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I M P O RT S O F F U R N I T U R E T O

T H E C Z E C H R E P U B L I C A N D

P O T E N T I A L F O R T H A I L A N D

MARKET STUDY

PREPARED BY:

OFFICE OF COMMERCIAL AFFAIRS

ROYAL THAI EMBASSY

HOLEČKOVA 29

150 95 PRAHA 5

CZECH REPUBLIC

SEPTEMBER 2016

1

INTRODUCTION - SUBJECT OF THE MARKET STUDY

This market study is focused on position of the Czech Republic in furniture

trade, analysis of imports including information on customs tariffs, trade fairs

and opportunities for Thailand. Source of information were data from the Czech

Statistical Office, Ministry of Industry and Trade, Ministry of Finance and

researches carried by specialized agencies.

CONTENTS OF THE MARKET STUDY

CHAPTER SUBJECT

PAGE

INTRODUCTION - SUBJECT OF MARKET STUDY 1

1 POSITION OF THE CZECH REPUBLIC IN THE FURNITURE TRADE 2

2

2.1

2.2

2.3

2.4

SITUATION ON THE LOCAL MARKET

LOCAL PRODUCTION OF FURNITURE

FUTURE DEVELOPMENT OF INDUSTRY

TOP CZECH PRODUCERS

MEDICAL FURNITURE

3

4

4

7

3 ANALYSIS OF FURNITURE IMPORTS 10

4

4.1

4.2

MARKETING INFORMATION

TARGET CONSUMERS

CONSUMER BEHAVIOUR

11

11

12

5 CZECH RETAIL MARKET 14

6 CUSTOMS TARIFFS 16

7 TRADE FAIRS 17

8 CZECH FUTNITURE ASSOCIATION 19

9 SUMMARY 20

10 OPPORTUNITIES FOR THAILAND 21

2

IMPORTS OF FURNITURE TO THE CZECH REPUBLIC

AND POTENTIAL FOR THAILAND

1. POSITION OF THE CZECH REPUBLIC IN FURNITURE

TRADE

CZ is net exporter of furniture for homes and offices made of wood, metal

or plastics (HS 9403).

DEVELOPMENT OF IMPORTS AND EXPORTS OF FURNITURE

FOR HOMES AND OFFICES HS 9403

TO/FROM THE CZECH REPUBLIC

TOTAL VALUE

OF:

2008 2009 2010 2012 2013 2014 2015 Jan-July/

2015

Jan- July/

2016

Imports to CZ

(in mil. USD)

596,9 428,3 384,6 424,0 429,7 456,4 459,4 251,2 285,6

Exports from CZ

(in mil. USD)

767,9 549,4 563,1 600,7 658,0 737,9 732,8 413,5 474,1

Source: The Czech Statistical Office, September 2016

The table above shows development of exports and imports of furniture since

the year 2008. We can see, that both imports and exports are rising. Since the

year 2012, furniture exports from the Czech Republic are rising faster than

Czech imports of furniture. During January – July, 2016 exports of furniture

grew by 14,7 % while imports recorded growth of 13,7 %.

When we analyze the whole period since the year 2008, we can see, that positive

development was interrupted in the year 2009 by economic crisis. After few

years of slump, the situation stabilized in 2012, however value of exports and

imports have not reached the pre-crisis level yet.

Based on the above table we can conclude, that the Czech Republic mantains

position of a net exporter of furniture.

Czech Republic exports furniture mostly to EU countries, but also to U.S.A. and

Switzerland.

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2. SITUATION ON THE LOCAL MARKET

2.1 LOCAL PRODUCTION OF FURNITURE

The manufacture of furniture has had a long tradition, especially in Moravia.

Popular in Europe as well as worldwide is bent furniture, medical futniture

(hospital beds) and also kitchen furniture. Interesting solitary furniture has been

recently produced by many Czech smaller manufacturers (for halls, living rooms

etc.), which represents an assortment that used to be weakness of Czech

production.

