Vietnam COVID-19 blockade is extended again! A large number of furniture orders returned to China
September 24, 2021 source: Network
It is reported that Vietnam’s blockade originally scheduled to end on September 15 has been extended to the end of September. Many furniture companies said that orders would return to China.
Vietnam began to experience a surge in economic and manufacturing output a few years ago, mainly due to the trade war between the trump administration and China, and the United States turned to importing from Vietnam.
By the end of 2020, Vietnam surpassed China to become the largest overseas supplier of veneer and plywood in the United States. In May this year, Vietnam overtook China to become the largest furniture exporter in the U.S. market.
However, the outbreak of the epidemic has ravaged the country since June. The government ordered the factory to shut down and allowed the workers to restart only when they implemented the “three in place” policy. Since then, Vietnam’s furniture production has decreased significantly.
RH, a high-end furniture chain, hopes that its Vietnamese factory will restart in October and return to full production by the end of this year. The slowdown in manufacturing, the extension of transportation time and the increase in transportation costs led RH to launch its latest furniture series late next spring.
The closure and production reduction of Vietnamese factories led to a large number of furniture importers planning to transfer furniture orders to China, and many Vietnamese furniture factory expansion plans were shelved.
Lovesac, a furniture company, said that imports from China will face high tariffs, but it still transferred furniture orders from Vietnam to China to minimize the risk. “Goods to sell” is more important than tariffs.
Hooker furniture company has become very cautious about its expansion in Vietnam. At the financial report teleconference in September, it said that the shutdown of factories in Vietnam is the fuse for its major supply problems, and some furniture orders have been transferred to China.
Jeremy Hoff, CEO of Hooke furniture, said in a conference call on September 9: “in fact, we have begun to produce in different regions, such as Thailand. To be honest, we can even go back to China if necessary.”
Hooke’s executives predict that the sales of Hooke’s home meridian international brand will fall by 30% this quarter due to the shutdown in Vietnam.
Vietnam blockade extended! A large number of furniture orders returned to China
Vietnam furniture factory production stalled
In this epidemic, the stability of production in China’s market has won a lot of appreciation. Willy Shih, a professor of management at Harvard University, said that some companies began moving back to China as early as last year.
“This has happened for a long time,” he wrote in an email. “The key is that if you want reliable and stable manufacturing plants, China is often the most suitable place.”
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