Go for it, furniture Columbus!
DDK Furniture is a relatively young exporter: it has been leading its export history since 2016. However, in this matter, experience is not a temporary factor. It is possible to gain enough experience in six months of intensive export so that beginners can give useful practical advice.
The DDK Furniture company is not like most colleagues who have already told their export stories on our website in that they began to export not furniture products, but blanks for them. “Processed lumber for furniture companies,” said the founder of Leonid Kulyk, with whom we spoke.
The Asian market for most of the companies that willingly shared their export strategies and tactics with our colleagues with our colleagues, as well as the American one, is only in perspective plans, but DDK Furniture has started developing foreign markets from it. “And this is, to a large extent,” says my interlocutor, “because, due to certain circumstances, I was better acquainted with the markets of Asian countries than with European ones, although they are closer.
So, China, South Korea, Taiwan, Indonesia. The geography is solid, countries are significant in the furniture sense. Especially China and Indonesia are recognized not only by Asian furniture leaders, but also by the world. Their powerful furniture areas require a lot of wood raw materials and furniture-like blanks for smooth operation. And this is beneficial for European suppliers of such materials in all respects: significant sales volumes – profitable times, significant sales volumes – profitable and again, because they are convenient for container transportation, because it is completely unprofitable to ship small batches over long distances.
“Having established export to these countries, we decided to move further on the Asian continent – towards India and Pakistan,” Leonid continues. – They began to look for the necessary contacts there and establish them. We were interested in not only furniture manufacturers, but also local traders who have their own warehouses, so they become almost intermediaries between us, suppliers, and Asian furniture manufacturers. ”
– What kind of furniture blanks that Asian furniture makers lack, what have you benefited from? What kind of wood?
– Pine and spruce were the basis of our Asian supplies. Occasionally, our customers ordered oak semi-finished products.
– Pine and spruce were obviously not used for the production of luxury furniture …
– Yes, our customers use them for very simple and cheap products, such as garden and outdoor furniture, shelves for various purposes, and even for pallet products. We quickly realized that it would be profitable to produce such simple things as the same shelves from our own blanks, and they became another of our export products. The racks assembled by us in Ukraine are more competitive than the same, but assembled from our parts in China, labor is more expensive there, so their product is ultimately more expensive. If someone did the same thing in Europe, where labor is even more expensive, he would simply have flown into the pipe with his racks, so such things are products of the Third World. And Ukraine. These are the realities.
By the way, our shelving, which we are talking about, is a product, but to a greater degree is oriented towards Europe. And here we are in a better position than, say, the Chinese. Our rack products are cheaper at the cost price, and secondly, we are geographically closer to European markets, therefore, logistics costs are lower and, thirdly, “made in Ukraine” means “made in Europe”, which is important for Europeans because they , like everyone, wary of Chinese products.
– I began to have an idea that it is expensive to deliver goods to those parts of the Asian continent remote from us, where China, Korea, Indonesia, so this scares beginner exporters.
– And in vain. If you send products to China in containers, it will be cheaper than delivering the same vehicles to Europe – to Holland or to Germany, for example. Shipping a container from Kiev to Shanghai will cost no more than $ 1,300, and road transporting goods to the Netherlands can cost all two thousand.
– Can you name those Asian markets that you have developed stable?
– Absolute stability in the world today, perhaps, is not a single market. The world situation is changing, prices are jumping and falling, economic conditions are changing both in a certain region and in specific countries – not only in importing countries, but also to exporters, which is why markets are very “mobile” organisms. Given this, we keep our “export hand” on the pulse of the situation and adjust our foreign sales strategy.
For example, the current situation is very unpleasant and unprofitable for us: prices for wood raw materials in Ukraine have not changed, and in the world market they have fallen significantly – by 30-40 percent. So philosophize – what to do? However, nothing comforting was achieved, and several important markets for us were almost lost.
To the traditional final question “Which markets are in the company’s plans?” Leonid answered, frankly, unexpectedly (this was the answer to every second exporter with whom we spoke in the framework of the “Export Stories” project): the American continent and especially the US market as the most marginal of all the worlds, with the greatest purchasing power. Indeed, it is no secret to anyone, such an attractiveness is obvious. So who there is not yet present with their goods, first of all, seeks to go there. Well, go ahead, furniture Columbus, make your own discovery of America, and we will rejoice.
The section “Success Stories” was founded as part of a grant project with the support of the Swiss Cooperation Bureau in Ukraine, the name of the project: “Improving the level of cooperation and trust with joint participation in international and national public procurement” – TENDER TOGETHER.