, and plywood, which will also have a tax reduction down to 0% in the coming 4 to 6 years.

For example, ‘wooden furniture of a kind’ used in dining rooms and living rooms has the HS-code 9403.60.10. Wooden furniture used in bedrooms has HS 9403.50.00. Both these HS codes are now exempted from taxes when imported from Vietnam to the EU and within EVFTA.

Summary

Vietnam is the second-biggest exporter of furniture globally and the industry has been active for decades. With that said, it has taken off in recent years and since Vietnam joined WTO in 2007. Many of its free trade agreements have been signed since 2007, including the EVFTA with the EU.

The wood types grown and harvested in Vietnam are different from those used for furniture manufacturing in Western countries. Acacia and Rubberwood are most commonly found, even if bamboo gains more attention. With that said, furniture made of beech, oak, and pine is harder to find, unless the wood was imported.

Looking at product types, 70% of suppliers produce indoor furniture, primarily for living rooms. Furniture for kitchens, offices, and other purposes is also widely produced. Examples include kitchen sinks, kitchen tables, sofas, armchairs, and TV tables.

Yet, the outdoor furniture supply market is also highly active where we see much production of rattan chairs and table sets, bamboo products, sunbeds, and hammocks, for example.

If you intend to source furniture and wooden products from Asia, then Vietnam will most likely be at the top of your list.