The Competitiveness of the Indonesian Furniture Industry in Global Trade: A Comparative Study with Vietnam
Corresponding Author(s) : Emma Soraya
Jurnal Ilmu Kehutanan,
Vol 16 No 2 (2022): September
Furniture products with significant added value are strategic commodities for the Indonesian economy. Therefore, this research aimed to determine the competitiveness of the Indonesian furniture industry in terms of marketing by making a comparison with Vietnam due to being one of Indonesia's main competitors in the furniture trade for decades. This research employed a literature study to collect data and an integrated comparative analysis using the 5P mixed market framework of position, product, place, promotion, and price. The results showed that both countries had similar market segments with sensitivity to illegal timber, for example, the US and EU. Vietnam was exceptional in offering lower prices since the Vietnamese furniture industry gained substantial support from the availability of abundant cheap labor and investment. Meanwhile, Indonesia was eminent in supplying raw materials from production forests, and its furniture industry had reached an augmented products level greater than Vietnam. Both countries have easy access to global shipping. Concerning promotion, Indonesia ought to emulate Vietnam by facilitating the furniture industry to participate in international exhibition activities to expand the furniture market network.
- BPS (Badan Pusat Statistik). 2020. Upah Minimun Regional Provinsi. Available from https://www.bps.go.id/indicator/19/220/1/upah-minimum-regional-propinsi.html (accessed March 2022)
- Do Hai Y. 2018. Linkages between timber processing companies and local forest communities: a case study in Vietnam. Paper presented at the 2nd International Conference on Food and Agricultural Economics: 27-28, Proceedings Book, Alanya.
- Drayse MH. 2008. Globalization and regional change in the US furniture industry. Growth and Change 39(2): 252-282. https://doi.org/10.1111/j.1468-2257.2008.00419.x
- EFI (European Forest Institute). 2020. EU FLEGT Facility. Available from http://www.euflegt.efi.int/vietnam (accessed January 2020)
- FAO (Food and Agriculture Organization). 2020. FAO Statistics Forestry Production and Trade 2020. Available from https://www.fao.org/faostat/en/#data/FO (accessed March 2022).
- Faniel IM, Kriesberg A, Yakel, E. 2016. Social scientists' satisfaction with data reuse. Journal of the Association for Information Science and Technology 67(6): 1404-1416. https://doi.org/10.1002/asi.23480
- Fernando Y, Shaharudin MS, Wahid, NA. 2016. Eco-innovation practices: a case study of green furniture manufacturers in Indonesia. International Journal of Services and Operations Management 23(1): 43-58.
- ForestTrends. 2012. Forest Certification in Vietnam. Forest Trends, Washington DC.
- He L, Han Z. 2017. Do usage counts of scientific data make sense? An investigation of the Dryad repository. Library Hi Tech 35(2): 332-342. https://doi.org/10.1108/LHT-12-2016-0158
- Hien P. 2017. Risk Management in Timber Supply Chains : Case of Vietnam’s Timber Exporters to EU Market. Foreign Trade University, Hanoi, Vietnam.
- IHSMarkit. 2016. JOC Insights: US furniture imports. Available from https://ihsmarkit.com/research-analysis/joc-insights-us-furniture-imports.html (accessed April 2020)
- Indarti N. 2012. Does Knowledge Stickiness Affect a Firm’s Innovation Capability? Empirical Evidence From Indonesian Furniture SMEs. Gadjah Mada International Journal of Business 14(1): 17-33.
- ITTO (International Tropical Timber Organization). 2019a. Biennial Review an Assessment of The World Timber Situation 2017-2018. ITTO, Kanagawa.
- ITTO (International Tropical Timber Organization). 2019b. Tropical Timber Market Report (16 ed.). ITTO, Kanagawa.
- ITTO (International Tropical Timber Organization). 2019c. Tropical Forest Update (28 ed.). ITTO, Kanagawa.
- ITTO (International Tropical Timber Organization). 2020a. Tropical Timber Market Report: Vietnam. Vol. 24 (2): 9-10. ITTO, Kanagawa.
- ITTO (International Tropical Timber Organization). 2020b. Tropical Timber Market Report: Vietnam. Vol. 24 (13): 9-10. ITTO, Kanagawa.
- Kusumawardhani A, McCarthy G. 2013. Innovation in small and medium-sized wood-furniture firms in Central Java, Indonesia. Paper presented at the Proceedings of the International Conference on Managing the Asian Century.
- Levitt T. 1980. Marketing success through differentiation-of anything: Graduate School of Business Administration. Harvard University.
