Wood enterprises exporting perfunctorily due to dropping orders

VCN - Declining orders, cancellations and delays in receiving goods are the main difficulties that Vietnamese wood furniture exporters are facing due to the impact of the Covid-19 pandemic and the Russia-Ukraine war which led to severe inflation in import markets.
Enterprises hope to approach new customers at Vifa-Expo. Photo: N.H
Enterprises hope to approach new customers at Vifa-Expo. Photo: N.H

Speaking at a press conference to introduce the Vietnam International Furniture and Home Accessories Fair (Vifa-Expo 2022) held by Hawa on August 25, Mr. Tran Hoai Huu, Director of Gia Nhien Company, specializing in handicrafts, said the company's decline in orders is increasing in recent times.

In particular, during the pandemic, the number of orders decreased by 30%, when the war between Russia and Ukraine happened, the inflation in the US and EU countries increased, orders decreased by 70%, leading to a decrease of 70% resulting in difficulties in business production activities at the enterprise.

Hence, enterprises suffered financial and economic weakness, affecting production and business. For almost three years now, there were no new customers. Mr. Huu expected Vifa-Expo 2022 to be an opportunity to open up after the pandemic to find and approach new customers.

Mr. Tran Van Quang, Production Director of Khanh Xuong Co., Ltd. also said that several waves of difficulties caused the company's order volume to plummet by 60-70%. Therefore, the company only produces about 1/5 -1/7 compared to before, the export volume was only 15 out of 17 containers per month compared to 100 containers per month like before.

In a survey conducted by the Handicraft and Woodworking Association of HCM City (Hawa) on 52 member enterprises in July 2022, it was found that up to 47 businesses had suffered a decrease in orders. Notably, there are 14 businesses that witnessed a decrease of 70-90% in orders.

In terms of revenue, there are 32 enterprises whose revenue in the first six months of 2022 decreased compared to the same period in 2021. There were six enterprises that saw a sharp decrease of 70-90% in revenue.

According to businesses participating in the survey, many customers temporarily stopped importing orders placed from the previous season, even though the order was already in the production plan. Notably, customers often cancel without prior preparation. There are cases where customers make excuses that the goods are full, cannot be sold, and are deposited at the warehouse waiting for the release date.

Some customers even delay receiving goods into their warehouses by up to four months. Some customers only pay a deposit and do not pay more, asking the factory to sell and liquidate domestically.

According to businesses, most orders decrease partly because customers misjudge the market, so in 2021-2022, they order more than the market demand, along with inflation, war, and freight thus the customer cannot sell.

Faced with such a difficult situation, businesses all want to have the opportunity to reach out to export customers and connect with other companies. At the same time, they wish to receive support to enhance advertising, brand images for processing enterprises from large to small to open more markets.

By Nguyễn Hiền/Thanh Thuy

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