Furniture Market Report 2009.9

FURNITURE
FURNITURE MARKET IN CHINA
MARKET RE
REPORT 2009
2009
TABLE OF CONTENT
1. INTRODUCTION …………………………………………………………….... 3
2. MARKET OVERVIEW ………………………………………………………… 4
3. INDUSTRY LANDSCAPE …………………………………………………...… 6
4. PRODUCTION OVERVIEW ………………………………………………….. 8

4.1 Product Quality and Production Technology ………………………… 8
4.2 Production cost ……………………………………………………………. 9
4.3 Product Trend ……………………………………………………………... 10
5. IMPORT-
IMPORT-EXPORT ANALYSIS …………………………………...…………... 12
5.1 China Import ….…………………………………………………………... 12
5.2 China Export ….………………………………………………………….... 17
6. DISTRIBUTION SYSTEM ……………………………………………………... 20
7. GOVERN
GOVERNMENT POLICIES AND REGULATIONS ………………………..... 21
8. CONSIDERATIONS FOR ITALIAN PLAYERS …………………………….... 22
9. CONCLUSIONS AND RECOMMENDATIONS …………………………...... 23
APPENDIX ………………………………………………………………………... 25
2
1. INTRODUCTION
I NTRODUCTION
Objectives
The objective of this market briefing is to provide a general overview of Chinese

furniture industry.
Doing market research in 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 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.).
3
2. MARKET OVERVIEW
China’s 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

US$ billion
45.00
40.00
35.00 Production
30.00 Value
25.00 Sales Revenue
20.00
15.00 Export Value
10.00
5.00
0.00
2006 2007 2008
Source of data: China National Furniture Association
4
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.
5
INDUSTRY 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
6
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”.
7
4 . PRODUCT OVERVIEW
4.1 Product Quality 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 design
capability, 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.
8
4.2 Production 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.
9
4.3 Product 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: 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 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
10
"green furniture" in the western market. In the meantime, metal, which was rarely
used in residential furniture, has increased its presence in the sector.
Multi-
Multi-functionality: 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 colours: Simple lines and clarity in design will be the main
trend 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 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) furniture have gained
popularity 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.
11
5 . IMPORT-
IMPORT -EXPORT 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.
5.1 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%.
12
China - Imports - Furniture Others 18.32%
Jan - Dec 2008 Germany 20.17%
Japan 15.41%
United States 8.80%
Korea, South 7.42%
Italy 6.70%
Italy Taiwan 6.24%
6.70%
China 5.39%
Poland 4.56%
United Kingdom 4.34%
Vietnam 2.65%
Source of data: China Customs
China - Imports - Furniture Others 18.98%

Jan - Jun 2009 Germany 18.59
Korea, South 16.33

Italy
6.22 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
13
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

Millions of USD
Calendar Year
120.00
100.00
80.00 2006
60.00 2007
40.00
2008
20.00
0.00
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

Millions of USD
January - June
60.00
50.00
40.00
2007
30.00 2008
20.00
2009
10.00
0.00
2007 2008 2009
14
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

Millions of USD
January - June
500.00
9401
400.00
300.00 9405
200.00
9403
100.00
0.00
2007 2008 2009
Seats (Other than those of HS 9402), whether or not

HS 9401
convertible into beds, and parts thereof
Medical, surgical, dental or veterinary furniture; barber's
HS 9402
chairs and similar chairs; parts pf the foregoing articles
Other furniture (metal and wooden furniture used in the
HS 9403
office, kitchen and bedroom) and parts thereof
Mattress supports; articles of bedding and similar
HS 9404
furnishing, whether or not covered
Lamps, lighting and fitting; illuminated signs, name-plates
HS 9405
and the like
HS 9406 Prefabricated buildings
15
As to the imported furniture products from Italy, the top one category by
importation value was always HS 9403, followed by HS 9401 and HS 9405. In the
first 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

Millions of USD
January - June
35.00
9403
30.00
25.00
20.00 9401
15.00
10.00 9405
5.00
0.00
2007 2008 2009

HS 9401
HS 9402
HS 9403
HS 9404
HS 9405
and the like
For more detail information, please refer to APPENDIX 1: CHINA IMPORT
16
5.2 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 Italy’s 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

Millions of USD Calendar Year
1000.00
800.00 2006
600.00
2007
400.00
2008
200.00
0.00
2006 2007 2008
17
- Furniture - Exports - Total - to Italy
Millions of USD January - June
500.00
400.00 2007
300.00
2008
200.00
2009
100.00
0.00
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

