The advantage of the furniture sector in Malaysia

The Malaysian furniture sector seems to be emerging as an evident winner of the trade diversion arising from the US-China trade war, but share prices of furniture stocks continue to be lackluster.

According to AmInvestment Bank Research (AmResearch), it is comprehensible as such players usually have small market capitalization and share liquidity. Furthermore, the sector is under-researched and needs investor relations initiatives.

The research house stated as furniture exports from Malaysia are free of the tariff spat, it translates into a great price advantage for Malaysian furniture exporters over their Chinese counterparts in the US market.

“We gathered from furniture companies we met up with recently that they have indeed profited from the trade diversion from the ongoing US-China trade war.”

AmResearch noticed that the furniture exporters have observed increased orders in their operations in Malaysia and some players have also seen a similar trajectory for their expanded operations in Vietnam.

AmResearch expected furniture exports from Malaysia to grow 6.1% to US$2.7 billion (RM11.3 billion) in 2019, a 3.1% growth against 2018.

Worth to mention is that main Malaysian furniture players already have a significant presence in Vietnam.

But, the research house is watchful of the risk that the US Department of Commerce could impose duties on Vietnamese goods to stamp out the rerouting of Chinese goods to the US.

“This could entirely erase the price advantage of Malaysian players in Vietnam over Chinese players,” it said.

AmResearch emphasized that Malaysian furniture manufacturers could capitalize on the situation by entering into a genuine joint venture model with Chinese parties, aside from the usual “rerouting” model.

Shreyas Tanna

About Shreyas Tanna

The winner of Mr. Pune 2009 Pageant, Mr. Shreyas Tanna is currently the young, dashing, and dynamic CEO of a market research company called Research N Reports in Pune. Fondly known as RNR, the company specializes in market research as well as industry analysis, and is closely associated with its parent company Absolute Markets Insights (AMI). Mr. Shreyas Tanna began his corporate journey as the Head of Corporate sales & PR at RED Entertainment while pursuing his degree for MMS (Marketing) from the MGM College of Management, Mumbai. After accomplishing the tedious task of balancing his work and education, he further polished his skills in Corporate Sales, Public Relations, Channel Development, Global Client Engagement, Strategic Consulting, and Brand Development by working with HDFC Life and ResearchMoz Global Pvt. Ltd. His dedication towards his work has even won him accolades such as the National Level Performer 2013 – HDFC Life and Mr. ResearchMoz 2015. A disciplined individual with a loving heart, he is often seen taking crisp walks with an engrossed look and a gentle smile within the premises of his company to interact with the various departments. And he will be usually followed by an adorable trail of his beloved trio of Shih Tzu babies proudly known as Gucci, Drake, and Paris. The most enticing thing that you will notice about this content and proud pet parent is his infectious positivity and the firm belief in his eyes, a reflection of his favorite quote, “LIFE IS BEAUTIFUL!”

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