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Redwood Furniture Challenged by Changing Fashion and Rising Costs

Manufacturers look to invest in brand development, new designs and the continuing popularity of high-end items as redwood furniture costs soar and consumers shun traditional ornate items in favour of simpler and less cluttered styles.

Photo: High-end redwood furniture: Still popular despite a drop in demand for cheaper items.
High-end redwood furniture: Still popular despite a drop in demand for cheaper items.
Photo: High-end redwood furniture: Still popular despite a drop in demand for cheaper items.
High-end redwood furniture: Still popular despite a drop in demand for cheaper items.

With imports of raw materials more than halving in 2015 and wood costs sky-rocketing, the redwood furniture sector is facing tough times. As a consequence, many exhibitors at the recent Guangzhou Art Fair were calling for greater efforts with regard to brand building, while also looking to expand the range of furniture on offer in order to woo young consumers.

According to a January-July 2015 report by China's Redwood Committee, 455,100 cubic metres of redwood were imported to the mainland over that period, a year-on-year decline of 62.37%. In total, the value of these imported items amounted to US$565 million (Rmb3.5 billion), down a depressing 65.99% year-on-year.

This sharp fall was blamed on a number of factors. Firstly, many raw material producing areas had halted or banned timber export, while market demand in China had also fallen. Tellingly, the sudden unpopularity of redwood furniture also saw the stands of many of its suppliers go largely unvisited this year.

Brand Building

According to the redwood market report, the sector's prosperity index dropped 7.5 points from 103.1 to 95.6 over the first half of 2015. This was a notably steeper fall than the 4.7 point drop seen in the first half of 2014. At the time, recessionary pressures forced a number of small and medium-sized redwood furniture companies out of business, although many of the larger brands emerged unscathed.

One such survivor was Dongyang-based Yuqiantang, a specialist in high-end Laos rosewood and lobular red sandalwood furniture. This year, it was debuting many of its new redwood furniture designs at the show.

Ma Haijun, the company's President, said that while the 2014-2015 recession had forced many redwood furniture companies out of business, Yuqiantang had maintained sales of Rmb200 million in 2015, matching the figures of the previous year. While crediting this success to the company's commitment to profit development, Ma did concede that overall profits were down. He did, however, stress that brand development, quality, integrity and service were the keys to success in the redwood sector.

Photo: Yuqiantang’s armchair set.
Yuqiantang's armchair set.
Photo: Yuqiantang’s armchair set.
Yuqiantang's armchair set.
Photo: Compound cabinets courtesy of Yuqiantang.
Compound cabinets courtesy of Yuqiantang.
Photo: Compound cabinets courtesy of Yuqiantang.
Compound cabinets courtesy of Yuqiantang.

Singling out a compound cabinet on his company's stand, Ma cited it as a prime example of his company's 'brand muscle'. The cabinet in question had been made using two different shades of timber – with the older, darker wood sourced from trees some 1,000 years old, while the lighter material was from a tree some 300 years younger. While compound cabinets are generally priced at around Rmb100,000, this premium piece retails for Rmb880,000.

Photo: An ornate redwood armchair on display.
An ornate redwood armchair on display.
Photo: An ornate redwood armchair on display.
An ornate redwood armchair on display.

According to Ma, most of the raw materials used to make redwood furniture need to be imported. This is especially true for lobular red sandalwood and rosewood, materials which have become increasingly scarce. Despite the slowdown in the market, the price of high-end redwood has actually gone up over recent years. In the case of compound cabinets, the cost of the required volume of Laos rosewood is now Rmb70,000, up from Rmb40,000 at the beginning of 2015. The price of wood logs has also soared, rising from about Rmb40,000 per ton in early 2015 to its current level of Rmb180,000.

In order to ensure quality, every item of Yuqiantang redwood furniture carries a digital anti-counterfeiting identifier. At present, while the company makes a substantial number of sales in the domestic market, it has also had considerable success in exporting to overseas Chinese buyers in Singapore and Canada.

As with Yuqiantang, Huabang, a Fujian redwood furniture firm, also attaches considerable importance to brand development. Currently, it mainly produces affordable mid-to-low range redwood items for the mass market.

