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MARKET ALERT China Furniture and Malaysia Furniture

The world economy has been truly globalized due to technological advances, scarcity and abundance of resources in many parts of the world, plus moving knowledge and expertise in current knowledge-based economy. These trends pose a more competitive world in doing business for many firms in many countries. Companies are engaging sustainable competitive approach and technology strategy to efficiently manage their resources. China, has been dubbed as “the world super-contractor” particularly in manufacturing, poses global effects on worldwide business operation. Furniture production is highly correlated with construction industry of a nation, given the fact that buildings, office or homes, require furniture as parts and parcels of their finishing. According to the 2012, China is the largest furniture exporter in the world and its wood furniture industry has become an important part of the their country's forestry economic development. China’s furniture industry has developed in three large areas over the last 30 years, namely, the Eastern Pearl River Delta, the Yangtze River Delta, and the Bohai Rim Region. The country's midwestern area will take over China's industrial production. At present, China's furniture products have an important position in the world market. In 2010, furniture exports accounted for 27 percent of the world's total exports, with wood furniture accounting for US$10.6 billion worth of exports, or 58 percent of China's total exports of furniture. China's office furniture and kitchen furniture have price advantages, whereas the bedroom furniture lacks price advantages. In particular, the production and export of mahogany furniture may be hampered by raw material shortage because of the protection of tropical forest resources. This challenge puts China's furniture industry in future competition with emerging countries such as Malaysia.

The international market of China's furniture had expanded to over 200 countries and regions (China State Forestry Administration 2011). The top 10 countries in the list accounted for 65 percent of China's total furniture exports. The United States relied heavily on China's furniture and was the largest importer of China's furniture products, with imports reaching US$5.8 billion in 2010 and constituting more than 32 percent of China's total exports. According to the official 2010 statistics, China's major categories of exported furniture are wood furniture, metal furniture, and bamboo rattan furniture. As the most important export category, wood furniture exports reached US$10 billion, including mahogany and lacquered furniture, bedroom wood furniture, kitchen wood furniture, and office wood furniture. The Malaysian furniture industry today has transformed into a technologically advanced multi-billion ringgit industry from a traditional, domestic cottage-based production in the beginning years in 1980s according to Malaysian External Trade Development (MATRADE) website. The furniture industry gearing towards high technology production capacity and with increasing emphasis placed on design, the Malaysian furniture industry has the potential to achieve great amounts of furniture exports. Increased productivity, market expansion and aggressive promotional efforts are also instrumental in increasing Malaysia's furniture exports. In 2010, Malaysia ranks as the eighth largest exporter of furniture in the world and third in Asia after the China and Vietnam, with exports to more than 160 countries. Speaking about furniture, Malaysia is wealthy in high quality timber, which has great demand in furniture since ancient times. In the 1980s, plywood was frequently utilized as the material to manufacture furniture. The furniture transformed from the heavy and dull stereotype to light and elegant ones. The newly born design has led the vigorous development of furniture industry in Malaysia. Furniture boom occurred, people began

to care the design of their own house and furniture. With the boom of furniture, the street of furniture shops is built. Nevertheless, as a furniture exporting country, families in Malaysia often use local manufactured furniture or imported furniture from China and Indonesia, thus the designs of furniture that reflect the sense and cultural traditions of races are not seen commonly. As a conclusion, to export Malaysia’s furniture to China is not easy because of the competition there in term of wooden furniture. As mentioned before, China is the largest furniture exporter in the world and its wood furniture industry has become an important part of the their country's forestry economic development. But, it doesn’t mean that Malaysia cannot compete with China furniture, as long as Malaysia can produce more high-value furniture to be exported. Malaysia also can develop the furniture industry by improve the marketing strategies, invest in Research and Development for product design, and built effective global manufacturing, supply and marketing. Besides that, in effort to improve and increase the quality and percentage of high-value furniture export from Malaysia, the manufacturers also must concern to promote Malaysian manufacturers production capabilities to the world and elevate their image through showcase of high‐end designs and application of traditional/alternatives/new materials. The designers also can attend and showcase their designs at International Prestigious Design show and be exposed to world‐class design community through organized events and meetings to make Malaysia Furniture well known in the world.