Supply chain interrupted, VN woodwork processors go online

E-commerce is one of the best solutions for woodwork enterprises to cope with the Covid-19 epidemic, which has led to a sharp fall in demand.

The Vietnam 2020 International Trade Fair of Furniture and Handicrafts Exports, the largest woodwork trade fair in Vietnam and ASEAN, has been canceled because of Covid-19, according to Handicraft and Wood Industry Association of HCM City (Hawa).

Seventy six percent of enterprises asked to cancel or postpone the trade fair because the majority of their partners from the US, Europe and Japan have canceled their trips to Vietnam.

The cancellation of the fair is a huge loss for businesses in the industry as they lost an opportunity to seek contracts.

In fact, the demand for wooden furniture still exists. Covid-19 has made the Chinese woodwork industry stagnant. As most factories cannot resume production or maintain production at a moderate level, the supply chain has been interrupted.

As China provides $54 billion worth of woodwork products a year, the interruption in supply from this source has created a big hole that needs to be filled.

According to Hawa, big clients from the US, Europe, Australia and Japan have shown more interest in non-Chinese markets.

In such conditions, Southeast Asian countries have emerged as the ideal alternative markets and Vietnam proves to be the best candidate in the region. The FTAs such as EVFTA and CPTPP are believed to bring competitive edge to Vietnamese enterprises.

Vietnamese enterprises need to connect with clients.

Nha Xinh, a well-known furniture brand and some of Hawa’s member companies, have tried the e-commerce model utilizing VR (Virtual Reality) technology to introduce their products to clients.

The website set up by enterprises is just like a booth at a trade fair. Foreign buyers just need to use computers to see all the models the manufacturers offer and ‘visit’ factories on 3D space.

According to Tran Viet Tien from Hawa, through the e-commerce platform, the two sides can know each other's products, prices and production capacities.

Foreign customers who cannot go to Vietnam can survey the production capacity of the partners through independent auditors.

“This is a long-term way not only for woodwork processors, but also for enterprises in other business fields to follow," Tien said.

Traditional business model has shown many problems as they require high operation cost, and is less dynamic. The changes in people’s shopping habits force manufacturers to change their methods of approaching clients. Many manufacturers now sell products on Amazon.