Innovation and Eco-Awareness Drive Changes in China's Furniture Industry

Producers position for upmarket gains in a health- and eco-conscious world

Furniture quality has entered the spotlight in recent years as consumers complain about excessive formaldehyde, chemical odors, and other problems. The trend towards greener living has further put producers under pressure to make their products healthier for both users and the environment.

Under strict rules on wood and wooden products to be enacted by the European Union (EU) on March 3, 2013, all manufacturers who export wood products to the EU need to get Forest Stewardship Council (FSC) certification that the timber used by manufacturers is legally produced from forest and that the raw materials meet eco-friendly requirements. For China's furniture exporters, meeting the new rules will mean higher costs, potentially slamming the door to the important EU market (the U.S. and EU account for 53.9% of China's total furniture exports).

Focus on Innovation and Original Furniture
Founded in 1993, Kangbao Furniture Co., Ltd. is one of the top furniture makers in China. The company, based in the furniture town of Longjiang in Foshan, Guangdong Province, is a modern furniture manufacturer with a strong team of industry professionals and advanced production equipment. The company specializes in the production of all kinds of high-quality leather sofas, modern glass metal furniture, and wood furniture. Its revenue in 2012 totaled US$11.98 million, of which, US$4.79 million came from exports.

Over the past 20 years, Kangbao has focused on innovation and the development of original furniture. The company operates five production lines, each with a monthly capacity of 20,000 sofa sets. It also has stores in more than 150 cities in China. The company sells its products to more than 180 countries and regions, including Europe, Canada, the U.S., Middle East, Japan, Singapore and other Southeast Asian nations. It also has earned a high reputation among national leaders, business celebrities, movie and sports stars, and professionals in the furniture industry.

Kangbao Furniture sells its products under the "DIFIDEN," "VV Sofa" and "ABAODIS Sofa" brands. "VV sofa" is a trendsetter in the segment. The "DIFIDEN" line, launched in 2011, highlights post-modern luxury combining Chinese and Western elements. High-quality raw materials and unique design go into every "DIFIDEN" product, which undergoes a more than 100-step manufacturing process and strict quality control check before delivery.

Believing that top quality and excellent service are the best way to win customers, Kangbao strictly manages product quality in line with international quality standards. In 1999, it became the first company in the domestic industry to obtain the ISO9002 International Quality Management System Certification. And it followed up with GMC International Management System Authentication in 2000. The company has been awarded as a top-ten Chinese sofa brand and top-ten modern brand. It also won a gold prize as an innovative Chinese furniture enterprise.

Kangbao is dedicated to building on this strong foundation by developing more distinctive high-quality furniture items and advancing as the top sofa brand in China.

Living RoomFurniture Leader
Zuoyou Furniture was founded in 1986 in Shenzhen, China. In 2012, the company began planning a new 500,000-square-meter factory in Boluo to further build on its position as one of the top-five sofa factories in China. The company is an experienced integrated furniture supplier of living room, offering high-quality leather and fabric sofas, massage sofas, recliner sofas, coffee tables, and TV stands. Style-wise, the company's line ranges from contemporary to classical and traditional.

Cooperating with an Italian R&D center, Zuoyou mass produces sofas made with high-quality leather and fabric and designs tailored to Chinese families. The company tries to grasp the market trends, providing perfect service and cooperation mechanism. Zuoyou has different series of products, including modern leather sofas, modern fabric sofas, Rafael-Italian, classic Polish, recliner sofas, massage sofas, and panel furniture.

Zuoyou has three production bases with a total production area of 120,000 square meters. The company's 2,000 workers have an average of five years of upholstery experience and can turn out up to 500 sofa sets a day, or enough to fill 600 40-foot containers per month. Zuoyou operates over 1,000 gallery shops in China, covering all major markets. It also exports to Europe, America, the Middle East, and Asia-Pacific Rim markets.

Zuoyou is perpetually adding to its line of European and traditional furniture. It became one of the first ISO9002-certified sofa makers in China in 1997. And in 2001 it obtained ISO9001 certification.

"The mission of Zuoyou is to bring our sofas to every family so domestic consumers can enjoy high-quality sofas," said Hong Xiaoshan, vice president of Zuoyou.

