Historically, manufacturing furniture for exports had remained firmly in the hands of the industrialized nations. Furniture-making by nature is one of the very basic and labour-intensive manufacturing segments that have existed in all cultures as a domestic and household craft. Consequently, the entry barrier to start this industry is fairly low. More recently, many developing economies have followed the previous paths and phases of the more developed economies in developing their furniture for exports. Countries like China, Indonesia, Vietnam, Malaysia, Mexico and Brazil have gradually industrialized and expanded their furniture industry’s operational scales better suited for the main markets, i.e. the United States and the European Union.
On the buyer’s side, there are globally operating furniture retail chains and buying groups representing the collective interests of nationally important furniture dealers. Both have stayed in the vanguard for changes in the international market. In fact, these have been important drivers in opening up furniture trade for more trade. They have realized new cost-slashing and earning opportunities in outsourcing labor-intensive manufacturing to the developing countries. As a response, there is an abundant stock of new manufacturing capacity that has been established with the help of government support and tax breaks. Not all of these are, however, profitable or competitive today.
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