Topic making the business plan for exporting wooden furniture products to thejapanese market

3.2 Japan tends to increase imports of wooden furniture instead of domestic production.... Export status of wooden furniture in Vietnam Vietnam's wooden furniture exports have been a sig

NATIONAL ECONOMICS UNIVERSITY ADVANCED EDUCATION PROGRAM

Member: Doãn Khánh Linh : 11202112

Đinh Ngọc Huyền : 11201830Trần Thu Phương : 11203241

Lê Thị Minh Hiền : 11201416

Hà Thái Thúy Nga : 11202699

Hanoi, 04/2023

TABLE OF CONTENT

TABLE OF CONTENT

I Introduce Company

1 Company name: Woodie

2 Company Introduction

3 Products

4 Operation Motto

5 Distribution Channels

6 Objective

7 Expected export activities

8 Contact Info

II Market Research

1 Export status of wooden furniture in Vietnam

2 Analyze the characteristics of the Japanese market

3 Reasons for choosing to export wooden furniture to the Japanese market

3.1 Japan is a market with large consumption of wooden furniture

3.2 Japan tends to increase imports of wooden furniture instead of domestic production

3.3 Japanese furniture-loving culture

3.4 The Japanese market receives industrial wood products from both small brands

3.5 Preferential import policy for wooden furniture exported from Vietnam to Japan

4 Evaluating the size and potential of the wooden furniture market in Japan

5 Japanese customer needs, preferences, and behavior

6 Analyzing key competitors and market trends (including their strengths, weaknesses, and strategies)

6.1 Direct Competitor

6.2 Potential Rivals

III Business Strategy

1 The process of exporting goods

2 Shipping methods

2.1 Shipping time for Industrial Furniture by sea from Vietnam to Japan

2.2 Shipping time for Industrial Furniture by air from Vietnam to Japan

3 Financial Projections

3.1 Product price

3.2 Expected income distribution of the company's personnel

3.3 Wood products in the first 4 months of 2023

3.4 Report of Woodie's business results in the first quarter of 2023

4 Risks and Mitigation

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4.1 Some of the risks that our company may face while exporting wooden

furniture to Japan

4.2 To mitigate these risks, the company can take several steps such as

5 Legal and Regulatory Considerations

6 Marketing campaign

6.1 Product Strategy

6.1.1 Brand

6.1.2 Decisions Related to product quality

6.1.3 Product support services

6.2 Pricing Strategy

6.3 Distribution Strategy

6.4 Sales promotion strategy

6.4.1 Advertising Program

6.4.2 Promotions

6.4.3 Public Relations

IV Setting campaign goals

1 Profit rate

2 The goal of the company's position

I Introduce the company

1 Company name: Woodie

2 Company Introduction

Woodie is a company established 15 years, specializing in providing woodenfurniture products After researching the domestic and foreign markets, Woodiedecided to export the company's products to the Japanese market With a team ofexperienced staff in the manufacturing field, we are committed to providing ourcustomers with quality and unique products

3 Products

We specialize in manufacturing wooden furniture products such as tables andchairs, beds, cabinets, shelves, and decorations which are delicately crafted and havediverse design styles, from traditional to modern, suitable to the needs and tastes ofJapanese customers

4 Operation motto

Product quality and customer satisfaction are our top priorities We arecommitted to using natural wood materials, protecting the environment, and ensuringthe production process meets international standards

7 Expected export activities

- Item: wooden furniture

- Market: Japan

- Time: Starting export procedures and preparing relevant documents from May

1, 2023

II Market Research

1 Export status of wooden furniture in Vietnam

Vietnam's wooden furniture exports have been a significant part of the country'swood and wood products industry In recent years, Vietnam has become a major player

in the global wooden furniture market, with exports increasing significantly However,the wood and furniture exports of Vietnam have been declining in recent months, with

a 34.8% drop in January and February 2023 It is unclear what the specific exportstatus of wooden furniture in Vietnam will be in 2023, but the Vietnamese governmentaims to increase the country's timber and wood product exports to $20 billion by 2025

2 Analyze the characteristics of the Japanese market

- Japan is an island nation located in the east of Asia and is the third largesteconomy in the world, and a country with close ties in economic and security relationswith Vietnam Japanese consumers have a high average income and tend to shop forhigh-quality and unique products They are willing to pay high prices for products thatmeet these requirements

- Japan has a diverse industry with many different manufacturing sectors fromautomobiles, electronics, machinery, home appliances, and toys, to other industrialproducts Japanese industrial products are renowned for their high quality, advanceddesign, and durability

- Consignments violating quality regulations will be destroyed or returned, andJapanese customs will increase the frequency and extent of goods inspection in thefollowing times, which can cause many inconveniences and increase costs forexporters

