Furniture makers crossing fingers on global rebound

CEBU, Philippines — Furniture exporters are crossing their fingers as they hope for a 10 percent to 15 percent growth in 2020, banking on the renewed interest of the global market coupled with a flourishing local demand.

"The plan of the industry is to go on a massive marketing strategy. Our target is to go to 10 markets for three years. That's where we feel the buyers can really feel our presence because that is important," said Myrna Bituin, Philippine Exporters Confederation Inc. (PHILEXPORT) trustee for the furniture sector in a statement.

On the other hand, Cebu Furniture Industries Foundation (CFIF) board member Laurie Boquiren said the name of the game now is to work together and collaborate in order to stay on top. This include mounting more joint aggressive marketing campaign while countries like Cambodia and Vietnam are threatening the industry’s position in the world market.

There is no reason for the furniture sector to surrender and give in to the dry spell for years. In Cebu, players are fighting head on with the competition, uniting to sustain Cebu’s unique reputation in design and responsible production.

The collaboration of producing sustainable home furnishing products, including fashion accessories, through using sustainable materials, upcycling, and other environment friendly methods is seen to protect the industry from being affected from competition.

While the export business in home furnishing is sustained by the design-driven market, customized clients, and sustainable green product, the industry is also bolstered by the dynamic property market in the Philippines.

The domestic market has become the industry’s regular client and it has been able to sustain the industry in the last couple of years when the global market dropped primarily due to the US sub-prime problem that heightened in 2008.

Also, Bituin underscored the importance of "strong" product development for export markets.

“Product development is very, very important. It should never be considered just a part but it's an integral part of your business to have product development because you have a major show wherein the buyers would come every year," she reasoned.

Bituin said they are keen on tapping new export markets, particularly Doha, Qatar, Lithuania and Russia.

In the Asean region, Philippine furniture makers are considering Malaysia a "very good market" for the local furniture makers.

Meanwhile, United States remains their biggest export market, as they also tap the huge Japanese market, she said.

“I think we will be working hard in partnership with our trade consuls. We have to invest on foreign trips. Again, our trade consuls will be of great help to us," she said adding that one of the things the industry can do is partnership or collaborate.

“We are not opponents. The industry should harmonize with one another when it comes to projects," she added.

Bituin further said furniture manufacturers have been also very active in the local market while incurring slight gains in exports.

“Fortunately, as we can see, not only new hotels but hotels are refurbishing. All big hotels, they are now refurbishing, not only the furniture but the indoors (items) and that makes them really busy," she said.

Customized

Home furnishing manufacturer and exporter Pedro “Pete” Delantar sees customized furniture products to rise further in 2020.

Customized furniture will not only in demand in the local market, but it is also the trend in the global market.

Delantar, president of Nature’s Legacy Eximport Inc., said what’s sustaining the growth of furniture making in Cebu is the growing demand for customization, fueled by the robust real estate and tourism sectors.

Delantar, whose company has been in the furniture manufacturing business for 35 years, said for his company alone he noted an average of 15 percent growth of customized or made-to-order furnishings primarily from institutional customers like hotels, resorts, condominiums, restaurants, and any property that aims to have a unique look or what he described as “instagrammable”.

“Everybody wants to be different,” said Delantar explaining why the company opened up a new 700 square meters showroom in Mandaue City last year, to accommodate the made-to-order market.

From a traditional furniture exporter, Delantar said Nature’s Legacy has evolved into a hospitality fit-out provider.

Gone were the days when hotels, resorts, restaurants or even mansions buy bulk of their furnishing needs from off-the-shelf furniture stores here and abroad. The trend now, Delantar said is customized designs.

The Nature’s Legacy showroom located in Remedio Street, Mandaue City also showcases the company’s evolution in furniture making in three decades. It has successfully made its mark as one of the trailblazers in sustainable processes and product innovation in the world—in the field of furniture manufacturing.

Delantar, who is a trustee of Chamber of Furniture Industries in the Philippines (CFIP), added that the market preference has changed a lot in the recent years.

Customers now pay for premium, and to be different. This is where Cebu furniture industry in general draws its lifeline, amid the sluggish global market demand.

For Nature’s Legacy, its niche as a green manufacturer also boost its marketability especially in the export market as customers already demand for sustainable products and processes.

Unesco

One of the top growth drivers that will push the recovery of Cebu’s furniture sector is its position as a UNESCO declared “Creative City” in design.

“Definitely the creative sector i.e. furniture, fashion accessories, GTH, [and others] will benefit in this proclamation,” said Department of Trade and Industry (DTI-7) regional director Asteria Caberte.

Caberte said Cebu’s edge on design is being magnified by this prestigious citation, and that this could awaken the vibrancy of the entire furnishing industry, as well as boost the whole economy in Cebu.

Based on the projection made by renowned economist Bernardo Villegas that Cebu will take a huge chunk in the reign of four Fs (Food, Fashion, Furnishing and Fun).

The province tourism edge will bring more money to the economy in 2020. The food, fun and fashion are part of the tourism revenue streams, said Mandaue Chamber of Commerce and Industry (MCCI) president Stanley Go.

Businesses that deal with these kinds of services will thrive, he said.

Cebu’s declaration as a designated UNESCO “Creative City” in design category does not only a boost to tourism, furnishings, but also in real estate.

According to ResearchAndMarkets.com the furniture market is expected to grow at an impressive rate during 2017-2021. Rise in domestic as well as export demand of furniture products is anticipated to result in market growth. Since tourism based enterprises such as hotels, restaurants, museums and leisure service providers face growing needs to update their amenities; the demand for unique furniture items is expected to rise sharply.

Apart from the robust hotel sector, construction of more condominiums and residential houses in the country is expected to drive the growth of the industry in the coming years.

The furniture industry in Philippines is highly competitive owing to large number of companies, both domestic and international, offering furniture products at competitive prices with limited variations in design and aesthetics. Furniture products of all price segments, including cheap, mid-segment and luxurious/premium ones are designed by several manufacturers to cater to customers of all classes.

Generally, manufacturers and retailers focus on targeting a particular customer segment based on purchasing power of consumers.

Despite the presence of international brands, the unorganized players largely cater to the furniture demands of the country. They offer cheaper and customized solutions for furniture needs across the country.