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Wednesday, June 12, 2024

E-commerce gives impetus to woodworking sector

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In the rapid development of e-commerce, online stores and factories are one of the solutions with which enterprises can cope with the prolonged Covid-19 pandemic while laying a foundation for digitalized business.

Nguyen Van Sang, director of VietProducts which owns the Furnist brand, says that strengthening e-commerce has recently helped the company offset the slumping sales at traditional stores. Since the Covid-19 outbreak, Furnist has seen its revenue surge by 40%-50% from e-commerce platforms, such as Lazada, Tiki, Shopee and Sen Do.

For the export segment, although traditional importers in the United States and Europe have repeatedly cut or halted their orders in the past four months, online firms in the two markets have raised their imports by 70%-100%. As the pandemic may linger, e-commerce will further support Furnist’s operations, according to the director.

To expand the export market, VietProducts has launched a retail store on Amazon. Unlike the wholesale business offered via Alibaba, VietProducts has met with difficulties in the retail channel, such as preparation and arrangement of logistic activities in the supply chain to ship products to the United States and other countries at reasonable transport time and costs. “However, once consumers find us, the chance for market expansion and brand recognition is sizeable,” says Sang. “E-commerce is not only a solution in the epidemic but also a business trend for the future, which needs much more investment from us.”

In recent times, many other handicraft and woodworking firms have been gearing their business towards the online channel. Some members of the Handicraft and Wood Industry Association of HCMC (HAWA) have piloted the combination of e-commerce with virtual reality and 3D technology to introduce their products to customers. Nguyen Quoc Khanh, chairman of HAWA, says Covid-19 has changed both consumption behaviors and working modes, causing pressure and challenges to enterprises and prompting them to improve design, production and commerce, in which digital transformation is an important key.

According to Tran Viet Tien, a member of the Standing Committee of HAWA, e-commerce has allowed foreign customers to explore production capability of partners via an independent audit unit although they have yet to visit Vietnam. “This is an evitable and long-term tendency for not only the woodworking sector but also other industries, given the risky outlook for the foreseeable future,” Tien says.

Nguyen Ngoc Dung, vice president of the Vietnam E-commerce Association (Vecom), also provides an exciting insight on woodworking firms. “They have invested heavily in technology, digital transformation, and other marketing solutions, such as design, content and client service,” Dung says. However, he also remarks that the number of domestic enterprises making such improvements remains modest.

As the biggest challenge of the industry involves bulky and full-package shipments, the online retail business requires producers to shift to simple designs so that customers can assemble by themselves. In addition, they should offer affordable prices to reach more low- or medium-income customers since most local firms have yet to find out solutions to speed up the sales of their complicated products.

Fairs and exhibitions go online

Earlier, fairs and exhibitions might give numerous business opportunities to woodworking firms. However, the ongoing virus crisis has ceased almost all trade fairs on a national and global scale. Many companies say they were ready to launch new designs and products and present new ideas to partners and customers, but they all failed in these efforts, due to the unexpected problem.

According to HAWA, many large customers in Japan, Europe and the United States take an interest in supplies outside China, and Vietnam is one of the most promising candidates. To seize this opportunity, the association intends to launch the HAWA Online Platform for Exhibition (HOPE) – the first of its kind in Vietnam. Nguyen Chanh Phuong, HAWA general secretary and vice chairman, says Vietnamese producers and exporters will be able to display their products, stores and factories online, visually and lively. Clients can inspect products inside out via all mobile devices, such as cell-phones, laptops and tablets, Phuong argues.

Though it has yet to be launched officially, HOPE has attracted around 50 manufacturers and exporters so far. Dinh Thi Huong Nga, director of Huong Nga Fine Arts, says her salespersons had to work very hard to maintain current customers and seek new ones during the first wave of the Covid-19 outbreak in the country. However, within less than a month since the introduction of the HOPE platform, the enterprise won two contracts from Germany and Britain. The foreign clients previously found Huong Nga Fine Arts products via its email and website. Furthermore, HOPE with improved images and content encouraged customers to place orders, Nga says.

Along with social apps, HOPE enables guests to interact and exchange directly with exhibitors around the clock. Companies will also reach statistics and analysis to experience and learn about customer needs, collect potential client data, study and figure out consumer trends. HAWA can turn HOPE into an effective trade promotion channel given its expertise in international fair and exhibition organization, its wide customer data, and partner and media agency network, Phuong argues.

Tran Viet Huan, vice chairman of CIO Vietnam, expects HOPE to become a platform for timely connection and trading needs given adverse impacts of Covid-19, and a solution to changes in marketing and business strategies in the digital economy, which helps enterprises make use of technology to seek new clients and grow up in the global market.

By Quoc Hung

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