The manufacture of furniture in the Czech Republic is at present concentrated in

small and medium sized enterprises. Furniture is manufactured in all regions of

the Czech Republic – but mainly in South Moravia and Zlín (due to a long

tradition). South Moravia accounts for more than 20 % of total furniture

production in the Czech Republic, the region of Zlín for more than 17 %. The

third place belongs to the region of South Bohemia, followed by Vysocina

Region and Central Bohemia.

Competition advantage of the Czech Republic is the domestic origin of raw

materials and at the same time raw material being a renewable source. Raw

materials are supplied to the furniture industry by the Czech woodworking

sector with the exception of tropical wood and selected variety of materials

which are imported incl. paints, varnishes, metal accessories, but their share on

total supplies is of no great importance.

The branch still faces many problems which will have to be tackled in the

coming period. This applies to the improvement of technologies and

production and their consolidation into larger entities, the improvement of

management and increase in profitability.

Concerning number of employed persons, the declining trend started in the year

2008 (economic crisis), between the year 2008 and 2014, the decrease in number

of workers in furniture industry reached -23 %.

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2.2 FUTURE DEVELOPMENT OF CZECH FURNITURE

INDUSTRY

The branch currently should focus on the modernization of factories and their

effective concentration, and improvement of organization and management.

Big advantage of Czech furniture industry is sufficient sources of the domestic

raw material – wooden mass, nevertheless, the investment activities have been

still low and insufficient. Significant problems with investing are especially in

small enterprises.

However, furniture industry as the whole have favourable prospectives to the

future, not only to maintain existing positions but also to strengthen and enlarge

them. Further expected advancement of the Czech economy will be to a great

extent a decisive driving force accordingly, which should be accompanied by

growth of standard of living as well. It should be witnessed in such a way, that

people in the Czech Republic will replace earlier especially living room and

bedroom furtniture. The average time of utilization of these kinds of furniture

is almost 20 years in CZ, whereas in advanced countries of the EU it is 10

years on average, and then the futniture is replaced by new one.

2.3 TOP CZECH FURNITURE PRODUCERS

Among biggest furniture producers in the Czech Republic are following

companies: TON, JITONA, KORYNA, and SYKORA.

TON, a.s. BYSTRICE POD HOSTYNEM

www.ton.eu

- domestic leader in bentwood furniture, chairs and armchairs

- one of biggest producers of chairs in the world

- chairs account for 95 % of production

- annual production of chairs reaches 1,5 million pcs

- 30 % of production goes to domestic market, rest abroad (to 40 countries)

- turnover in 2014: USD 50 million

- number of employees: 810

- operates network of own retail stores in CZ (13 stores)

5

JITONA, a.s. SOBĚSLAV

www.jitona.cz

- one of biggest producers of wooden furniture in CZ

- established in 1954, when state enterprise with 23 production plants was

created

- in 1991 was transformed into joint stock company

- operates 3 production plants in CZ

- number of employees: 840

- turnover in 2015: 60 mil. USD

- JITONA operates newtork of own retail stores and showrooms (7)

- JITONA uses 2 brands on Czech market: JITONA DESIGN

COLLECTION and JITONA CLASSIC COLLECTION

- more than 95 % of production is exported

- big customer is IKEA

- JITONA CLASSIC COLLECTOIN JITONA DESIGN COLLECTION

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KORYNA NABYTEK, a.s. KORYCANY

www.koryna.cz

- one of the biggest producer of kitchens

- in kitchens controls more than one third of domestic market

- 60 % of production is meant for domestic market, rest for export (mainly

to Slovakia, Russia, Bulgaria, Baltic States)

- number of employees: 100

- turnover in 2014: USD 25 million

SYKORA, s.r.o. VIZOVICE U ZLINA

www.sykora.eu www.sykora-kuchyne.eu

- one of biggest producers of kitchen units made to order (fitted kitchens)

- established in 1992

- new production plant was built in 2001 – top level of machines,

technology, computer equipment, production is fully automated

- number of employees: 120

- turnover in 2014: USD 15 million

- exports account for more than 40 % of total production

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2.4 MEDICAL FURNITURE

The Czech Republic is net exporter of medical furniture (HS 9402). Exports

from the Czech Republic in the year 2015 reached 141 mil. USD, while imports

to CZ 13 mil. USD. Main export destinations are E.U. countries, U.S.A., Saudi

Arabia, United Arab Emirates, Switzerland.