According to Deng Yong, the company's Sales Manager, Huabang had been selling many of its redwood products at cost, inevitably sustaining losses as demand dropped throughout 2015. The company's primary goal last year was to clear its stock.

Although the company failed to make a profit in the period June-September 2015, Deng is convinced the market will rebound in 2016. He also believes that this recovery will be led by the more high-end products.

High-end Market Stability

According to Tuo Jiaru, in town to represent Guangzhou-based Dongyuan, buying high-end Burmese rosewood furniture is as much about making an investment as it is about utility and show. Fittingly then, his company was exhibiting a large Burmese rosewood board, priced at Rmb1.28 million. Highlighting its appeal, Tuo said the 3.5m long rosewood piece could be used as a console table top or processed into a variety of different furniture.

Ma also sees investment potential as bestowing a certain stability on the high-end redwood furniture market. He said Yuqiantang is now willing to buy back rosewood furniture it sold five years ago at the original selling price. If a piece is in mint condition, it will even pay the original sum plus five years interest. This could see furniture bought at Rmb1 million in 2011 now being bought back for Rmb1.5 million, representing a better return than many savings accounts. The deal is also worthwhile for the original vendor, with the item likely to triple in value over the next five years on account of the increasing scarcity of redwood.

Photo: Dongyuan’s impressive 2015 stand.
Dongyuan's impressive 2015 stand.
Photo: Dongyuan’s impressive 2015 stand.
Dongyuan's impressive 2015 stand.
Photo: Younger buyers admiring redwood furniture.
Younger buyers admiring redwood furniture.
Photo: Younger buyers admiring redwood furniture.
Younger buyers admiring redwood furniture.

Wu Chenxi, the Sales Manager of Zhejiang-based Jinhua Mingxitang Mahogany Furniture Co, also believes that the high end of the market remains relatively robust. She said, back in 2015, sales of her company's custom-made Ming-style furniture had not been affected by the slowdown in the market, with the company's turnover actually rising compared to the previous year.

Keeping it Simple

Overall, a number of exhibitors said that it was furniture with simple but tasteful designs that proved most popular at the show. This change in style was partly in order to appeal to more young people, many of whom are said to have developed a fondness for redwood furniture. This is a change away from the middle-aged and older consumers that were previously the sector's heartland.

Photo: Mingxitang’s Xuande tea table.
Mingxitang's Xuande tea table.
Photo: Mingxitang’s Xuande tea table.
Mingxitang's Xuande tea table.
Photo: Redwood furniture for the investment-minded.
Redwood furniture for the investment-minded.
Photo: Redwood furniture for the investment-minded.
Redwood furniture for the investment-minded.

Mingxitang was one of the companies looking to benefit from this change in emphasis. This year it was focussing on promoting its Tianshun Study, a piece taking its inspiration from the reign of the Emperor Ying, one of the stalwarts of the Ming Dynasty. Overall, the desk had a simple design, with its most striking feature being its slender, bamboo-like legs.

According to Wu, Mingxitang is now focussing on the production of more refined products, particularly desks, study room furniture and tea tables. Ming-style furniture, thanks to its simple uncluttered designs, is also now being particularly sought out by young buyers.

Photo: A jade carving on show.
A jade carving on show.
Photo: A jade carving on show.
A jade carving on show.

Confirming this change in preference, Ma Haijun said, not so long ago, some 70% of buyers preferred Qing-style furniture, with comparatively few interested in Ming style items. This, though, has now changed with more and more people preferring Ming simplicity to the more ornate Qing style.

Deng believes a factor in this change in preference has been the recent popularity of several TV costume dramas. The simple and elegant wooden furniture seen in such programmes has thus ousted leather items in terms of popularity.

Other exhibits to attract considerable visitor attention at the show included an 11-piece armchair set from Fujian's Mingshantang, exquisite root carvings from Jingdezhen's Yaoli, and several life-like animal decorations on show from Pakistan.

The Seventh Guangzhou Art Fair was held at China Import and Export Fair Pazhou Complex in Guangzhou from 25-28 December 2015.

Xing Bin, Special Correspondent, Guangzhou

Content provided by Picture: HKTDC Research
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