Millions of USD
January - June
140.00
9401
120.00
100.00
80.00 9405
60.00
40.00 9403
20.00
0.00
2007 2008 2009
18
HS 9401
HS 9402
HS 9403
HS 9404
HS 9405
and the like
For more details, please read APPENDIX 2: CHINA EXPORT
19
6 . 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.
20
7.. GOVERN
GOVERN MENT 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 of
Name of Standard
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 1951.1—1994 Wooden furniture -- Quality inspection and certification
QB/T 1951.2—1994 Metal furniture -- Quality inspection and certification
QB/T 3661.1—1999 Soft furniture -- Sofa
QB/T 3661.2—1999 Soft furniture -- Mattress
QB/T 2280—1996 Swivel chair
QB/T 3644—1999 Painted furniture
GB/T 4893.1 ~ GB/T 4893.9 Furniture -- Assessment of surface criteria
21
22
8 . CONSIDERATIONS 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 aren’t 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 have
already 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.
23
9 . CONCLUSIONS 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.
24
APPENDIX
25
Appendix 1: China Import
94 – FURNITURE AND BEDDING

by Country
Millions of US Dollars
Rank Country 2006 2007 2008 2006 2007 2008
200 8 08/07
% Share % Change
--World
--World--
World-- 944.44 1,298.41 1,533.05 100.00 100.00 100.00 18.07
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 Italy 44.18 94.96 102.73 4.68 7.31 6.70 8.18
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
26
by Country
(January – June)
Rank Country 2007 2008 2009 2007 2008 2009 09/08
% Share
Sha re % Change
0 --World
--World--
World-- 553.40 752.71 775.65 100.00 100.00 100.00 3.05
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
6 Italy 31.47 47.78 48.26 5.69 6.35 6.22 1.01
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
27
China Import by product in 2006 – 2008
HS Description 2006 2007 2008 2006 2007 2008 08/07
% Share % Change
--World
--World--
World-- 791,793.90 956,261.49 1,131,468.69 100.00 100.00 100.00 18.32
Furniture And
94 944.44 1,298.40 1,533.06 0.12 0.14 0.14 18.07
Bedding
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 2006 – 2008
HS Description 2006 2007 2008 2006 2007
20 07 2008 08/07
% Share % Change
Italy 8,605.62 10,216.50 11,657.47 1.09 1.07 1.03 14.10
Furniture And
94 44.18 94.96 102.73 0.51 0.93 0.88 8.18
Bedding
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
28
China Import by product in 2007 – 2009
(January - June)
HS Description 2007 2008 2009 2007 2008 2009 09/08
% Share % Change
--World
--World--
World-- 434,184.52 567,112.40 424,472.17 100.00 100.00 100.00 -25.15
Furniture And
94 553.40 752.71 775.65 0.13 0.13 0.18 3.05
Bedding
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 Import
Import from Italy in 2007 – 2009
(January - June)
HS Description 2007 2008 2009 2007 2008 2009 09/08
% Share % Change
Italy 4,845.39 5,827.19 5,255.42 1.12 1.03 1.24 -9.81
Furniture And
94 31.47 47.78 48.26 0.65 0.82 0.92 1.01
Bedding
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
29
Appendix 2: China Export

by Country
Rank Country 2006 2007 2008 2006 2007 2008 08/07
% Share % Change
0 --World
--World--
World-- 27,956.16 35,956.93 42,785.73 100.00
100.00 100.00 100.00 18.99
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
United Arab
11 373.65 554.45 899.14 1.34 1.54 2.10 62.17
Emirates
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
14 Italy 434.45 630.27 781.36 1.55 1.75 1.83 23.97
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
30
by Country
(January – June)
Rank Country 2007 2008 2009 2007 2008
200 8 2009 09/08
% Share % Change
0 --World
--World--
World-- 16,059.60 19,903.16 17,567.27 100.00 100.00 100.00 -11.74
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 Italy 289.20 391.43 336.54 1.80 1.97 1.92 -14.02
United Arab
13 220.01 348.20 332.94 1.37 1.75 1.90 -4.38
Emirates
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
31
China Export by product in 2006 – 2008
HS Description 2006 2007 2008 2006 2007 2008 08/07
% Share % Change
--World
--World--
World-- 969,323.62 1,218,155.48 1,428,869.19 100.00 100.00 100.00 17.30
Furniture And
94 27,956.16 35,956.93 42,785.73 2.88 2.95 2.99 18.99
Bedding
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 2006 – 2008
HS Description 2006 2007 2008 2006 2007 2008 08/07
% Share % Change
Italy 15,975.43 21,177.41