Market leader in medical furniture is Czech company LINET (www.linet.cz) .

Czech company LINET CO., LTD., manufacturer of hospital and nursing beds,

became No. 1 in Europe in the year 2015. The turnover in the year 2015

recorded 25 % growth and reached the volume of EUR 218 mil. The fastest

growth in Europe was reached especially in Germany, Italy, Spain and Sweden.

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The company´s portfolio includes solutions designed for intensive care, products

for regular in-bed treatment and also special beds for senior citizen´s homes and

long-term care facilities. The LINET range also includes a wide range of

accessories such as anti-pressure ulcer mattresses, mobile equipment, healthcare

furniture, etc.

LINET headquarters, as well as its production plant, is based in Zelevcice near

Prague, where it has been located since its establishment in 1990. The plant

manufactured 50 000 hospital beds in 2015. In the year 2016, LINET is going to

open another factory in Zelevcice. 95 % of production goes for export to 100

countries of the world. Another factory of LINET is located in Germany, in

Wickede. The total number of employees of LINET is 1 350, in the Czech

Republic it is over 900.

Total number of beds manufactured by LINET in the year 2015 reached

90 000 (50 000 of hospital beds + 40 000 of special beds for senior citizen´s

homes).

KEY MARKETS FOR LINET CO.

COUNTRY TURNOVER

in 2015 (mil. EUR)

GROWTH

in 2015

the U.S.A. 45 67 %

Germany 44 26 %

Midddle East and Africa 16,6 32 %

The highest growth in 2015 was reached in the U.S.A., where the turnover

increased by two thirds, from EUR 27 mil. to EUR 45 mil. In the market

segment of intensive care beds, LINET became No. 3 player in U.S. market

reaching the share of 20 %.

The significant growth of 26 % was reached also in German market with the

revenues reaching EUR 44 mil. in 2015.

The third most important market for LINET are countries of Middle East and

Africa with turnover of EUR 16,6 mil. and growth of 32 % in 2015. In Saudi

Arabia, the U.A.E., Qatar and Bahrain, the most exclusive range of products are

in demand. The latest order from Middle East comes from HAMAD hospital

group in Quatar – delivery of 400 hospital beds incl. special beds for intensive

care unit for children. Main competitors of LINET in Middle East are U.S.

companies Hill Rom and Stryker and british Arjo Huntleigh.

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As for the plans of LINET in the year 2016, the company wants to focus on

Asia. In April, LINET will join the biggest medical fair in China, the CMEF

Shanghai. In China, LINET started to co-operate with Chinese pharmaceutical

company XIUZHENG.

Due to high quality, long time experience and reasonable prices, LINET could

be considered as supplier of hospital beds for Thailand. Currently, LINET is

considering to invest in Thailand (FDI).

Major competitors of LINET in Europe are FAMED of Poland and VOKER Co.

of Germany. In the U.S. market, it is HILL-ROM Co. and STRYKER Co.

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3. ANALYSIS OF IMPORTS OF FURNITURE

TO THE CZECH REPUBLIC

IMPORTS OF FURNITURE FOR HOMES AND OFFICES HS 9403

TO THE CZECH REPUBLIC

COUNTRY IMPORT VALUE

( thous.USD)

MARKET SHARE (%)

GROWTH

(%)

