China: Data and the industry agree its furniture presence is in steep decline

There was a moment in time — years actually — when sourcing furniture was easy. No matter what you needed — be it upholstery, solid wood case goods, metal, laminate — it could all be sourced from China.

But then came a series of hurdles. First were duties on bedroom furniture. Then came Trump-era tariffs and worsening political tension with the U.S.

Now, China’s trajectory as a furniture exporter to the U.S. is in a clear, substantial decline, and that’s backed up by both import data and industry commentary.

On the data side, China’s furniture exports to the U.S. are down nearly 35% from 2019. That’s in sharp contrast to its two closest rivals, Vietnam and Mexico, which sit at 40.6% and 65.2% growth, respectively. China exported less than $6 billion in furniture to the U.S. in 2023, a far cry from the $9 billion exported in 2019.

The industry is aligned regarding China’s decline, and it’s perhaps more of an alignment than on any other country. Not one supplier or expert interviewed for this report was optimistic about the former export giant. Most companies seem to have either fully transitioned out of China or are in the process of doing so.

“I think everybody is in agreement: China is in decline and will never recover,” said Ken Shanks, president of sourcing expertise provider Outlook International. “And it’s not just because of the Trump tariffs. The demographics are bad, and they are aging very fast. It’s a labor-intensive industry. I see them lasting for a while longer, but it’ll eventually run its course.”

“To sum it up, I think years ago everybody rushed to China, but now that 25% tariff really adds up,” said Matt Sorensen, vice president of sales at Classic Home. “Some people that are still there do a tariff share, but others don’t. And for others, the U.S.-China relationship adds a strain. Lots of dealers are uncomfortable with that. People are also fearful of another tariff getting added when they have stuff on the water.”

Making an exit

Martin Svensson is one supplier to have recently completed its total exit from the country.

“We had been sourcing from China, Vietnam and India,” said Pat Watson, Martin Svensson’s vice president of product development. “But China ended last year. The only things we were getting there were mirrors anyway. Because of the dynamics of importing just mirrors from China, it was difficult.

“It takes a lot of mirrors to fill a container, so we were having to buy a lot of inventory. When business is great, that’s no problem. But when it’s tough, it’s hard. We can now get the same mirrors from Vietnam.”

Upholstery and case goods supplier Flexsteel said it will soon be out of China completely.

“About 50% of our product comes from Asia, largely Vietnam, with just some component manufacturing coming out of China,” said David Crimmins, vice president of sales. “But we’re bringing that out (of China) and into Vietnam. There’s a need to derisk from China. The more we can do that, the better.”

Upper-mid to upper-end supplier Martin Furniture used to have a big presence in China. Now, it only sources from Vietnam and Malaysia.

“I don’t know why anybody would be going back there,” said Pat Hayes, vice president of product development. “What originally pushed people out were the duties on bedroom furniture. Now, with tariffs and if Trump gets back in, it could get even worse for China.

“Many factories there also have either closed or moved over to domestic-only. A lot were forced to close as cities grew around them and the authorities wanted to clean up as they set up residential.”

Still an up side

But despite much of the industry turning sour toward the country, its upside isn’t gone. It can still perhaps “do it all” better than anywhere else.

Patrick Seely, design director for the ready-to-assemble e-commerce supplier Walker Edison, expressed it well: “So if you’re not an organization that can split its focus across a dozen countries, or wait 10 years for domestic manufacturing to gear up, where should you go?

“Well, there’s still China. Not in the way there was before but an opportunity nevertheless. The exodus of Western purchasing has pushed many Chinese factories into one of two groups: The direct importers and the desperate.

“Those with a bit of cash and a little marketing savvy now sell their products direct (usually without wholesale markup) on Amazon, Wayfair, Temu, Shein, etc., or have started their own D2C brands,” Seely continued. “Those without such interests have become increasingly desperate for customers. The irony is that the reason these factories don’t have marketing talent is that they have been putting all their resources into manufacturing good product.”

Seely pointed out an opportunity in the current situation: negotiation with the desperate.

“It may take some hunting and more than a little risk, but there are factories in China today that will offer good quality product at prices and MOQs lower than perhaps ever, just to keep their lights on.”

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