Starting from May 1st, the prices of three major product lines—Caffinda, Aozhuo, and 12 Yuyuan—produced by Zhongshan Sihai Furniture Manufacturing Co., Ltd. have increased by 5% to 17%. According to the company, the price hike is due to rising costs in raw materials, labor, and logistics. This isn't an isolated event. Companies like Boji Classical Furniture have also raised their prices recently, signaling a potential wave of increases across the Zhongshan furniture industry.
According to Deng Guangsen, the secretary-general of the Zhongshan Furniture Chamber of Commerce, these price adjustments are a normal way for companies to manage rising operational pressures. He believes the increases are reasonable and should not significantly impact consumers.
The recent price adjustment by Sihai Furniture has sparked interest among both customers and industry observers. The company announced that products ordered and paid for before April 30 will still be priced at the old rate, while new orders placed after May 1st will follow the updated pricing.
In its official notice, Sihai Furniture cited rising material, labor, and logistics costs as the main reasons for the increase. However, it did not provide specific details or breakdowns of these costs. When contacted by reporters, the company declined to comment, citing “trade secrets.â€
Sihai’s customer service indicated that the price increases for the three brands were between 5% and 8%, but when checked on the company’s official online store, some products saw increases as high as 17%. For example, a Caffinda mattress previously priced at 3,150 yuan now costs 3,688 yuan—a 17% rise.
Industry experts predict that rosewood furniture may see even more dramatic price hikes. After the Spring Festival, many furniture companies began raising prices, with some increasing rates by up to 10% this month. Wu Jianbo, general manager of Boji Classical Furniture, explained that the cost of skilled labor has risen by 20% annually. A senior craftsman can now earn 300–400 yuan per day, while average workers make around 200 yuan daily.
Raw material costs have also surged. Mahogany, which primarily comes from Laos and Cambodia, has seen a 20% increase compared to last year. For instance, the price of lower-grade Siamese rosewood rose from 40,000 yuan per ton to 50,000 yuan, while higher-quality red rosewood increased from 250,000 yuan to 300,000 yuan per ton.
The China Forest Products Association recently classified Siamese rosewood as an internationally protected species, effective June 12, 2013, which will restrict its import and export. As a result, Li Xingchang, chairman of Taixing Furniture, predicts that mahogany furniture prices could jump by 50% in the second half of the year. Taixing plans to adjust its prices accordingly in June.
The rising cost of wood has led other furniture manufacturers to follow suit. Zhongshan Haoxing Exhibition & Display Co., Ltd. sources most of its materials from Guangxi, where wood costs have gone up by 3% to 5% this year. The company plans to pass on these added expenses to consumers through higher retail prices.
Deng Guangsen notes that both office and home furniture sectors face similar challenges, including wage increases, rising material costs, and the appreciation of the RMB. He views price hikes as a natural response to these pressures and a business decision made by individual companies based on their circumstances.
Despite the price increases, many furniture manufacturers report that sales have not been negatively affected. Sihai’s online store shows that pre-price-increase sales were low, with only 1–3 units sold monthly. However, post-adjustment sales remain steady, and no significant drop in demand has been observed yet.
Wu Jianbo of Boji Classical Furniture said that a 10% price increase last year did not hurt sales. In fact, this year’s order volume has grown by about 20% compared to last year. He attributes this to the strong financial background of customers who typically purchase high-end mahogany furniture, who are able to absorb the price increases driven by rising costs.
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