Mainland Touts Furniture Exports At Shenzhen Show

The five-day Shenzhen International Furniture Expo (SIFE) was kicked off on March 19 this year with a high-profile opening ceremony. The biannual furniture-trade show was set up this year as a platform for export promotion, the first time exports have been given center stage since the show's launch in 1996.

To build the show's international image, organizer Shenzhen Furniture Trade Association lured nine foreign procurement groups from Spain, Canada, Belgium, Britain, Poland, Australia, the United States and Japan to sign up for visits before the show. In addition, the show attracted 8, 041 foreign visitors and 36, 620 local.

At least 600 suppliers, most of which were mainland Chinese locals, demonstrated their latest products at the March event, which for the first time hosted exhibitors from the mainland's hinterland provinces and cities such as Fujian, Sichuan, Zhejiang, Jiangsu, Shandong and Beijing to help them boost exports.

The show was held at the 200, 000-square-meter Shenzhen Convention & Exhibition Center, which was opened last year. Suppliers occupied the nine halls of the exhibition center, which features an avant-garde domed roof and glass screens.

On the show ground, demonstrated products were categorized into board-based modern furniture, sofa and soft furniture, classical furniture, ornament article, furniture accessories and materials, outdoor furniture, office furniture, and composite-material furniture lines. These products were completely supplied by brand-name manufacturers and came with innovative designs. It was one of the few mainland Chinese furniture trade fairs promoting own brands and innovative designs.



Branding Out


"Over the long-term, we need to build our brand names since OEM-based products are no longer profitable. For mainland manufacturers, low-production costs and high manufacturing quality are our advantages in brand-name competition, " commented Weiye Huang, president of the Shenzhen furniture association, explaining why the show featured so many own-brand items.

His association has organized member manufacturers to demonstrate their branded products at shows in major markets overseas, such as the Middle East and Europe.

In order to handle patent disputes, the Shenzhen furniture show has always had a legal consulting booth. At the March event, the consulting service was offered by the Shenzhen Trademark Association. The association's vice chairman, Lin Lixuan, noted that many patent disputes erupt over furniture designs. "There are far fewer such disputes at this show compared with earlier years, " he says. "I think this is because an increasing number of big name local makers are participating, and they can not afford the shame of being labeled a copycat, " Lin said. In the mainland, infringement of patented designs carries a fine of up to RMB100, 000 (US$12, 000 at US$1:RMB8.27).

Huang's association is dedicated to making the Shenzhen trade show one of the most influential furniture events in Asia if not the world. "In Asia, we are already the No. 1 show of this kind by exhibitor number and transaction value. In future, I think this will be the place to see furniture trends in China."

Over the 16 years since its creation, the Shenzhen show has attracted over 1.3 million visitors, secured on-site orders worth RMB21.1 billion (US$2.5 billion) and generated export orders valued at US$1.2 billion, according to Huang's association. This year alone, transaction value totaled RMB7.1 billion (US$860 million), of which US$250 million represented export sales.



Furniture Capital


Association statistics showed that Shenzhen's furniture industry reported total revenue of RMB38 billion (US$4.5 billion) last year, representing around 20% of the mainland's furniture industry as a whole. The association's 400-strong members accounted for around 60% of the Shenzhen industry's revenue, leaving the remaining portion contributed by the 600-some non-member suppliers. Half of the city's furniture output is exported.

Shenzhen's modern furniture industry began in 1984 with the production of board-based furniture, according to Huang. "This city introduced the mainland's first automated production line for making board-based furniture. Today, it is the furniture capital of the mainland, " Huang boasted. The accomplishment of the Shenzhen industry came as a result of government encouragement, including tax incentives. According to Huang, Shenzhen was the first mainland Chinese city to be granted tax incentives to boost its industrial development after the mainland first introduced its economic reform policy.

The government has also pitched in to support the creation of a 2.2 million square-meter industrial park dedicated to the city's furniture industry. "The industrial park is designed to form an industrial cluster led by 20-some major suppliers in different areas, which are supported by various peripheral-product suppliers nearby, " Huang explained.

The Shenzhen Furniture Design Institute is another city government effort to back up the city's furniture industry. The institute, well equipped with various product inspection tools and 150 design and examination specialists, is installed in the association's headquarters building.

Shenzhen's bustling economic development has also proven a boon for local furniture makers by fueling consumption, Huang said.

The strong domestic market also laid the foundation for the Shenzhen's furniture industry to begin tapping the export market several years ago. With low production costs, the city's furniture industry and the industries in other cities in the mainland have lured huge orders away from suppliers in the West, leading to recent anti-dumping charges of American suppliers against mainland China-made bedroom wood furniture. Huang said he is not worried much about the accusations. "The charges, " he said, "come mostly because of the different understanding between suppliers in China and the United States on costs."

