Due to a combination of factors such as rising raw material costs, reduced export tax rebates for furniture, and increasing labor and sales expenses, major cities in the Pearl River Delta, including Guangzhou and Shenzhen, have experienced a new wave of price hikes in the first half of this year. Particularly affected are items like **bed mats**, sofas, and
Other furniture accessories. Compared to the same period last year, the cost of raw materials and labor has gone up by 10% to 30%, leading to increased ex-factory prices across different grades of furniture.
It has been reported that the cost of interior materials—such as aluminum used in hardware, stainless steel, and chemical products like paint and glue—plays a key role in furniture price fluctuations. These materials account for a significant portion of production costs, and their rising prices have directly impacted overall pricing strategies.
**Manufacturers: The Rising Trend in Furniture Prices**
The wave of price increases is now affecting most furniture products in Guangdong. This year, the price of wooden furniture has risen by over 10% compared to the same period last year. Furniture manufacturers are more sensitive than distributors when it comes to deciding whether to raise prices. Many manufacturers in the Pearl River Delta have announced plans to adjust prices again in September and October to cope with ongoing increases in raw material costs, expecting an increase of 10% to 15%. Wang Li, executive secretary general of the Dongguan Famous Furniture Club, mentioned that under the pressure of rising costs, some smaller furniture companies have already shut down.
Additionally, as a labor-intensive industry, labor costs are a major component of furniture pricing. With the new "Labor Contract Law" taking effect at the start of the year, companies must now provide five social insurance benefits for employees, including pensions, unemployment, work injury, maternity, and medical coverage. This has significantly increased labor costs, squeezing already thin profit margins. Industry experts believe that the tight supply of wood and the continued rise in prices over the next decade will be the norm. The domestic furniture sector is facing persistent and substantial cost pressures. Zhu Changling, vice chairman of the China Furniture Association, stated, “With limited resources and rising raw material costs, the price of household goods—including furniture—is expected to continue rising.â€
**Stores: Struggling to Absorb Price Increases**
Major furniture stores have also felt the impact of rising material and labor costs. In response, many have raised ex-factory prices by 15% to 20% in recent months, especially for items like mattresses, sofas, and home accessories. However, retail prices in major home furnishing stores in Guangzhou have remained relatively stable compared to the previous year. To attract customers, some stores have launched promotional campaigns ahead of the peak building and renovation season in July and August. Additionally, major retailers have adopted various sales strategies to stabilize product prices and absorb the cost increases. (Editor: Peter)
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