As a result of the price war they have been constantly losing against competitors from China, Cebu furniture-makers have begun to shift export strategies from a focus on low-cost, generic products to one that targets the high-end market.
“The phenomenon is bound to happen,” according to Andrew James Masigan in his column “Numbers don’t lie” in the Manila Bulletin. For years, Chinese furniture makers have lorded it over the low cost, mass market and high volume arena. China, as everyone knows, has an unbeatable price advantage given its heavy state subsidies (which includes electric power) as well as rock-bottom minimum wages in rural areas.”
Thus, the Cebu furniture industry — the 50 or so manufacturers that have survived the China onslaught out of the estimated 200 that used to operate in the province — has decided to adopt a new tack in its bid for long-term growth.
These remaining furniture manufacturers have begun to brand as a seal of quality. They are going back to their core competence — good design and product innovation. They are making a comeback in the world market, with new collections of artisan pieces produced in low volumes. With such branding strategy, they are able to charge a premium price.
To be ready for “battle,” these companies are investing heavily in their production facilities to modernize their production and upgrade quality many notches higher.
The efforts to scale up has reaped initial success. Among the Cebu furniture brands that have successfully made it to premium markets abroad are Murillo Furniture, Dedon Furniture Kenneth Cobonpue, Locsin Furniture, and Anne Pamintuan Collections, all of which can be found in European showrooms.
Murillo Furniture, for instance, are sold in Denmark, Austria, Germany and the U.K, under the brand “Murillo,”,and counts Steffi Graf and Andre Agassi as customers.
“Still, much has to be done to ensure that its early success is no flash in the pan. For starters, our manufacturers need to modernize their plants to ensure consistency in product quality. They need to stay in the cutting edge of design by investing in research and development. They need to invest in brand promotions abroad,” Masigan avers.
Masigan recalls that in the 1930s, the Italian furniture industry went through a similar slump when besieged by competition from German and Sweidsh counterparts, forcing them to develop prestigious brands and to raise their quality levels. It was on this foundation that the design houses of Natuzzi, Casa Novalla and Calligaris emerged.
If Murillo, Locsin and Cobonpue and company would take the cue from history and take the right steps, it is not farfetched they would ultimately take their place among these esteemed Italian institutions.
To support the local furniture industry’s modernization moves, government is called upon to make it cheaper and easier to secure bank financing.