Exporters upbeat in sustaining market base amid 'trying times'

CEBU, Philippines - Manufacturers and exporters of gifts, toys and housewares (GTH) are doubling their efforts to protect their market base in the Philippines while strengthening grip on emerging markets.

Although the sector is still suffering from the demand slack from its traditional markets—the United States and Europe, GTH-Cebu President Pete Delantar said the industry is still confident that players will be able to sustain the long-stretched “trying times,” as long as players will be able to guard their home-base, specifically in embracing the 600 million Asean market.

Exporters are no longer expecting that the demand from the US will bounce back, the same as in 2007. Delantar said the demand coming from the US now is "artificial."

The gifts, toys and housewares exporters, including the home furnishing players, now instead are looking at the Asean market as well as other emerging markets as alternative areas to focus on.

Aside from Asean, some home furnishing exporters are also starting to exploit the Middle East market, sensing the improving demand for Philippine-made home accents, said exporter Allan Murillo.

According to Murillo, his company the Murillo’s Export International is getting increasing orders from the Middle East, specifically for made-to-order home accents and furniture.

Custom-made furniture making is not only lucrative in the local market, but it is also gaining interest from overseas clients, such as in Middle East and other parts of Asia, as well as in Europe, Murillo said.

Although the Philippines is currently consuming or buying imported home furnishing products from other countries, including China, local exporters are now adjusting their marketing thrusts, as well as manufacturing styles, like the size of products, to embrace the new trend of “personalized” manufacturing or made-to-order.

Delantar said the Philippines will leverage in the high-end and customized home accent manufacturing, which is now the trend for buyers, and that Filipino exporters will be able to compete head-on with its competitors.

As of October 2012, the Philippines’ importation of furniture dipped by 4.39 percent, an indication that the local market has started to patronize Philippine-made furniture pieces.

On the other hand, despite the popularity of the Philippines in producing high-end and world-class accents or furnishings, the country’s importation of furnishing products grew by 67 percent, based on the Bureau of Export Trade Promotion record.

The local home furnishing market alone, including furniture is estimated at US$647 million.

Delantar stressed that although some exporters are not dumping their western clients, amid the world's focus shifting to Asean as the next profitable market to tap, most are still maintaining their good client-base in traditional markets while there is also a glimpse of hope for recovery in the US and Europe.

Meanwhile, in a report by the Home Accents Group of the Philippines Inc. (HAPI), it expressed confidence that a 10 percent growth will be achieved by the sector this year on improving buying interest from US.

“The US is coming back. China and Vietnam and so on have increased their costs as well so they (buyers) come between Philippines and China prices. We are now competitive plus the fact that our advantage on good design is there,” said HAPI Chairman Luis Sicat in a report. /JMD (FREEMAN)