21,177.41 26,608.31 1.65 1.74 1.86 25.64
Furniture And
94 434.45 630.27 781.36 2.72 2.98 2.94 23.97
Bedding
32
China Export by product in 2007 – 2009
(January - June)
HS Description 2007 2008 2009 2007 2008 2009 09/08
% Share % Change
--World
--World--
World-- 546,922.76 666,417.85 521,842.43 100.00 100.00 100.00 -21.69
Furniture And
94 16,059.60 19,903.16 17,567.27 2.94 2.99 3.37 -11.74
Bedding
9403 Other Furnit,Not Seat 5,103.25 6,638.55 6,032.22 31.78 33.35 34.34 -9.13
9401 Seat (Not Dental,Etc) 5,046.88 6,399.23 5,738.52 31.43 32.15 32.67 -10.32
9405 Lamps,Lightng,Fitting 3,241.02 3,689.62 3,094.23 20.18 18.54 17.61 -16.14
9404 Articles Of Bedding 2,105.42 2,364.91 2,061.46 13.11 11.88 11.74 -12.83
China Export to
to Italy in 2007 – 2009
(January - June)
HS Description 2007 2008 2009 2007 2008 2009 09/08
% Share % Change
Italy 10,078.99 12,471.29 9,503.49 1.84 1.87 1.82 -23.80
Furniture And
94 289.20 391.43 336.54 2.87 3.14 3.54 -14.02
Bedding
9405 Lamps,Lightng,Fitting 89.65 113.71 91.37 31.00 29.05 27.15 -19.65
9403 Other Furnit,Not Seat 65.94 96.85 86.72 22.80 24.74 25.77 -10.46
33
Appendix 3: Furniture Custom Duties
Code Description MFN% GEN% VAT% ED

9401 Mobili per sedersi (esclusi quelli della voce 9402), anche
0 100 17 13
trasformabili in letti, e loro parti
9401 20 00 Mobili per sedersi dei tipi utilizzati per autoveicoli 10 100 17 13
9401 90 11 Parti di mobili per sedersi, dei tipi utilizzati per veicoli aerei 10 100 17 13
9402 Mobili per la medicina, la chirurgia, l’odontoiatria o la
veterinaria (per esempio:tavoli operatori, tavoli per esami, 0 100 17 13
letti con meccanismo per usi clinici, poltrone
9402 10 90 Poltrone per dentisti, poltrone da parrucchiere e poltrone
0 30 17 13
simili, e loro parti
9402 90 00 altri 0 30 17 13
9403 Altri mobili e loro parti 0 100 17 13
9403 3000
300 0 Mobili di metallo dei tipi utilizzati negli uffici 0 100 17 13
9404 Sommier; oggetti letterecci ed oggetti simili (per esempio:
materassi, copripiedi,
piumini, cuscini, cuscini-poufs, guanciali), con molle oppure
imbottiti o guarniti 10 100 17 13
internamente di qualsiasi materia, compresi quelli di
gomma alveolare o di materie
plastiche alveolari, anche ricoperti
9405 1000 Lampadari ed altri apparecchi per l’illuminazione, elettrici,
da appendere o da fissare
al soffitto o al muro, esclusi quelli dei tipi utilizzati per 10 80 17 13
l’illuminazione delle aree
o vie pubbliche
Lampade da comodino, da scrittoio e lampadari per interni,
9405 2000 20 80 17 13
elettrici
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 l’illuminazione non elettrici 20 80 17 13
9405 6000 Insegne pubblicitarie, insegne luminose, targhette
indicatrici luminose ed oggetti 20 80 17 13
simili
9406 0000 Costruzioni prefabbricate 10 70 17 13
Source from China Customs
MFN: Duty rate for Most Favored Nations GEN: General

VAT: Value Added Tax ED: Export Duty
34

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FURNITURE

FURNITURE MARKET IN CHINA

2. MARKET OVERVIEW ………………………………………………………… 4

3. INDUSTRY LANDSCAPE …………………………………………………...… 6

4. PRODUCTION OVERVIEW ………………………………………………….. 8

6. DISTRIBUTION SYSTEM ……………………………………………………... 20

8. CONSIDERATIONS FOR ITALIAN PLAYERS …………………………….... 22

9. CONCLUSIONS AND RECOMMENDATIONS …………………………...... 23

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

Doing market research in China and Methodology

Generally speaking, conducting market research in China is different and

1) The size and diversity of the country;

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

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

China Furniture Industry

Source of data: China National Furniture Association

Source of data: China National Furniture Association

4.1 Product Quality and Production Technology

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

• Simple, Cultured and Personal Design

• Chinese and European classical style

• Eastern and Western mixture modern style

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

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

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

5.1 China Import

United States 8.80%

Korea, South 7.42%

United Kingdom 4.34%

Source of data: China Customs

China - Imports - Furniture Others 18.98%

Korea, South 16.33

United States 6.46

United Kingdom 2.30

Source of data: China Customs

Furniture - Imports - Total - from Italy

Source of data: China Customs

Furniture - Imports - Total - from Italy

Source of data: China Customs

Top three imported furniture categories total

Source of data: China Customs

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

HS 9406 Prefabricated buildings

Top three imported furniture categories from Italy

Source of data: China Customs

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

HS 9406 Prefabricated buildings

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

- Furniture - Exports - Total - to Italy

Source of data: China Customs

Source of data: China Customs

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

Top three exported furniture categories to Italy

Source of data: China Customs

HS 9406 Prefabricated buildings

For more details, please read APPENDIX 2: CHINA EXPORT

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

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

Manufacturers specialised in the production of replicas of Chinese antique

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