Indonesian Furniture Industry Fights Against Big Giant

Indonesian furniture industry has grown rapidly after the Asian monetary crisis in 1997. This crisis led to a reverse effect to furniture industry in Indonesia since the price of product became much lower in terms of price from overseas buyers' points of view. The massive demand from overseas buyers made every actor involved in this business enjoy many financial advantages.

Unfortunately, the circumstance is in a big danger now because of the massive growth of Chinese furniture industry. As we know, the specific characteristic of Chinese business is massive products produced at low cost. This situation makes China as a strong competitor on every industry type including furniture.

Data shows that the number of Indonesian-based furniture products exported to USA is decreasing significantly year by year. Data also shows that China-based furniture products begin to take over USA based market share. Some businessmen from Indonesia always argue that the ruling demand from USA is primarily caused by financial crisis suffered mostly by USA. However, they do not think that there is a big waking giant in the furniture industry called China.

The question is, how the local players in Indonesia can retain their market shares, especially when they realize that The Giant is now threatening them. The answer for this question is not easy in terms of both theory and practice. However, the rule of thumb to make local players survive is by enhancing product quality and reducing cost. You may consider that this answer simplifies the actual problem but this is the critical variables that every exporter can control since many constants come from external variables that they can not control such as government rule, high cost economy, and many other factors.

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