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Furniture & Furnishing Industry in Hong Kong

Overview

  • The furniture and furnishing industry is a manufacturing sector in Hong Kong with a long history. It includes the production of household, office and kitchen furniture, as well as mattresses, bedding and parts of furniture. A vast variety of raw materials are used in production, including wood, rattan, plastic and metal. Among others, wooden furniture is the major production and exports of the industry.
  • Hong Kong companies have strong design capability, while accommodating themselves to OEM orders from overseas buyers. Some specialise in the manufacture of higher-end set furniture for hotels, offices and other real estate projects under tender-contracts.
  • Hong Kong's furniture manufacturers have also started to develop their own brands. 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.
  • Green furniture is a major product trend. As a result of the increasing awareness about environmental protection and more stringent legal requirements worldwide, furniture manufacturers are more cautious in choosing the materials for production. Some manufacturers are adopting a de-materialisation approach by designing furniture which uses less material. Furniture painting also needs to be environmentally friendly.

Industry Features

Hong Kong's furniture manufacturers engage in the production of a wide range of products including household, office and kitchen furniture, as well as mattresses, bedding and parts of furniture.

Most of the manufacturing activities of the furniture industry are now carried out on the Chinese mainland. With 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 utilise the advantage of lower operation cost.

A wide variety of raw materials are used in production, including wood, rattan, plastic and metal. Among others, wooden furniture is the major production and exports of the industry. It includes furniture in rosewood and black-wood, especially wooden tables, chairs and wardrobes. To many Hong Kong furniture manufacturers, Asian countries are the major source of raw materials. For example, solid wood is mainly sourced from Malaysia and Thailand, while Indonesia is the major supplier of rattan.

Performance of Hong Kong Furniture Exports[1]

Table: Performance of Hong Kong Furniture Exports
Table: Performance of Hong Kong Furniture Exports
Table: Performance of Hong Kong Furniture Exports
Table: Performance of Hong Kong Furniture Exports
Table: Performance of Hong Kong Furniture Exports
Table: Performance of Hong Kong Furniture Exports

Sales Channels

On the retail side, while chain stores and hypermarkets are still the dominant sales channels in North America, buying furniture online has become more popular in recent years. In Japan, imported furniture is mainly sold in specialty stores as well as department stores. In these mature markets, retailers and wholesalers increasingly source furniture directly from manufacturers, while some still purchase through agents and distributors. On the Chinese mainland, however, specialised furniture districts or shopping malls are popular for both retail and wholesale business.

Many Hong Kong manufacturers produce on an OEM/ODM basis for major foreign brands. For example, JF Household Furnishings Ltd, a listed company in Hong Kong Stock Exchange, is one of the suppliers of IKEA. Many Hong Kong manufacturers have established their own retail outlets in overseas markets, particularly on the mainland, for example, Lamex, Four Seas Furniture and Dickson Furniture have set up subsidiaries, branch offices and sales outlets in major Chinese cities to facilitate domestic sales.

Low to medium-end products are often sold in hypermarkets. For standard products such as garden chairs, folding chairs, shoes racks and mattresses, Hong Kong manufacturers mainly rely on trading firms, foreign buying offices stationed in Hong Kong. They may also appoint sales agents to develop overseas markets. 

Industry Trends

Competition is keen in the furniture industry. Many companies strive to reduce their cost of production and increase efficiency. Some relocate their manufacturing operations to other areas with lower operation cost. Some foreign manufacturers are taking steps to strengthen their domestic production through product specialisation.

Hong Kong's 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. 

The Chinese mainland is the largest furniture exporter to many countries, including the US and Japan. The Pearl River Delta (PRD) has the highest concentration of the furniture industry. Apart from Hong Kong, manufacturers from other countries, such as Korea, Singapore and the US have also set up production plants on the mainland.  