01-07/ 2015

01-07/ 2016 2014 2015

01-07/ 2016 2014 2015

01-07/

2016 2015

Poland 58,500 69,168 105,522 111,745 24.22 23.12 24.32 18.24 5.90

Germany 52,695 66,613 89,980 101,592 23.32 19.71 22.11 26.41 12.91

China 34,476 37,155 59,391 57,030 13.01 13.01 12.41 7.77 -3.98

Italy 17,618 16,499 35,640 28,521 5.78 7.81 6.21 -6.35 -

19.97

Slovakia 18,459 18,563 35,342 34,650 6.50 7.74 7.54 0.56 -1.96

Austria 14,064 15,083 24,182 26,010 5.28 5.30 5.66 7.25 7.56

Sweden 5,825 6,037 15,000 10,320 2.11 3.29 2.25 3.64 -31.20

Lithuania 6,287 8,396 14,743 12,886 2.94 3.23 2.80 33.55 -12.60

Thailand 475 815 796 942 0.29 0.17 0.21 71.58 18.34

Other countries 42,837 47,264 75,816 75,711 16.55 16.61 16.48 10.33 -0.14

TOTAL 251,236 285,593 456,412 459,407 100.00 100.00 100.00 13.68 0.66

Source: The Czech Statistical Office, 2016

Major suppliers of furniture to the Czech Republic are EU countries (advantage

of border-free trading). Market leader is Poland with stable market share of 24

%, followed by Germany (market share in 2015 reached 22 %). The third most

significant supplier of furniture to Czech market is China. Market share of China

in the year 2015 reached 12,4 %.

Market share of Thailand is less than 1 %, in the year 2015 furniture in the total

value of 942 thous. USD was imported to CZ from Thailand.

From Asian countries, China is leading supplier of furniture to Czech, its market

in the year 2015 reached 12,4 %. From China, mostly wooden indoor furniture,

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metal furniture and furniture parts of metal are imported. Market share of other

Asian countries, such as Malaysia, Indonesia, India, Vietnam and Thailand, on

Czech market is lower than 1 %. Imports from Vietnam in the year 2015 reached

3,9 mil. USD., main items are: furniture parts, metal furniture, wooden kitchen

furniture and rattan/wicker furniture Volume of imports of furniture from India

reached 2,8 mil. USD, main item is wooden furniture for living and dining

rooms. From Indonesia, volume of imports in 2015 was 1,7 mil. USD, teakwood

furniture for both indoor and outdoor, rattan and bamboo furniture was

imported. From Malaysia, mostly wooden furniture for homes is imported,value

in 2015 reached 0,8 mil. USD. From Thailand, major item is HS 9403 60

Wooden Furniture for Homes – made of exotic wood.

4. MARKETING INFORMATION

4.1 TARGET CONSUMERS

The decisive factor in purchasing furniture is the performance in entire Czech

economy. It relates mostly to increases in the scope of housing and industrial

constructions, larger reconstructions and to general increases in standards of

living. This would free up financial means, which could be used for purchase of

furniture.

As for the target groups for furniture in the Czech Republic, two categories can

be identified:

1. corporate sector (offices, schools, hospitals, hotels, restaurants etc.)

2. households

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4.2 CONSUMER BEHAVIOUR

Demand for furniture in the Czech Republic can be classified into two

categories:

1) low-priced furniture made from lower quality materials and

technologies and sold mainly in big shopping centres – group of

cheap furniture is not expanding. The number of customers who are

interested in new opportunities is decreasing, as they are

discovering that low-priced furniture does not correspond with the

idea of a quality interior furnishing

2) high quality furniture with attractive design, made from quality

materials using state-of-art technologies. New lifestyles are

changing the former habits for furnishing flats. Travel, exhibitions,

magazines and television contribute to the customers´ knowledge

and demands. General knowledge about materials is improving and

the demand for materials with certain properties not harmful to

one´s health is on the rise.

Furnishing new flat

When furnishing new flats, people make it step by step. Most frequently, they

start with a quality bed equipped with a quality frame and a compatible mattress.

The number of customers who realize how important a bed is for their health, is

increasing.

The kitchen, along with the bathroom, is at the forefront of interest not only in

new households, but also in the renovation of old flats. Companies KORYNA

NABYTEK (www.koryna.cz) and SYKORA Co. (www.kuchyne-sykora.cz) are

biggest producers and exporters of kitchen furniture and control more than 50 %

of domestic market in kitchens. In both cases, export accounts for more than 40

% of the total production. Competition between producers is constantly

increasing quality. The bodies of the kitchen units are made not only from

chipboard materials, but also from quality laminated wood. Materials used for

the doors and the fronts of the full pull-out drawers, which have replaced the

former, inaccessible internal shelves, are hard specially processed fibreboard,

three- and five-layer bioboard, perforated boards in frames, toughened glass in

frames etc. New designs are being sought for better utilization of space, and also

drawers and doors, that close silently. Stone, CORIAN, and other current

materials are used for the top boards, the work surfaces are lit by built-in cool

safe lights.

