1. Centre for wood and furniture industry studies Versailles, 04/11/2005 THE GLOBAL FURNITURE MARKET European Hardwood Conference Versailles, Friday 4 November 2005 Teresa Gargiulo, Federlegno-Arredo

2. THE GLOBAL FURNITURE MARKET A HUGE GLOBAL BUSINESS Furniture is the largest low-tech sector worldwide with an estimated total production of about 220 billions of euros. Europe is the largest furniture producer, but Asia is performing increasingly better. WORLD FURNITURE PRODUCTION AND CONSUMPTION BY REGIONS Fig. 1. WORLD FURNITURE PRODUCTION AND CONSUMPTION BY REGIONS. Per cent, 2004. 2 Centre for wood and furniture industry studies Versailles, 04/11/2005

3. WORLD FURNITURE IMPORT Fig. 2. WORLD FURNITURE IMPORT. Million dollars, 1985-2000. In the last ten years furniture trade grew faster than others traditional products trade. Last year the total global furniture trade worth was 70 billion euros. THE FAST OPENING OF INTERNATIONAL MARKET Centre for wood and furniture industry studies Versailles, 04/11/2005 The opening rate (Import/Consumption) of furniture international market reached more than 30%. THE GLOBAL FURNITURE MARKET 3

4. WORLD FURNITURE IMPORT BY REGION Tab. 1. WORLD FURNITURE IMPORT BY REGION. Billion euro, 2004. EU15 is the most important market, followed by NAFTA; together they cover the 80% of total world import… DEVELOPING REGIONS ARE LEADING THE MARKET GROWTH 4 Centre for wood and furniture industry studies Versailles, 04/11/2005 …but Asia, Russia and EU10 are leading the market growth.

5. THE GLOBAL FURNITURE MARKET The main three players are China, Italy and Germany. Traditional main playerslike, Italy and Germany show relatively low trends. WORLD FURNITURE IMPORT BY SUPPLIERS Fig. 3. WORLD FURNITURE IMPORT BY SUPPLIERS. Billion euro, 2000-2004. GLOBAL FURNITURE MARKET SUPPLIERS 5 Centre for wood and furniture industry studies Versailles, 04/11/2005 In the last five years China doubled its market share.

6. THE GLOBAL FURNITURE MARKET WORLD FURNITURE IMPORT BY SUPPLIERS Tab. 2. WORLD FURNITURE IMPORT BY SUPPLIERS. Billion euro, 2004. China and Poland are the more dynamic new players. Labour cost, design and forest resources are the key-leading factor in international furniture production specialization. DEVELOPING COUNTRIES ARE BECOMING WORLDWIDE MAIN PRODUCERS 6 Centre for wood and furniture industry studies Versailles, 04/11/2005

7. THE GLOBAL FURNITURE MARKET LEADERS FURNITURE IMPORT SHARES BY REGIONS Tab. 3. LEADERS FURNITURE IMPORT SHARES BY REGIONS. Shares (%), 2004. China is the leader supplier in NAFTA and others Asian countries. WORLD FURNITURE LEADERSHIP BY REGIONS 7 Centre for wood and furniture industry studies Versailles, 04/11/2005 Italy is the leader supplier in EU25, Middle-East and Africa. Germany is the leader supplier in EU10, in Other Europe countries and in China.

8. THE GLOBAL FURNITURE MARKET EU15S MAIN FURNITURE SUPPLIERS Tab. 4. EU15S MAIN FURNITURE SUPPLIERS. Billion euro, 2004. China and Poland are increasingly gathering quotas on European import. NEW PLAYERS IN EUROPE (1) 8 Centre for wood and furniture industry studies Versailles, 04/11/2005 Western Europe Countries play a major role in European furniture Industry.

9. THE GLOBAL FURNITURE MARKET EXTRA-UE15 FURNITURE SUPPLIERS OF EUROPEAN IMPORT Fig. 4. EXTRA-UE15 FURNITURE SUPPLIERS OF EUROPEAN IMPORT. Per cent, 2004. If we look at import data without considering EU15 members trade, China and Poland have similar quotas of about 19 per cent. NEW PLAYERS IN EUROPE (2) 9 Centre for wood and furniture industry studies Versailles, 04/11/2005 Main followers are Czech Republic, Indonesia and Romania.

10. THE GLOBAL FURNITURE MARKET LEADERS FURNITURE IMPORT SHARES BY EU15S COUNTRIES Tab. 5. LEADERS FURNITURE IMPORT SHARES BY EU15S COUNTRIES. Shares (%), 2004. Poland is the leader supplier in Germany. MAIN EUROPEAN PLAYERS 10 Centre for wood and furniture industry studies Versailles, 04/11/2005 Germany is the leader supplier in Central Europe. Italy is the leader supplier in France, United Kingdom and Greece.

11. THE GLOBAL FURNITURE MARKET WORLD FURNITURE IMPORT BY PRODUCTS Fig. 5. WORLD FURNITURE IMPORT BY PRODUCTS. Per cent, 2004 Parts and Upholstered furniture have the most important quotas. PRODUCTS 11 Centre for wood and furniture industry studies Versailles, 04/11/2005

12. THE GLOBAL FURNITURE MARKET LEADERS FURNITURE IMPORT SHARES BY PRODUCTS Tab. 6. LEADERS FURNITURE IMPORT SHARES BY PRODUCTS. Shares (%), 2004. Traditional players win in more specialistic products LEADERS BY PRODUCTS 12 Centre for wood and furniture industry studies Versailles, 04/11/2005

13. THE GLOBAL FURNITURE MARKET Traditional players aim at lowering their costs, increasing the added value, opening new markets (i.e. to have a better access to third country markets). A NEW GLOBAL VALUE CHAIN 13 Centre for wood and furniture industry studies Versailles, 04/11/2005 New players aim at increasing theirs weight on international trade and to upgrading the quality of their productions. These forces, via FDI, are defining a new global value chain in the world furniture market.