- Due to the high standard of living, most Japanese consumers place highdemands on quality, durability, reliability, and convenience when shopping For the

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Japanese market, the after-sales service must be good, when damaged, the problemneeds to be quickly fixed; if the products have scratches or dents during transportation,Vietnamese businesses should remove them immediately and destroy them rather thanlowering the price

- The Japanese market is a very competitive market with the participation ofmany domestic and foreign companies Products must meet high-quality standards and

be competitively priced to compete in this market

The domestic and foreign companies competing in the wood market in Japaninclude companies such as Sumitomo Forestry, Nippon Paper Industries, Oji HoldingsCorporation, Daiken Corporation, Kokuyo Furniture, Okamura Corporation, and manyothers These companies compete with each other in different sectors such as paperproduction, furniture manufacturing, and construction In addition, foreign companiesalso participate in the Japanese wood market such as IKEA

- The Japanese market demands respect for culture and tradition Therefore,products and services must be designed and manufactured with respect andunderstanding of Japanese culture and traditions "Consumptive entry" is anindispensable principle when approaching any market

3 Reasons for choosing to export wooden furniture to the Japanese market

3.1 Japan is a market with large consumption of wooden furniture

- The potential for exporting wood and wood products, especially industrialwood furniture, to Japan, is huge because Japan is a large consumer market with apopulation of nearly 126 million people and a per capita income is about 43,000USD/person

- Wooden furniture is one of the Japanese items that increase in demand.According to statistics from Japan Customs, Japan's wooden furniture imports in thefirst eight months of 2021 reached 540 thousand tons, worth 173.8 billion yen(equivalent to 1.55 billion USD), an increase of 9.7% in volume and 12.7% in valueover the same period in 2020 Led by export turnover of living room furniture anddining room reached 91.98 million USD, up 6.9% over the same period in 2020;followed by wooden frame chairs with 81.3 million USD, up 7.2%; bedroom furniturereached 63.9 million USD, down 16.2%

3.2 Japan tends to increase imports of wooden furniture instead of domestic production

- The current trend in the Japanese furniture market is to limit domesticproduction and increase imports, especially from ASEAN countries

- In the structure of wooden furniture, Japan strongly increased imports of

office furniture and kitchen furniture in the first eight months of 2021 Due to theincreasing demand at home during the time of isolation, Japanese consumers tend tobuy more office furniture products for home use and renovate the kitchen interiorspace

- In addition, thanks to the need to prepare to repair and replace interiorproducts in restaurants, hotels, etc., has increased sharply because Japan has justopened to tourism after Covid

3.3 Japanese furniture-loving culture

- Japanese consumers prefer engineered wood products that are made to looklike nature A coating on wood products that looks real, and close to nature is thechoice of a group of Japanese consumers, different from the "real" wood in the past.Making these "fake" products is also cost-effective for woodworking businesses

- The Japanese also love to use wood materials to make furniture because thismaterial gives them a feeling of being closer to the natural world The appearance ofnatural wood materials makes the space harmonious The wooden structure houses,wooden furniture, etc are the highlights of the Japanese house structure and makeJapanese architecture unmistakable with the architectural styles of other countries

- Besides, Japan is a country with frequent earthquakes, and the use of woodenmaterials to build houses is very safe, helping people easily cope with bad situationsthat may occur Therefore, the Japanese often prioritize wood materials for housefoundations and furniture

3.4 The Japanese market receives industrial wood products from both small brands

- The taste of buying wooden furniture of the Japanese is focused onconvenience and suitability, rather than paying attention to brands like clothes andshoes This is an opportunity for a small brand to export this item to increase sales inJapan It is important to take advantage of this favorable opportunity to be flexible indesign and to quickly grasp the needs of the Japanese market

- Therefore, industrial wood products are made to resemble the nature of smallbrands As long as they have diverse designs and are responsive to needs, they will beable to penetrate the Japanese market

3.5 Preferential import policy for wooden furniture exported from Vietnam to Japan

- Businesses can take advantage of commitments in Free Trade Agreements(FTAs) to which Vietnam and Japan are both members, such as the Vietnam - JapanEconomic Partnership Agreement (VJEPA), the ASEAN-Japan Comprehensive

4 Evaluating the size and potential of the wooden furniture market in Japan

- The Japanese furniture market is predicted to expand rapidly during theforecast period Rapid disposable income, increased residential and commercial space,and rapid urbanization are some of the primary reasons boosting demand for furnitureitems in the country In 2019, the Japanese furniture business grew from a modestmarket of roughly 50 billion yen to nearly 3.5 trillion yen The popularity of high-endand luxury furniture is a key element of Japanese furniture consumption

