By Martina Kao    Photo：CANVA

Did You Know?
Vietnam is currently the largest furniture exporter in Southeast Asia and ranks first worldwide in wooden furniture exports. In 2024 alone, the country’s wood and wood product exports reached an impressive USD 15.7 billion, with furniture accounting for over one-third of the total. Its export markets span the globe, with the United States, Japan, South Korea, China, and the European Union remaining its long-term key customers.

How Strong Is Vietnam’s Furniture Industry?

Stepping into Vietnam’s furniture sector feels like encountering a “silent giant.” Across the country, there are more than 5,000 wood-processing and furniture manufacturing facilities. Large industrial zones can manage the entire process—from raw log cutting and panel processing to finished product packaging—while smaller factories focus on specific components or customized orders.

These operations are concentrated in provinces such as Binh Duong, Dong Nai, Ho Chi Minh City, and Quang Nam, with emerging clusters also forming in the central province of Binh Dinh. The industry supports between 600,000 and 800,000 workers, with over 600,000 directly engaged in furniture production, making it a vital pillar of Vietnam’s manufacturing sector. Remarkably, despite being dominated by small and medium-sized enterprises, the sector continues to attract steady foreign investment, bringing in advanced technologies and international orders that have propelled Vietnam into the top four global furniture exporters in just a few years.

Why Has Vietnam Become So Competitive?

Vietnam’s strength stems from a combination of cost advantages, supply chain maturity, and trade policy benefits. The country’s relatively low labor costs give it a natural edge in large-scale furniture manufacturing. In recent years, proactive government efforts to open up investment and improve infrastructure have further facilitated foreign capital inflows and factory expansion.

Crucially, Vietnam’s competitiveness is no longer just about being “low-cost.” The nation has developed an increasingly sophisticated supply chain that integrates local forestry resources with imported timber to meet diverse quality standards required by international markets. Additionally, free trade agreements with the EU and the UK have significantly reduced export tariffs, allowing Vietnamese furniture to enter Europe with near-zero duties. Collectively, these advantages have positioned Vietnam not merely as a “China alternative” but as a truly competitive and rapidly rising global furniture manufacturing hub.

Where Does the Furniture Go?

The United States has long been Vietnam’s single largest export market, consistently absorbing more than half of its furniture shipments in recent years. From living room and bedroom sets to office furniture, U.S. importers view Vietnam as a major sourcing base.

Japan, South Korea, and China are also significant buyers, together accounting for roughly 30–40% of Vietnam’s furniture exports. Notably, Japan’s stringent quality and environmental standards have driven Vietnamese manufacturers to continually improve design and materials.

While the EU’s share remains smaller in absolute terms, its demand has surged thanks to tariff reductions under the EU–Vietnam Free Trade Agreement (EVFTA), with countries like Germany and Spain showing particularly strong growth. Beyond these traditional markets, emerging regions such as the Middle East, India, and South America are also beginning to generate demand—especially for high-end residential and hospitality projects—offering promising “blue ocean” opportunities for future expansion.

The 2025 Wildcard: U.S. Tariff Shock

Vietnam’s furniture export outlook in 2025 faces significant uncertainty due to a sudden shift in U.S. tariff policy. Initially, the U.S. announced plans to impose tariffs of up to 46% on Vietnamese products, sparking widespread alarm among Vietnamese exporters, as the U.S. accounts for more than half of their orders. Subsequent negotiations lowered the general rate to 20%, but shipments routed through third countries remain subject to the higher 40% tariff, creating a substantial ongoing burden.

What does this mean for the market? In simple terms, Vietnam’s previous pricing advantage has been cut nearly in half, making its products far less attractive to buyers. Multiple research agencies estimate that export volumes could drop by 30–60%, with total export value potentially shrinking by 10–20%, equivalent to several billion dollars in losses. Beyond pricing, this shift may also redirect global sourcing patterns and reorder supply chains.

New Directions for Export Strategy

While the U.S. market faces headwinds, Asia presents new opportunities. Data from Q1 2025 shows notable growth in exports to Japan, up by more than 20%, and steady gains in South Korea. China remains among the top destinations, albeit with a slight decline. Meanwhile, Europe’s demand is accelerating, driven by the EVFTA tariff advantage, with Spain and Germany emerging as particularly strong growth markets.

Newer markets such as the Middle East and India, though still in the early stages, are increasingly attractive due to rising demand for luxury residential and hotel projects. These regions are seen as strategic “early entry” targets for forward-looking exporters.

Capturing Opportunities While Managing Risks

Vietnam’s wooden furniture exports have experienced unprecedented growth, but global trade rules, tariff shifts, and logistics challenges are evolving just as rapidly.

For exporters, securing supply is only the first step. The real challenge lies in balancing compliance, safety, and cost—while simultaneously seizing opportunities in emerging markets.

If your team is considering sourcing furniture from Vietnam or reassessing transportation strategies for different markets, TGL can provide end-to-end consulting and execution—from early-stage planning and documentation compliance to packaging and multimodal transport solutions.
Email: quote@tgl-group.net

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