Recently, the building materials and home furnishing track in Southeast Asia has become a popular area for foreign trade overseas. Four core factors jointly support the high growth potential of the market:
1. Four core logics behind the high market popularity
1. Global furniture and building materials production capacity is shifting to Southeast Asia.
Affected by the restructuring of the global industrial chain, production capacity has been transferred from China, Europe and the United States to Southeast Asia.
According to industry reports, total investment in Southeast Asia’s furniture manufacturing industry will reach US$131.297 billion in 2025, a year-on-year increase of 18.7%.
2. The equipment of local enterprises in Southeast Asia is generally aging, and the supply chain is highly dependent on external parties.
The automation rate of many small and medium-sized enterprises is less than 30%. At the same time, some artificial panels and wood products still need to be imported, which means a huge market space.
In 2025, China’s woodworking machinery (including accessories) exports will reach US$2.308 billion, of which the Asian market accounts for nearly 50%, while Southeast Asia contributes more than 60% of the Asian market’s growth share.
3. Southeast Asia’s economic growth and market structural opportunities.
Southeast Asia’s GDP growth rate will be approximately 4.5% in 2025, and is expected to be approximately 4.4% in 2026.
Thailand, Indonesia, the Philippines and other countries will cut interest rates one after another in 2024.
The real estate and construction industries are the most sensitive to interest rates – after interest rates are lowered, developers are more willing to start construction, and residents’ demand for home purchase loans is released, which directly drives the demand for housing construction and infrastructure projects, which in turn creates rigid demand for furniture, floors, cabinets, plywood, decorative panels, etc.
4. RCEP Agreement and Tariff Dividend.
RCEP (Regional Comprehensive Economic Partnership Agreement) has provided huge institutional dividends for China’s wood products and machinery exports to Southeast Asia.
Under the RCEP framework, Vietnam and Thailand have both committed to eventually achieve zero tariffs on more than 90% of tax items, and more than 90% of goods trade in the region will eventually achieve zero tariffs.
Coupled with the preferential tariffs of the China-ASEAN Free Trade Agreement that came into effect in 2004, the cost advantage of Chinese goods exported to Southeast Asia has been further highlighted.
Second, breakdown of markets in the four core countries
Vietnam – an export-driven manufacturing highland, the main battlefield for China’s plate exports
In 2025, Vietnam’s exports of timber and wood products will reach approximately US$17.2 billion, a year-on-year increase of nearly 6%, making it the world’s second largest furniture exporter. Total exports of timber and forestry products will reach US$18.5 billion, a year-on-year increase of 6.6%, achieving a trade surplus of nearly US$14.9 billion.
Vietnam’s exports are 55% dependent on the US market. In 2025, exports of wood and wood products to the US will reach US$9.46 billion. The Japanese market exceeded US$2.1 billion for the first time and became the second largest export market.
Vietnam’s imports are highly dependent on Chinese-related products: In 2025, Vietnam’s imports of woodworking machinery and accessories from China will reach US$420 million, a year-on-year increase of 18.3%. It is the largest purchaser of Chinese woodworking machinery in Southeast Asia, including automated panel saws.
, edge banding machines, CNC equipment and other high-end products import growth rate exceeds 25%; in terms of boards, Vietnam will import fiberboards from China in 2025 to US$143 million, a year-on-year increase of 31.0%, and imported furniture wooden parts of US$120 million, a year-on-year increase of 26.5%.
Two-way trade also shows a good trend. From January to September 2025, China’s timber import volume from Vietnam reached 246,700 m³, and the import value reached US$145 million, a significant year-on-year increase of 90.1% and 141.9% respectively. The synergy of the China-Vietnam furniture industry chain continues to strengthen.
At the same time, there are three major risks in the Vietnamese market: first, rising labor costs, with the official minimum wage increasing by about 7% annually, and comprehensive labor costs increasing by 10%-15% annually; second, starting from January 2026, Vietnam will impose an anti-dumping tax of 2.59%-39.88% on fiberboard originating in China, which will be valid for five years; third, exports to the United States account for 55%, which is greatly affected by U.S. tariff policies and EUDR regulations, and export uncertainty is high.
It is recommended that companies pay close attention to anti-dumping exemption policies and diversify markets to reduce risks.
