Foreign home interior brands and designers are present in force and dominating the increasingly affluent Vietnamese market. Brands like Cassina, Badari Lighting, Cantori, Diemme Cucine, Formitalia, and Versace Home have entered the high-end interior market in recent years.
According to the Vietnam Chamber of Commerce and Industry (VCCI), some 80 percent of luxury woodwork and interior decoration items is imported from Europe, with local players making up the small remaining portion. The market is valued at $2.5 billion.
Ly Qui Trung, general director of AKA Furniture Group, said the expansion of the “middle and affluent class” has boosted demand for luxury interior items.
“It is no wonder that many high-end international interior brands have started rushing into the Vietnamese market.”
The middle and affluent class, categorized as those earning $714 a month or more, would double to 33 million, about a third of the population, between 2014 and 2020, the Nikkei Asian Review reported recently citing a study by the Boston Consulting Group.
Market research firm Nielsen estimates the number of middle and affluent class Vietnamese to reach 44 million by 2020 and 95 million by 2030.
Paolo Lemma, Italian trade commissioner to Vietnam, believes there will be higher demand for interior design items in future due to the booming real estate market.
According to the HCMC Handicraft and Wood Industry Association (HAWA), woodwork furniture consumption last year was estimated at over $3.2 billion and that number is expected to reach $4 billion this year.
Huynh Van Hanh, vice chairman of HAWA, said the industry’s average growth rate has been 8 percent in the last seven years, and his association encouraged domestic manufactures to enter this growing market.
Trung said his company would seek to tap the growing high-end segment in future, and expected fierce competition between domestic and foreign brands.
Last year Vietnam exported $8 billion worth of wood and forestry products and has a target of $9 billion this year.