In order to guarantee that its products are pollution-free from source, Zuoyou adopts government-approved eco-friendly raw materials. Moreover, it adheres to a design concept aimed at minimizing material waste. Zuoyou uses advanced techniques and machines to greatly improve working efficiency.

Zuoyou perfectly interprets the oriental charm of modern Chinese living rooms through its creative, trend-setting designs.

Positioning in the middle market, Zuoyou is building its brand by always putting customer interests first from product R&D to manufacturing and marketing. Zuoyou also has honed its image through careful selection of retailers, cooperation mechanisms, and an unswerving commitment to customer satisfaction and market acceptance.

Leading the Industry Higher
Lacquer Craft is the largest furniture manufacturing group in the Asia-Pacific region. In 1992, the Taiwanese-invested group set up a factory in Dalingshan, Dongguan, mainly producing and selling wood furniture for dining rooms, bedrooms and living rooms. The acquisition of Universal Furniture, the second largest furniture retailer in the U.S., has positioned Lacquer as the first Chinese-based furniture company with own brand sales in the U.S.

Investment in a new plant in Jiaxing, Zhejiang, has boosted the company's annual production value past US$200 million. The company exports 14,000 containers of products each year, representing an export value of more than US$50 million.

Lacquer Craft manufactures a variety of high quality household furniture under the "Universal Furniture," "Legacy Classic," and "Craftmaster" brands. These items range from medium to high price and are marketed through more than 3,000 wholesalers and retailers around the world, including the U.S. and Canada.

Lacquer Craft integrates the operations of American wholesalers and Chinese manufacturers, drawing on China's cost-effective production advantage to expand its brand influence in the U.S. market. The company has also reduced logistics costs and enhanced delivery capacity to enable delivery of different furniture series in mixed shipments to clients.

Yu Xida, the brand director at Lacquer Craft, is optimistic that the furniture market will steadily improve. "We need to set practical goals and take measures. But whatever the trend, we remain optimistic about the Chinese market."

Yu stresses the importance of continually adapting to the market and shifting gears during downturns. Distributors need to stimulate the market and promote sales, while producers should maintain their market edge through ongoing investment, brand positioning and style orientation. Chinese producers also should replace cost-cutting with more a marketing-based competition model, as Taiwanese companies are doing in response to the changing industry landscape, Yu says. These are all directions that Lacquer Craft is planning for the road ahead.

Building a Name on Quality
Taiwan's Top Trade Wood (Suzhou) Co., Ltd. is a member of the Chinese Furniture Association, with more than 30 years of experience in designing, manufacturing, and marketing furniture. Australian natural wood accounts for the bulk of the material used by the company. Its "Shaker" brand is well-known for its modern style, high-quality wood, advanced production techniques, process maturity, and strict quality management.

Taiwan's Top Trade Wood focuses mainly on solid wood furniture, such as bedroom, living room, study, and youth furniture, dinner tables and chairs, leather wood sofas, and solid wood and fabric sofas. The company also produces an elegant line of multifunctional furniture. The company has also earned numerous government and industry certifications for production and environmental protection.

Taiwan's Top Trade Wood was among the first Taiwanese furniture manufacturers to invest in the mainland when it arrived in 1996. The Suzhou-based company exports to Europe, America, and Japan. In China, the company focuses on the mid-level and high-end markets. Over the past decade, it has established a national sales network to bring the Shaker brand to customers throughout China.

The main raw material used by the company is high-quality Australian ash. This type of wood is lightweight and has a light hue that can work well with most colors and coating materials. The wood also has a beautiful texture and high stability, making it easy to cut and shape. As a result, ash is the best material for producing high-grade wooden products, particularly high-wear items such as stairs, floors, tables, and countertops. Top Trade Wood uses advanced drying techniques to further improve the stability of the wood and ensure the highest quality of its Shaker line.

It is estimated that people spend over a third of their lifetime at home. No wonder then that people pay more attention to the raw materials and health effects of the furniture in their homes. Furniture will also have to heed the growing call for environmental protection, tasking producers to eliminate harmful materials from the manufacturing process. The companies that embrace these trends are the ones that will grow and prosper in the years ahead.