- The country is seeing increased construction activity, which has resulted in thegrowth of residential real estate and a large increase in the number of families This isincreasing demand for furniture such as living room and bedroom furniture Thecountry is also seeing an increase in demand for office furniture products as officespace utilization rises, fuelling market demand Japan is also seeing an increase indemand for exquisite and long-lasting high-end solid wood furniture when starting anew family, which is fueling market expansion

- In recent years, the market share of imported furniture in Japan has increaseddramatically Wooden furniture accounts for the majority of imported furniture,followed by furniture accessories, metal furniture, plastic furniture, and so on Chinahas become Japan's largest furniture importer, accounting for roughly 40% of totalJapanese wooden furniture imports due to low labor costs Thailand, Vietnam,Malaysia, the Philippines, Indonesia, Germany, and Italy are some of Japan's otherfurniture importers

- Japan has recently emerged as a prominent market for Vietnam's woodenfurniture exports, with an expected value of $445.2 million in 2021 The Japanesemarket is well-known for its high high-quality standards, notably in design andtechnology Convenience and outstanding customer service are also important toJapanese consumers To be successful in the Japanese market, it is necessary to graspthe local culture, language, and business practices, as well as to adhere to legislationand certifications Conducting extensive market research and building strategicalliances with local businesses can also be advantageous Overall, with the increasingdemand for wooden furniture in Japan, it represents a substantial potential market for

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enterprises that can fulfill the Japanese market's high requirements

- With the growth potential and high demand of the wooden furniture market inJapan, Vietnam can take advantage of its advantages to develop this market andstrengthen its competitiveness in the international market

5 Japanese customer needs, preferences, and behavior

- To succeed in the Japanese market, businesses need to research andunderstand local culture and business practices It is also important to comply withregulations and certifications Tailoring offerings to meet the specific needs andpreferences of Japanese consumers is another essential step Market segmentation canhelp businesses identify specific customer segments and target their offeringsaccordingly while building customer-centric strategies that focus on meeting customerneeds and preferences

- Overall, taking a customer-centric approach and investing in understandingthe unique characteristics of Japanese consumer behavior can help businesses succeed

in the Japanese market

6 Analyzing key competitors and market trends (including their strengths, weaknesses, and strategies)

6.1 Direct competitor

* Foreign manufacturers: Looking at the broader competition, out of the

country, our business has the following competitors:

- China: China has more than 50,000 production facilities with more than 50million workers with sales of nearly 20 billion USD/year In the field of furniture,China is currently the world's largest supplier, accounting for 11.9% of the worldmarket China has the advantage of low production costs and cheap labor, so the price

of wood products is relatively low Since the 90s, Chinese wood products have enteredthe EU market, and are now present in most countries of the region

- Thailand: According to Thai forest product experts, thanks to improvedproduct quality and rich designs, the export turnover of Thai wooden furniture inrecent years has reached 1.4 billion USD The shortage of human resources has forcedThai manufacturers to step up production and focus on product designs that meet theneeds of high-end consumers rather than the mass consumer market

- Indonesia: Indonesia is a major exporter of wood products, with a total value

of 12.4 billion USD in 2019, and 11 billion USD in 2020 On average, in the period2015-2020, 58% of export value is from pulp and paper products, with furniture, andother woodworking products dominating the balance

Indonesia's forests provide the main raw material for the growing woodworkingindustry At least 68 million hectares have been designated as production forests,including industrial forests (HTI) and primary/non-industrial forests (HA)

Log output ranges from 38 to 48 million cubic meters (m3) in the period

2015-2020 The output is mainly industrial round wood, accounting for 86% on average

- In terms of export value, Japan, China, the United States, and South Korea arethe main markets for the Indonesian wood industry, including veneer, processed wood,and wood chips In 2019, 56% of Indonesia's total wood product exports were shipped

to these four countries

* Local manufacturers

Currently, the country has about 2,000 enterprises in the wood processingindustry, of which 450 are specialized in export production (120 companiesspecializing in the production of outdoor goods and 330 companies in the production

of furniture) Which, enterprises in the areas of Ho Chi Minh City, Binh Duong, DongNai, Quy Nhon, and Binh Dinh have had the highest export turnover of wood products

to the Japanese market in recent years Each region has different competitiveadvantages, such as advantages in labor and production costs However, Ho Chi MinhCity is still an area with many advantages in expanding the export of wood products tothe Japanese market Specifically, we will take a look at some domestic competitors:

- Binh Duong: Currently, Binh Duong has 450 enterprises and 203 individualhouseholds dealing in wood processing, and there are many large and capableinvestment enterprises such as Chan Kiet Company (10 million USD), Doanh DucCompany (US 10 million) The number of enterprises exporting more than 100containers is increasing, such as Tran Duc Company, Tien Tien Company, TruongThanh Company…