This year, SIFE arranged booths along a U-shaped route so visitors could easily navigate through most of the booths along a path leading from entrance to exit. A newly completed city subway system provided convenient access to the fairground, and a new line to open at the end of this year will cross right under the convention building.

In spite of SIFE's efforts to become an international event, buyers like Jueren Billich, R&D director of Zhongshan Perro Plastic Products Co., felt the March event was not international enough. "I don't see many professional foreign buyers here. I think it must have to do with the other two similar trade shows being simultaneously held in Guangdong along with this show. Because they compete each other to attract foreign buyers, " he said, adding that he did not find exactly what he needed at this show. "So, it's still too early to say now whether I will come to this show next time or not, " he added.



Couch Potato Heaven




Many other visitors, however, said that they were pleased with SIFE's selection. At Zuoyou Furniture Co., Ltd.'s booth, Fan Xinhua, the company's Shenzhen manager, demonstrated a patented sofa set composed of a main couch and three auxiliary pieces. At 1.7 meters x 3.2 meters, it can seat at least four people. "This set is designed for the growing numbers of households with home theaters, " Fan explained.

The headrests of the main couch are angle adjustable and users can lie propped up by raising the main couch's seat.

Fan's company spent two months or so developing the furniture set. "The sofa uses high-density sponge to increase comfort, " Fan says. The cushions are covered in stain-resistant cloth.

Fan says the sofa set retails for RMB10, 200 (US$1, 230), which puts it in reach of mainland consumers who are buying homes in the RMB 500, 000 (US$62, 000) range.

When asked if the mainland's macro-economic control had influenced the mainland's furniture market, Fan said it had affected only low-end and middle-range markets, leaving the high-end market pinpointed by his company intact.

Fan pointed out that the adjustability of the sofa underscored the point that Chinese furniture is versatile in style. "Like the diversity of Chinese cuisine, " Fan added.

Fan's company runs around 500 shops, with the farthest one located in the westernmost province of Xinjiang. "We have snatched up around 3% to 4% of the domestic sofa market, " he said. The company has seduced local buyers with ads featuring the coach of the mainland's Olympic female champion volleyball, Chen Zhonghe. "Chen is a capable and down-to-earth man of few words. That is the spirit of our company, " Fan said.

Zuoyou set up a department dedicated to export development last year, according to the company's marketing majordomo, Mike Hong. He reported that over 70% of the mainland's sofa factories are run by former workers of his company.

Zuoyou has created three brands for export products, Hong noted. "Exports accounted for 20% of our revenue. We project that figure to reach 50% in a few years, " Hong said.



Board Furniture


Renhao Furniture is among the top-five suppliers of board-based furniture in Shenzhen, though the company also showcased solid-wood pieces at SIFE. "Compared with board-based furniture, solid-wood pieces have greater value, " explained marketing manager Yang Menzheng.

Yang said that demand for board-based furniture had slowed in recent years, whereas demand for solid-wood furniture had surged sharply. "Consumers of board-based furniture must have a bit of money, while solid-wood furniture buyers are definitely well off, " Yang said.

In mainland China, the company sells its products under the "D.N.Y" brand. In overseas markets, the company has not aggressively pitched its own brand, though it does insist on designing its our products, " Yang stressed.

Yang said that his company has been largely untouched by the mainland's macro-economic controls. Indeed, the company doubled its domestic sales last year to RMB200 million (US$24 million). "We expect business to grow at an impressive pace this year, " he said.



Antiques, Real and Fake


At the booth of Original Life Furniture Plaza, displays focused on furniture pieces made in Qing and Ming Dynasties. According to company general manager Sam Chen, these pieces were collected from the private sector at significant cost. The company bagged a lot of order on the first day of the show, Chen says, justifying its high purchase costs. In addition to real antique furniture, the company supplies faux-antique furniture.

Chen pointed out that demand for Chinese antique furniture overseas is much higher than the demand for such items in the mainland. "But the competition in this market has become more intensive in recent years as more suppliers have shown up, " he noted.

Opened in 1988, Original Life controls 50% of Shenzhen's antique-furniture market, Chen said.



Royal Design


Not far away from Original Life's booth, CH Beijing Royal Furniture Co., Ltd. Was showing off classical European-style furniture of its own design. The company demonstrated its products at the Shenzhen show for the first time.

"China's classical European-style furniture is mostly based on the romantic and elegant esthetic of Italian furniture, " said designer Zhao Junying. He pointed out that demand for European-style classical furniture has increased sharply in the mainland since the 1980s, when the mainland began opening to the world. Demand is greatest, he said, among the rich and well educated.

Zhao's company was founded in 1987 in Beijing as a producer of furniture for the government. "Government furniture is usually classic in style. With this production experience, we were able to smoothly enter the market for classical European-style furniture, " Zhao explained.