- Loebis L, Schmitz H. 2005. Java furniture makers: Globalisation winners or losers?. Development in Practice, 15(3-4), 514-521. https://doi.org/10.1080/09614520500075979
- Luo X, Sun C, Jiang H, Zhang Y, Meng Q. 2015. International trade after intervention: The case of bedroom furniture. Forest Policy and Economics 50: 180-191.https://doi.org/10.1016/j.forpol.2014.09.002
- Maryudi A, Kurniawan H, Siswoko B, Andayani W, Murdawa B. 2017. What do forest audits say? The Indonesian mandatory forest certification. International Forestry Review 19(2): 170-179. https://doi.org/10.1505/146554817821255150
- Maryudi A, Myers R. 2018. Renting legality: How FLEGT is reinforcing power relations in Indonesian furniture production networks. Geoforum 97: 46-53. https://doi.org/10.1016/j.geoforum.2018.10.008
- Meyfroidt P, Lambin, EF. 2009. Forest transition in Vietnam and displacement of deforestation abroad. Proceedings of the National Academy of Sciences 106(38): 16139-16144. https://doi.org/10.1073/pnas.090494210
- Ministry of Industry Republic of Indonesia. 2020. Database Statistik Industri. Available from https://kemenperin.go.id/ (accessed April 2020)
- Mundai E. 2017. Furnitur, Produk Berdaya Saing yang Butuh Perhatian. Badan Pengkajian dan Pengembangan Perdagangan, Kementerian Perdagangan Republik Indonesia, Jakarta.
- Nguyen DH. 2016. The development and future scenarios of wooden furniture exportation to the EU market. Case: Vietnam.
- Oldfield S. 2003. The trade in wildlife: regulation for conservation. Routledge.
- Pujiarti R. 2017. Produksi Furnitur Indonesia. Info Komoditi Furnitur 1:. 22. Badan Pengkajian dan Pengembangan Perdagangan Kemeterian Perdagangan Republik Indonesia, Jakarta.
- Purnomo H, Achdiawan R, Melati, Irawati RH, Sulthon, Shantiko B, Wardell A. 2014. Value-chain dynamics: strengthening the institution of small-scale furniture producers to improve their value addition. Forests, Trees and Livelihoods 23(1-2): 87-101. https://doi.org/10.1080/14728028.2013.875279
- Quyen N. 2016. Assessment on training requirements about human resource in the Vietnam forestry production industry from perspective of international business and integration.
- Rahayu S, Laraswati D, Pratama AA, Permadi DB, Sahide MA, Maryudi A. 2019. Research trend: Hidden diamonds–The values and risks of online repository documents for forest policy and governance analysis. Forest Policy and Economics 100: 254-257. https://doi.org/10.1016/j.forpol.2019.01.009
- Reily M. 2018. Minim Promosi dan Logistik Hambat Pemasaran Industri Furnitur. Available from https://katadata.co.id/berita/2018/10/26/minim-promosi-dan-logistik-hambat-pemasaran-industri-furnitur (accessed April 2020)
- Ruskin-Brown I. 2006. Mastering marketing: A comprehensive introduction to the skills of developing and defending your company's revenue. Thorogood Publishing, London.
- Sathre R, Gustavsson L. 2009. Process-based analysis of added value in forest product industries. Forest policy and economics 11(1): 65-75. https://doi.org/10.1016/j.forpol.2008.09.003
- Sikor T, To PX. 2011. Illegal logging in Vietnam: Lam Tac (forest hijackers) in practice and talk. Society dan Natural Resources 24(7): 688-701. https://doi.org/10.1080/08941920903573057.
- Suhardi B, Anisa N, Laksono PW. 2019. Minimizing waste using lean manufacturing and ECRS principle in Indonesian furniture industry. Cogent Engineering 6(1): 1567019. https://doi.org/10.1080/23311916.2019.1567019
- Statista Vietnam. 2020. Vietnam Minimum Monthly Wages by Region. Available from https://www.statista.com/statistics/1088302/vietnam-minimum-monthly-wages-by-region (accessed March 2022)
- Traffic. 2020. Timber Species. Available from https://www.traffic.org/what-we-do/species/timber/(accessed June 2020).
- Van Geenhuizen M, Indarti N. 2006. Knowledge and innovation in the Indonesian artisanal furniture industry.
- Van Geenhuizen M, Indarti N, Soetanto DP. 2010. Knowledge acquisition and innovation: potentials for upgrading of very small and small firms in furniture manufacturing in Indonesia. International Journal of Foresight and Innovation Policy 6(4): 207-224.
- WRI (World Resources Institute). 2014. Forest Legality Initiative. Available from https://forestlegality.org/risk-tool/country/vietnam#tab-laws(accessed January 2020).