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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 large variety of raw materials are used in production, including wood, rattan, plastic and metal. Wooden furniture is the industry’s leading category in terms of production and exports.
  • Hong Kong companies have strong design capability, but also accommodate 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. They have become more careful about their choice of raw materials, in order to meet international standards and comply with legal and environmental requirements in their target markets.
  • With a rising demand for space-saving furniture and a growing preference for personal style, custom-made and multi-functional furniture has become increasingly popular in recent years.

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 furniture parts.

Most of the industry’s manufacturing activities are now carried out in Mainland China. Head offices in Hong Kong act as a controlling office principally responsible for high value-added services such as management, finance, accounting and marketing, while production plants in Mainland China utilise the advantage of lower operational cost.

A wide variety of raw materials are used in furniture production, including wood, rattan, plastic and metal. In terms of production and export share, wooden furniture is the industry’s leading category. That includes rosewood and black-wood furniture, especially wooden tables, chairs and wardrobes. For many Hong Kong furniture manufacturers, Asian countries are the major source of raw materials. Solid wood, for example, 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

While specialty stores, 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 and department stores, while online sales are gaining momentum. In these mature markets, retailers and wholesalers increasingly source furniture directly from manufacturers, while some still purchase through agents and distributors.

In Mainland China, specialised furniture districts and furniture hypermarkets are popular for both retail and wholesale business. With the rapid rise of e-commerce in China, the omnichannel model is increasingly becoming adopted by furniture brands and retailers. Consumers can examine the products in stores and then buy online and have the goods delivered to their home.

Many Hong Kong manufacturers produce furniture products on an OEM/ODM basis for major foreign brands. For example, JF Household Furnishings Ltd is one of IKEA’s suppliers. A large number of Hong Kong furniture manufacturers have established their own retail outlets in overseas markets, particularly in mainland China. Lamex, Four Seas Furniture and Dickson Furniture are among those companies that 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 and 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 are looking to reduce their production costs and increase efficiency. Some have relocated their manufacturing operations to other areas with lower operational costs. Hong Kong's furniture manufacturers have also started to develop their own brands. Notable examples include mattress manufacturers marketing their own brands in local and overseas markets. Furniture manufacturers have also become more careful about their choice of raw materials, in order to meet international standards and comply with legal and environmental requirements in their target markets.

Mainland China is the largest furniture exporter to many countries, including the US and Japan. The country’s furniture exports are mainly produced from the industry clusters in Southern and Eastern China. Manufacturers from other countries, such as South Korea, Singapore and the US, have begun to follow those from Hong Kong by setting up production plants in Mainland China. 

China also offers a huge potential market for furniture manufacturers. The increasing purchasing power of Chinese consumers, alongside continued urbanisation and booming tourism, is driving demand for both residential and hotel furniture, as well as other higher-end products. In 2018, the total retail sales of furniture products by wholesalers and retailers above a certain scale in China grew 10% to RMB225 billion. Some foreign companies are actively seeking business partners in China to explore opportunities for setting up production or sales operations in China. Hong Kong is in an excellent position to act as a platform for these companies looking to enter the mainland market, given its long experience of production and distribution networks on the mainland, and its reputation for quality, integrity, reliable delivery and management.

CEPA

The Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) was concluded in June 2003 and has subsequently been expanded in following years. All products made in Hong Kong, subject to CEPA's rules of origin, enjoy duty-free access to Mainland China.

In December 2018, the mainland and Hong Kong signed the Agreement on Trade in Goods under the CEPA framework, which strengthened the arrangements for rules of origin (ROOs). From 1 January 2019, goods of Hong Kong origin are liable for a zero tariff when imported to the mainland. In addition to the product-specific ROOs (PSRs), Hong Kong and the mainland introduced a general rule of origin (General Rule) based on the calculation of the value-added to the products in Hong Kong. Products without PSRs also benefit from a zero tariff when imported to the mainland, as long as the terms of the General Rule have been satisfied. For details on the PSRs, please read ‘Product Specific Rules of Origin Under CEPA’.

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 height requirements for children furniture, and fire safety requirements for bedding, mattresses, fabric sofas and curtains. In 2002, a law was passed in Japan to monitor and reduce chemical contaminants from interiors, which restricts the use of materials that emit harmful substances.

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 on imports of plant and plant products, including products made of wood. Importers must 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 government passed the Formaldehyde Standards for Composite Wood Product Act, which came into effect in January 2011. This 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.

For the latest laws and regulations on the furniture industry in overseas markets, please refer to ‘Product Safety Laws and Standards’.

Product Trends

Customisation: In recent years, bespoke furniture has become more popular among consumers looking to maximise their home space and express their personal style. With the development of flexible production technology, mass production of bespoke furniture with personalised design is now feasible.

Multi-functionality: Flexible, functional and smaller furniture which incorporates more than one function is becoming increasingly popular. This includes products such as a raised bed with lots of storage space underneath and folding chairs hung on a wall, which can help provide storage solutions and free up floor space.

Green furniture: Increasing environmental awareness and more stringent legal requirements worldwide have led to furniture manufacturers becoming more cautious when choosing raw materials for production and painting. For example, they use fabrics that do not give off toxic fumes in the production process, such as polypropylene. To try to meet concerns about the effect of deforestation and climate change, 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, while others are designing furniture which uses fewer raw materials.

Rising health awareness: With consumers’ becoming increasingly aware of how sleep quality affects their health and wellbeing, demand for high quality mattresses and bed textiles that can improve sleep is rising. 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 because of the growing prevalence of chronic pain and injury caused by long hours of sedentary work and repetitive motion.  The growing trend for working from home, especially in the US, is driving the demand for home office furniture.


[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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