Thailand – a test field for “brand overseas” for high-end panels
Thailand is one of the most mature consumer markets in Southeast Asia. Consumers have strong affordability and high quality awareness, and have stable demand for mid-to-high-end environmentally friendly boards, fireproof boards and waterproof boards.
In 2024, Thailand’s net imports of woodworking machinery will reach US$63.5 million, which is 7.3 times its exports.
At present, the FSC certification penetration rate of Thai plywood products has increased from 18% in 2020 to 35% in 2024, and the certification requirements for export to the EU market are more stringent.
It is recommended that companies pay attention to import standards such as Thailand’s TIS certification, promote mid-to-high-end products in line with local consumers’ preferences for environmental protection and design, and also pay attention to Thailand’s rubber wood raw material supply resources.
Malaysia – rapid growth in demand for raw and auxiliary materials, production capacity transfer to new positions
Malaysia is an old furniture manufacturing base in Southeast Asia. In recent years, it has attracted a large amount of production capacity with its friendly foreign investment policies and abundant wood resources. About 80% of its furniture products are exported to international markets, making it a typical export-oriented manufacturing base.
From January to May 2025, Malaysia’s total exports of wood and wood products reached 9.03 billion ringgit (approximately US$2.13 billion).
81.4% of the country’s more than 4,000 wood processing companies are located in the Malay Peninsula, of which 41.7% are mainly engaged in furniture manufacturing and 22.9% produce plywood.
At present, the local area is accelerating its green transformation. More than 520,000 hectares of plantation forests have obtained FSC certification, and the government aims to reach 1 million hectares by 2030 to meet EU compliance requirements.
It is recommended that enterprises target the supporting needs of industrial clusters such as Muar and the Klang River Basin, use the benefits of the China-Malaysia Free Trade Agreement to enter the market, and target and segment the tracks.
Indonesia – Domestic demand is king, and the existing market potential is huge
As the most populous country in Southeast Asia, Indonesia has a huge domestic demand market.
Although residential property prices will only increase by 0.83% year-on-year in the fourth quarter of 2025, and the market is in an adjustment period, there is huge room for a rebound in demand for construction and decoration after the implementation of future stimulus policies.
From a production capacity perspective, Indonesia is one of the world’s major wood-based panel producers, but it is currently facing dual pressures from rising raw material procurement costs and a backlog of finished product inventories.
In recent years, the exhibition area of Chinese exhibitors at the Indonesian International Furniture Fair has expanded from 300 square meters to more than 600 square meters, confirming that the local market space for Chinese products continues to expand.
It is recommended that enterprises pay attention to the price-sensitive characteristics of local consumers, optimize their cost structure and participate in the replacement and upgrading of plain boards, and at the same time arrange logistics and customs clearance in advance to avoid supply chain risks.
3. Changes in consumer trends and opportunities for Chinese panels
Currently, there are two core changes in home furnishing consumption in Southeast Asia: First, customization. The aesthetic and functional requirements of young consumer groups for home spaces continue to increase, and the trend of pursuing quality life, environmental protection, and design is irreversible. Second, environmental protection. Consumers are paying more and more attention to the sustainability of wood. Formaldehyde release standards are becoming stricter. China’s advanced E0-level and ENF-level environmentally friendly boards have significant competitive advantages in the local area.
There are two clear opportunities for Chinese-related companies to go overseas in Southeast Asia: The first is the raw material demand dividend brought by the relocation of furniture production capacity. Affected by the anti-dumping policies of Europe and the United States against Chinese furniture, a large number of panel furniture factories have moved to Southeast Asia. However, local artificial panel production capacity in Southeast Asia is insufficient, and environmental protection and certification production capacity are scarce. More than 65% of the plywood and fiberboard used in Vietnam’s furniture need to be imported from China. In 2025, Malaysia will import panels from China.
The ratio has increased by 44%. The model of “China exports plain boards → Southeast Asia processes them into finished products → exports to Europe and the United States” has become the largest incremental market at present; the second is the dual benefits of RCEP tariffs + rules of origin. Most plywood and fiberboards have gradually achieved zero tariffs, and back-to-back certificates of origin can be applied for. Goods can maintain their country of origin status without re-certification when they are warehousing, repackaged, and repackaged in ASEAN transit countries, and continue to enjoy tariff preferences.
