How do you assess the position of Vietnam’s wood processing industry in the global value chain?
First of all, I would like to emphasize that when we talk about Vietnam’s wood processing industry today, it should more accurately be referred to as the wood and furniture industry. Vietnam’s position in the international market has not been built solely on conventional wood products, but also on a relatively comprehensive furniture industry that makes use of a wide range of materials, including wood, stone, leather, fabric, metal and new materials. Vietnam today is therefore no longer regarded merely as a supplier of raw materials or a manufacturer of wooden products. It has developed into an important global hub for furniture manufacturing and supply.
Looking back over the past two decades, Vietnam’s wood and furniture industry has achieved remarkable growth. From an export turnover of only around USD 300 million some 20 years ago, the industry’s exports exceeded USD 17.2 billion in 2025. The United States remained the largest market, accounting for more than 55% of total export turnover. Japan ranked second, recording growth of more than 23% and representing approximately 12.5% of exports, while China ranked third with a share of around 12.1%. Together, these three markets accounted for nearly 80% of Vietnam’s total wood export value. The industry maintained its growth momentum in 2026. In the first eight months of the year, exports of wood and wood products reached USD 11.69 billion, an increase of 5% compared with the same period in 2025.
More importantly, the industry’s progress is reflected not only in the scale of its exports, but also in its changing position on the global trade map. Vietnam currently ranks first in Southeast Asia, second in Asia after China, and among the world’s five largest exporters of wooden furniture and related products. At certain points, Vietnam has risen to third or fourth place globally, surpassing several countries with long-established industrial traditions, including Germany and Poland.
Over more than 20 years of development, the wood industry has consistently maintained double-digit or near-double-digit growth rates. This is an achievement that relatively few sectors of the Vietnamese economy have sustained over such a long period. In 2025 in particular, the industry generated a trade surplus of nearly USD 12 billion, making a significant contribution to Vietnam’s overall trade balance.
Beyond its export value, the wood and furniture industry provides employment for approximately one million people across the entire value chain, from forest planting, management and harvesting to processing, logistics, design, manufacturing and trade. The industry has also developed a relatively comprehensive manufacturing ecosystem, with companies participating across multiple stages of the supply chain.
What are the key advantages underpinning the competitiveness of Vietnam’s wood industry?
The success of Vietnam’s wood industry is reflected not only in its strong export performance, but also in the development of a relatively comprehensive manufacturing ecosystem. From raw materials and processing to supporting industries, logistics and finished-product manufacturing, different stages of the supply chain have become increasingly well connected. This has helped make Vietnam one of the preferred sourcing destinations for international buyers seeking wood products and furniture.
More importantly, the industry’s strength does not come from a handful of individual companies, but from the ecosystem as a whole. Buyers coming to Vietnam can find virtually all of the key elements required for furniture production, from raw materials, components and fittings to finished products. This integrated ecosystem provides an important foundation for the industry’s competitiveness.
At the same time, it is important to recognize that Vietnam’s achievements to date remain largely concentrated in manufacturing. The country has established itself as one of the world’s major furniture manufacturing hubs, but this should be seen as a foundation from which the industry can move further up the global value chain.
In your view, what are the biggest weaknesses of Vietnam’s wood industry in the global value chain?
Vietnam’s wood industry still faces several significant weaknesses within the global value chain. While manufacturing is undoubtedly a critical stage, much of the value added is generated through activities such as research, design, brand building, distribution control and the ability to shape consumer trends. In these areas, Vietnam still has a considerable gap to close compared with leading countries.
At present, most Vietnamese companies continue to operate under the OEM model, manufacturing products to buyers’ specifications. Although the industry has developed strong manufacturing capabilities, limited control over design, branding and market access keeps many companies in the lower-value segments of the chain. This also leaves them more vulnerable to changes in trade policies, technical barriers, tariffs and increasingly stringent environmental requirements.
If we focus solely on adapting to change, we will always remain one step behind. The industry therefore needs to move from adaptation to creation, and from simply participating in the game to helping shape the rules of the game. Achieving this will first require a shift in mindset. The wood industry should no longer be viewed merely as a manufacturing sector, but as an industry that sits at the intersection of the green economy, the creative economy and sustainable development.
In fact, a modern wood industry does not inherently conflict with environmental protection, particularly as international sustainability standards become increasingly stringent. Protecting natural forests requires the development of planted forests, and for planted forests to expand sustainably, they must generate economic value.
The wood industry therefore plays an important role in promoting sustainable forestry, creating livelihoods for local communities and contributing to the development of a green economy. With more than 14 million hectares of forest, Vietnam has a substantial foundation on which to build a more sustainable wood and furniture industry.
What should the wood industry do, and what strategic solutions are needed to create greater value and shift from a reactive to a proactive position?
Transparency in the origin of raw materials, production processes and supply chains is becoming a mandatory requirement in global markets. Companies that proactively meet these requirements at an early stage will gain a stronger competitive advantage and be better positioned to expand into new markets. At the same time, design is a key driver of value creation. It enables companies to take greater ownership of their products, build their own brands and participate more deeply in the global value chain. Alongside design, investment in technologies such as artificial intelligence, automation and big data can help improve productivity, reduce costs and enhance product quality.
The industry also needs to build a strong national brand associated with quality, creativity, sustainability and reliability. To turn this objective into reality, a concrete action plan is required, with clearly defined targets, timelines and evaluation mechanisms to ensure effective implementation. Another priority is for the industry to maintain an active presence in key markets and engage proactively in trade remedy and legal cases when they arise. At the same time, it should establish regular channels of communication with international organizations, industry associations, policymakers and businesses.
We cannot wait until problems emerge before providing explanations. Proactive dialogue and timely information sharing are essential if the industry is to move from a reactive position to a more proactive one. To strengthen its position in the global value chain, the industry needs a clear development roadmap with short-, medium- and long-term objectives, supported by a robust data system and measurable KPIs.
Over the next one to five years, the priority should be to move from OEM manufacturing toward ODM, where companies undertake both design and production, and ultimately toward OBM, where they develop and own their own brands. This transition will require leadership from major industry players, together with greater investment in research, product development and design. In parallel, the industry should establish a transparent and comprehensive traceability system, accelerate technology adoption and develop a stronger innovation ecosystem. It should also strengthen domestic and regional supply chains based on clear market strategies, while building an international market intelligence system capable of identifying and anticipating emerging trends.
In the longer term, the ambition should not be limited to participating in global markets, but should gradually extend to having a greater role in shaping them. This means actively contributing to the development of future production standards, from raw materials and carbon certification to cost structures and sustainability requirements. Developing a complete supply chain that is fast, flexible and reliable will generate greater added value and, over time, strengthen the industry’s ability to influence pricing in the global market.
To achieve this ambition, the Government should regard the wood and furniture industry as a strategic economic sector for at least the next 10 to 20 years. On that basis, appropriate policies should be introduced to encourage, support and safeguard the industry, creating a favorable environment for businesses to make long-term investments, strengthen their competitiveness and pursue sustainable growth.
[Vietnam Economy - No.39/2026]