China also offers a huge potential market for furniture manufacturers. The increasing consumption power of Chinese people, its property market development and promising tourist industry serve to drive the demand for both residential and hotel furniture, as well as other higher-end products. In 2017, the total retail sales of furniture products by wholesalers and retailers above a certain scale in China grew 12.8% to RMB280.9 billion. Some foreign companies are actively seeking for business partners in China to explore opportunities of setting up production or sales operations in China. Hong Kong can act as a platform 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 its quality, integrity, reliable delivery and management. 

CEPA

The Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) was concluded in June 2003 and subsequently expanded in following years. All products made in Hong Kong, subject to CEPA's rules of origin, enjoy duty-free access to the Chinese mainland. For detailed information, please read ‘Goods entitled to CEPA Zero Tariff Preference’.

Trade Measures Affecting Furniture Exports

Exports of furniture are subject to relevant safety and environmental requirements. Safety requirements include, for example, the stability, strength and even height requirements for children furniture, and fire-safety requirements for bedding, mattresses, fabric sofas and curtains. In October 2002, a law was passed in Japan to monitor and reduce harmful gas emissions from interiors, which would hinder the use of materials.

The US is imposing anti-dumping duties on wooden bedroom furniture from China. Currently the dumping margins range from 0.83% to 216.01%. In May 2008, the US approved legislation that significantly tightens the requirements for the importation of plant and plant products, including products made of wood. Importers are required to file a declaration upon importation that contains (i) the scientific name of any plant (including the genus and species) contained in the importation, (ii) a description of the value and quantity (including the unit of measure) of the importation and (iii) the name of the country from which the plant was taken. In July 2010, the US enacted into law the Formaldehyde Standards for Composite Wood Product Act which came into effect in January 2011. This Act sets the standard for formaldehyde emissions from related wood products for sale in the US.

In August 2017, the European Commission published new EU green public procurement (GPP) criteria for furniture. The EU GPP criteria are voluntary criteria which aim to facilitate the inclusion of green requirements in public tender documents. The new criteria for furniture were developed with the objective of prolonging product lifespans and minimising waste, which entails procuring furniture which is durable, fit-for-use, easy-to-disassemble, repairable, recyclable and covered by a warranty for repair or replacement.

Product Trends

Green furniture: As a result of the increasing awareness about environmental protection and more stringent legal requirements worldwide, 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 view of rising concerns about the effect of deforestation and climate change, some alternative materials, such as bamboo, are used to reduce the consumption of wood. Some manufacturers are also making furniture from recycled products, such as reclaimed wood and old teak from wood buildings. Some manufacturers are adopting a de-materialisation approach by designing furniture which uses less material. Furniture painting also needs to be environmentally friendly.

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 cluttered 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. 

Ready-to-assemble (RTA) and Do-it-yourself (DIY) furniture: RTA and DIY furniture and home furnishing products have gained popularity around the world, especially in Europe and North America.

Fast fashion concept: Consumers in Asia are beginning to favour lower-value items that can be purchased and replaced frequently to keep up with seasonal and fashion trends. The shift towards smaller or childless households and rising numbers of single-person households, particularly in Japan and Korea, also drive the demand for cheaper furniture and small decorative items.

Rising health awareness: With consumers’ growing awareness of the role of sleep quality in health and well-being, they are increasingly willing to invest in high quality mattresses and bed textiles to improve sleep. In particular, for the professionals and elderly consumers, healthy sleep is considered important in handling stress and maintaining health. Many local and foreign manufacturers of mattresses and beds are extending their product lines focusing on healthy sleep products with new innovations.

Ergonomic office furniture: Functional products, such as sit-to-stand desktops, ergonomic chairs and adjustable keyboard trays, are becoming popular in workplaces given the prevalence of work-related chronic pain due to long hours of sedentary work and repetitive motion. 


[1] Since offshore trade has not been captured by ordinary trade figures, these numbers do not necessarily reflect the export business managed by Hong Kong companies.

Content provided by Picture: Jacqueline Yuen
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