Zhao said he blends Chinese art into his European-style designs to make them more attractive to Chinese consumers.

At SIFE, Original Life displayed furniture highlighting vivid geometrical lines, which Zhao claimed is a magnet for foreign buyers.



Composite Materials


In a massive booth in a corner of Hall 6, Wenzhou CERF-D'OR Co., Ltd. Displayed its latest composite-material furniture composed of metal frames, glass table stands, wood parts and leather covers. According to company general manager Shen Chengming, this is the company's first time at SIFE. "Tapping export orders is our motivation to exhibit here, " explained Shen, whose company is based in Zhejiang province.

Shen's company began producing own-branded products in August last year after serving as a furniture processing company for many years. "We've received plenty of orders from foreign buyers at this show, so I'm very satisfied, " Shen claimed. The company makes dining room, office and living room furniture. "This year, our products underscore the combination of metal, glass, wood and leather as well as precision design."




Low Maintenance Greenery




Artificial-vegetation suppliers from Foshan, Guangdong Province demonstrated their products at this show for the first time. Among them was Tongxin Artificial Flowers Factory, which introduced its own-brand products in 2002. "We were so busy taking orders on the first day of the show, we didn't even have time for lunch, " said director Wendy Liao.

Liao said Foshan is a leading player in the mainland's artificial vegetation industry. "The Foshan industry is dedicated to the production of high quality and well-designed products in this segment, " she said. However, her company's diligent efforts in developing innovative products have paid off as much for her company as they have for copycat peers. "Artificial flowers tend to be copied, and it is difficult to prove design infringement since flower patterns are inspired by nature. No one can claim they own a patent on a natural design, " Liao said.

Liao's company ships around 70% of its products overseas. The mainland's domestic consumption of artificial vegetation, she said, is also huge and northern provinces are the major markets. "In winter time, live flowers are rare to find in the snow-covered northern provinces. At that time, demand from [the northern] provinces booms, " she said. Liao added that her company will exhibit its products overseas next year.



Toxin-Free Paint


Huarun Paints Holding Co., Ltd., the largest paint supplier in Guangdong, was promoting toxin-free paint at its SIFE booth this year. Executive director Ye Hanci said that paint quality will decide the future of the mainland's furniture industry. "As more and more developed countries have imposed stricter regulations on furniture coating from the points of environmental protection and human health, Chinese suppliers must develop toxin-free paint, " he stressed.

According to Ye, the mainland's thousands of paint suppliers put out a combined 600, 000 metric tons of the material valued at around RMB9 billion a year for wood furniture. But most of them more or less contain substances that can cause health problem. "So, I urge Chinese paint suppliers to develop water-soluble products and ultraviolet-baking methods, " he said. Ye noted that the most advanced types of water-dissolvable techniques are used in Europe, and some Taiwanese suppliers have formulas to make water-dissolvable resins for toxin-free paints.




Earth-Friendly Materials


Another eyecatching section at SIFE this year featured a condensed board made of chopped crop roots mixed with formaldehyde-free glue, and a special steam-heating methodology that enables furniture suppliers to turn out thick condensed fiberboard. The two techniques were developed by Nanjing Forestry University, one of a handful of mainland universities dedicated to researching wood-material techniques.

According to Zhang Yang, a professor of wood science and technology at the university, the new board is environment-friendly since they are biodegradable and free of any formaldehyde-based glue.

Zhang pointed out that the new board-making technique had been included in the mainland's national "No. 863 Project", which lists several high-tech plans for priority development. He reported that the mainland began volume production of the boards in 2001 after 10 years of development. Zhang said that his university has secured more than 10 patents on the new technique, which can be used to make boards with a maximum thickness of 100 millimeters.

The university's special steam-heating technique features needle-size holes on a massive heating iron, which allow boiling steam to deeply penetrate into pressed fiberboards. "This method allows the boards to be completed faster than with traditional methods that do not have the holes and allows the boards to be made in much thicker sizes since the heat can deeply penetrate into them, " Zhang said. With the heating technique, boards can be turned out in at least 25-mm thickness.

Nanjing Jufeng Advanced Materials Co., Ltd. Demonstrated wood-plastic composite technique at the high-tech section. The company's quality-control director, Ge Jin, the boards were widely accepted in Canada, Taiwan and the United States. "Last year, Taiwan imported around 500 metric tons of the boards from Jufeng, " he reported. The boards are also earth-friendly thanks to their recyclability and durability, making it an ideal material for outdoor furniture. Ge said the company's wood-plastic composite technique was developed by a Chinese material specialist in Canada.

The next SIFE show is slated for June 28 through July 1 this year. The second-half edition of the show has been held in August in the past, but the Shenzhen Furniture Trade Association said that it has pushed the date forward because suppliers are usually not available for the show during the industry's busy season, which begins in August. (April 2005)