- Dong Nai: Currently, the province has 162 wood processing and tradingenterprises, of which half of them are exporting goods, attracting thousands of idlelocal workers The number of wood processing and business establishments is mainlyconcentrated in Bien Hoa City with more than 400 enterprises Businesses in Dong Naimainly follow orders with little creativity, which has caused businesses to miss manygreat business opportunities Another equally important limitation is the limitedcapacity and lack of capital, so the production scale is still small, and the organizationand cooperation are still loose, so it has not been able to create large orders Currently,

on average, there is a slow-renovating turmeric wood processing enterprise, plus there

is no goods distribution system, so most businesses still do business in the produced, self-expendable" business model, which has greatly limited the traditionalproduction capacity inherent in craft villages

"self Binh Dinh: Currently, there are 71 units involved in exporting wood products

and the average export turnover of each unit is about 2 million USD/year Duyen Haiprivate enterprise belongs to the Khai Vy group, which is the leading unit of Binh Dinhprovince

* Online marketplaces

- Online marketplaces such as Rakuten and Amazon are also significantcompetitors in the Japanese market for wooden furniture exports, allowing for easyaccess and comparison of different products

- E-commerce floor called HOPE (HAWA Online Platform for Exhibition), is anonline exhibition platform to help wood furniture exporters expand their opportunities

to approach international buyers through advanced technologies, application of DigitalMarketing (digital marketing), e-commerce…

According to the assessment, this is the application of 4.0 technology to catchthe trend of developing digital marketing methods for the Vietnamese furnitureindustry At the same time, HOPE is also a solution to support export businesses toapproach customers before travel restrictions due to the Covid-19 epidemic

Since August 2020, the HOPE platform has had a total of more than 20,000square meters of showroom area with nearly 10,000 products from 70 exhibitors,attracting nearly 30,000 visitors from nearly 100 countries and territories Thecountries with a high number of HOPE visitors are the USA, UK, Canada, Portland,Germany, France, Australia, and Korea, respectively

* Manufacturers of custom-made furniture

Moc Viet Furniture - Moc Viet Trading and Production Co., Ltd, Truc LinhFurniture - Truc Linh Investment Joint Stock Company, Dai Phat Furniture -Production Company Limited And Trade and Construction of Dai Phat Interior,Interior, and Exterior Decoration - Duc Viet Trading Production Company Limited(HCMC); Truc Linh Furniture - Truc Linh Investment Joint Stock Company, VuongViet Furniture - Vuong Viet Trading & Production Company Limited, HousedesignInterior Design - House Design Company Limited (Hanoi)

6.2 Potential rivals

* Strict requirements on environment and business ethics

- Japan has a very special business culture, which requires businesses to strictlyadhere to regulations and ethical business processes Business environment and ethicsare very important to Japanese consumers and strict compliance with environmentalregulations and business ethics is a basic requirement of businesses wishing to operate

in this market

- In terms of the environment, Japan is one of the leading countries in

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environmental protection and pollution reduction Therefore, businesses need to ensurethat their products comply with strict environmental regulations and standards Forexample, exported wood products need to be sourced from sustainably managed areasand not harm the environment

- In terms of business ethics, Japan has a very specific business culture that putstrust and respect first Businesses need to strictly follow safety and hygieneregulations, and ensure that their products do not harm the health of consumers Inaddition, businesses need to treat their employees, partners, and customers well, andnot engage in unethical actions to gain profits

* Changes in trade policies or the political economy in the future

A change in tariff policy, import conditions, or new environmental protectionmeasures may affect the price or production process of wood products In addition,security or political issues can also have an unforeseen impact on exports Therefore,businesses need to monitor the economic and political situation of Japan and relatedcountries to have appropriate plans and solutions when unforeseen changes occur

III Business Strategy

1 The process of exporting goods

During the implementation of the export process, it is necessary to comply withregulations and procedures related to transportation, customs, and import procedures toensure the success of exporting goods to Japan

- To export goods to Japan, prepare the necessary documents After preparingthe necessary documents, it is necessary to register and be accepted as an officialexporter in the whole country of Japan Next, it is necessary to contact shippingpartners and agents in Japan to assist in the export process

- Check and comply with Japanese export regulations to avoid breaking the law

- Goods need to be carefully packed to avoid damage and ensure safetransportation

- After packing the goods, transport them to the port to proceed with shippingprocedures to Japan

- After arriving at the port, the goods will be cleared through customs to beconfirmed as eligible for shipping to Japan

- After completing customs clearance, the goods will be shipped to Japan

- After arriving in Japan, goods will be cleared for import to be allowed tocirculate on the market