작성일자: 2013.4.1

작성자: 하노이 무역관 Ms Pham Hoang Anh (hoanganhphm@gmail.com)

1. Demand Trend

□ General Market Demand

 ○ According to Vietnam Trade Promotion Agency (June, 2012), the domestic produced interior products are preferred due to both their quality and affordable prices. Its market share over Vietnam’s total office chair demand ranges from 69% to 77% over the past few years. The graph below is the demand trend generated based on information gathered from www.trademap.org, www.viettrade.gov.vn and KOTRA Hanoi Survey:

     As one might have observed from the above graph, the demand for chair is generally inclining over time:

  - In 2005, the statistic was roughly US$1 million before climbing up to almost US$2.09 million by the end of 2006

  - The growth rates for 2007 and 2008 were at height as well. The recorded average rate was more than 50% per annum. The corresponding volumes peaked at US$2.95 million and US$5.91 million.

  - In 2009, as the economy grew into a stagnant stage, demand only grows at roughly 2% and then picked up again at an annual rate of 16.40%. The respective volumes for the year of 2010 and 2011 were US$7.27 million and US$9.20 million.

 ○ These ups and downs are rather explainable:

  - During the period from 2005 to 2007, Vietnam experienced high economic growth rates at more than 7% per annum. Numerous companies had been established during the time and purchases of new office equipment surged pulling up the sales of chairs.

  - Afterwards, as the economic crisis broke out mid-2008, many companies suffered and purchases of office chairs also become stagnant.

  - During the years of 2010 and 2011, even though Vietnam’s economy still resided in difficulties, sales of office chairs still grew due to the fact that the number of companies established each year still exceed those that are closed down.

 ○ Anyway, it is rather difficult to forecast trend of the coming years since Vietnamese economy has been still in the crisis. The number of new enterprises established in 2012 was 69,874 enterprises, decreasing 9.9% to the previous year. Meanwhile, the number of businesses closed rose by 0.5%, reaching approximately 54,000 enterprises. However, in 2012, the inflation has been curbed, the consumer price index rose 6.81%, lower than 2011 and achieved the growth target (less than 8%) and the economic growth rate is about 5.03%.

     Therefore, for the coming 3 years, sales of office chairs are expected to maintain or increase at a slight rate of 5 to 7% per annum.

□ Import Demand

 ○ As mentioned above, demand for office chairs are exploited by both domestic and foreign players. The below table addresses the corresponding volumes over the past years:

(Unit: Volume Unit = US$1000,  Share Unit = 1%)

Sources: www.viettrade.gov.vn

     As one might have observed from the above table, the demand for domestically produced products exceeds that of imports by a large amount. The reasons underlying are that:

  - Vietnam is capable of producing the chairs of its own. In fact, quality of the domestically produced products is so great that they even become one of the major exporting goods of the nation.

  - Import demand mostly derives from the fact that many foreign companies residing in Vietnam prefers products from abroad for their lower pricing and/ or their origins(especially if the products are from the countries of the foreign companies)

 ○ The below table addresses the imported chairs market volume and growth rate:

 ○ According to the above graph, the office chair market is generally growing at a diminishing rate, which fluctuates sharply during later period:

  - Prior to 2008, the average annual growth rate peaked at 82.24% and the import volume surge from US$649 thousand in 2006 to somewhere around US$1.5 million just 2 years later.

  - Afterwards, the average growth rate decline to 13.27% for the 3 years afterwards (From 2009 to 2011)

 ○ Experts forecast that in the coming years, due to the rise in domestic productions, import will only expand at averagely a 5 to 6% levels