Mr. Huynh Le Dai Thang – Director of Nghia Son Furniture Company Limited: B2C with linkage strategy

Establishing offices and deploying 6 warehouses in key states, ensuring delivery within 48 hours is the “legitimate” path that Nghia Son invested in to be able to penetrate deeper into the US market with its own brand.

* Starting in 2006, for nearly two decades, Nghia Son has focused a lot on exporting to the European market. What is the reason that Nghia Son has recently paid more attention to the US market?

– Since its inception, like other businesses in the industry, Nghia Son’s activities have focused on processing, manufacturing and the main product is outdoor floor panels. At peak times, our 3 factories have gathered more than 1,000 employees. 80% of products are exported to Europe, the rest serve the US and Japanese markets.

Adhering to European market standards, Nghia Son strictly pursues international requirements, from BSCI’s human development policy to FSC, ISO’s traceability and sustainable development standards; recently, compliance with EUDR regulations and CBAM mechanism. Up to now, Europe is still the main market for Nghia Son’s manufacturing activities. However, with the outstanding development of e-commerce, we have opened a new direction. And, this path is suitable for the US market.

* Specifically, what opportunities do you see for the furniture industry in the US?

– According to the latest report from Amazon Global Selling, the e-commerce industry in the interior and exterior furniture industry in the US is currently growing by more than 30% per year, reaching 165 billion USD by 2024. This sales channel helps businesses directly reach customers and requires them to invest in other values ​​​​in the supply chain such as design, trade, marketing… In fact, in recent times, furniture supermarket chains and traditional furniture sales models in the US in particular and European countries in general have all declined due to the sweep of e-commerce platforms.

Vietnamese furniture enterprises have had production strengths but most of them are still satisfied with the present. The decline in orders in 2023 has forced enterprises in the industry to review their production models and plan a more sustainable development path. I think e-commerce will be the door to bring the Vietnamese furniture industry to new values.

* Chinese enterprises have been very quick to catch the wave of online furniture purchases. Are Vietnamese furniture enterprises able to compete in this environment?

– It is true that Chinese enterprises are very good. On average, they can achieve sales of 300 to 800 million USD/year in the online environment. I have approached enterprises that have sold 1 billion USD of furniture on various platforms. They are quick and bold in investing in systems, from logistics to warehousing. Chinese enterprises have almost completely owned their online furniture supply chains across the United States.

That does not mean that Vietnamese enterprises cannot participate. The market is large and quite new, so opportunities are shared equally among everyone. Recently, many Vietnamese enterprises have boldly entered this market. In particular, enterprises in the North seem to be a bit quicker.

Mr. Huynh Le Dai Thang – Director of Nghia Son Furniture Company Limited: B2C with linkage strategy

* Can you share how Nghia Son invests in e-commerce sales in the US?

– The characteristic of online shoppers is to require fast delivery. In addition to Amazon warehouses, Nghia Son organizes a system of 6 warehouses in the US, mostly on the West Coast to meet the delivery schedule within 48 hours. In addition to investing in product design, we have built our own brand, Victory Relax Group, and invested in a very systematic system of brand identity, marketing, and images.

In the first two years, we suffered heavy losses, but when we observed the market again and grasped the purchasing trends of online customers, we made timely adjustments. Currently, the level of customer reception is quite good, with an average of 100 orders/day. For online furniture businesses, if they invest properly, the possibility of reaching 1,000 orders/day is within reach. Of course, achieving that number is not easy. The journey is quite arduous, requiring a lot of effort.

* What strategy will you apply to develop Victory Relax Group in the US?

– For me, e-commerce is like a big ocean, with many platforms such as Amazon, Wayfair… The stronger enterprise has the ability to swim further. It will be difficult for a Vietnamese enterprise to compete directly with Chinese enterprises because they are too fast and have too much potential. However, if Vietnamese enterprises can connect and take advantage of each other’s strengths to compensate for each other’s weaknesses, I think the ability to compete will be better.

Lessons from past failures have given Nghia Son valuable experience to be able to develop in the e-commerce environment. However, starting out as a processing unit, Nghia Son’s current limitation is that its source of goods is not abundant. We aim to expand our links with domestic furniture factories so that we can work together and develop together.

In the next three years, my goal is that 100% of Nghia Son’s products will be exported under the B2C model. I believe that when we do not depend on processing orders and reach users with our own brands and designs, we can ensure a sustainable development path.

Source: https://hawa.vn/ong-huynh-le-dai-thang-giam-doc-cong-ty-tnhh-do-go-nghia-son-b2c-bang-chien-luoc-lien-ket/