In the first half of this year, a new wave of furniture price increases has been observed in major cities like Guangzhou and Shenzhen in the Pearl River Delta. This trend is driven by multiple factors, including rising raw material costs, reduced export tax rebates for furniture, and increased labor and sales expenses. The price hikes are particularly noticeable in furniture accessories, beds, sofas, and other key items. Compared to the same period last year, the cost of raw materials and labor has surged by 10% to 30%, leading to higher ex-factory prices across different furniture categories.
Many consumers have noticed that while store prices haven't changed significantly since July, promotional discounts have become less frequent. Industry insiders attribute these price fluctuations mainly to the rising costs of interior materials such as aluminum, stainless steel, paint, and adhesives.
According to manufacturers, the upward trend in furniture prices is becoming more pronounced. In Guangdong, most furniture products have experienced price increases, with wooden furniture seeing a rise of over 10% compared to the same period last year. Furniture manufacturers, who often feel the pressure more acutely than distributors, are expected to adjust their pricing again in September and October. Some companies plan to increase prices by 10% to 15% to offset rising raw material costs.
Wang Li, executive secretary general of the Dongguan Famous Furniture Club, noted that some smaller furniture companies have already shut down due to financial strain. Additionally, the implementation of the new "Labor Contract Law" at the start of this year has added to the burden, as companies now need to cover five social insurance benefits for employees. This has further squeezed profit margins, especially for small and medium-sized enterprises.
Industry experts believe that the tight supply of wood and continued price increases in the coming decade will shape the future of the furniture industry. Zhu Changling, deputy chairman of the China Furniture Association, stated, “With limited resources and rising material costs, the prices of household goods, including furniture, are expected to continue increasing.â€
On the retail side, major furniture stores have felt the impact of rising costs and are taking steps to manage these challenges. While factory prices have increased by 15% to 20%, retail prices in stores have remained relatively stable. To maintain customer interest, many stores have launched promotional campaigns during the peak season for home decoration and renovation. By combining sales strategies with marketing efforts, they aim to absorb the rising costs without significantly affecting consumer demand.
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