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Metal is making a re-appearance in flats again (the comfortable living of the

1920s is returning in new materials) on appliances, handles, edges and legs of

kitchens, on the legs of upholstered furniture, on the visible parts of armchair

structures.

Based on the latest research of INCOMA GfK market research agency, the

breakdown of the different cathegories of furniture purchased most frequently

by Czech customers in the year 2015 was as follows:

Source: INCOMA GfK, 2016

14

As for furniture accessories, the cathegory most in demand in the year 2015 was

bedclothes purchased by 70 % of customers, tableware (purchased by 65 % of

customers) and lamps + lighting (purchased by 64 % of customers).

In the year 2015, the average spendings for furniture was CZK 14 850,- per year

and CZK 4 200 per home accessories. Furniture is most frequently purchased by

age cathegories below 39 years of age.

5. CZECH RETAIL MARKET

According to latest research of INCOMA GfK market research agency, more

than two thirds of Czech customers prefer buying furniture in large

specialized stores. Key players on the Czech market are 7 large international

chains stores selling furniture and home accessories.

INTERNATIONAL CHAINS SELLING FURNITURE IN THE CZECH REPUBLIC

COMPANY TURNOVER

in 2014 (bil. CZK)

NUMBER

OF STORES

IKEA 7,22 4

KIKA 1,83 8

JYSK 1,69 79

XLMX Co.

(XXXLutz and MOBELIX stores)

1,67

2 XXXLutz

9 MOBELIX

SCONTO 1,59 8

ASKO 1,34 13

Source: INCOMA GfK

15

Market leader in terms of turnover is IKEA, leader in number of branches is

JYSK, that operates 79 stores in the Czech Republic. JYSK is famous especially

for home accessories and decoratons.

Some of big Czech furniture producers have networks of their own retail stores

and showrooms, such as companies TON or JITONA.

Big international companies import furniture directly through their purchasing

departments (centralized for whole Europe)

Among importers of furniture and accessories from Thailand (mainly teak, water

hyacinth etc.) is for example DONATE Co. (www.donate.cz) or HD NABYTEK

(www.hd-nabytek.cz). Thai furniture and accessories can be also purchased in

IKEA (IKEA is buying furniture through centralized purchasing department).

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6. CUSTOMS TARIFFS

There are no trade barriers concerning imports and exports of furniture and

parts.

CUSTOMS TARIFFS

H.S. Description EU rate

9403 10 Office furniture of metal 0,0 %

9403 20 Other metal furniture 0,0 %

9403 30 Wooden office furniture, 0,0 %

9403 40 Wooden kitchen furniture 2,7 %

9403 50 Wooden bedroom furniture 0,0 %

9403 6010 Wooden furniture for living

and dining rooms

0,0 %

9403 70 Furniture of plastics 0,0 %

9403 81 Furniture of other materials

(rattan, bamboo, etc.)

5,6 %

9403 9010 Furniture parts of metal 2,7 %

9403 9030 Furniture parts of wood 2,7 %

Source: EU TARIC

Since 1st May 2004, the Czech Republic has became an EU member and since

than EU customs legislation applies on all imports.

Details of customs duties and possible restrictions can be viewed on internet

website of EU dealing with customs tariffs:

http://ec.europa.eu/taxation_customs/dds2/taric

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7. TRADE FAIRS IN THE CZECH REPUBLIC

MOBITEX – INTERNATIONAL TRADE FAIR

OF FURNITURE AND INTERIOR DESIGN

MOBITEX fair is organized together with several other fairs: IBF –

International Building Fair, ENVIBRNO – International Enviromental Fair and

URBIS TECH – Fair of Communal Technology

Period: 25 – 29 April 2017

Venue: BVV Exhibition Grounds, city of Brno

Organizer: BVV Co. – www.bvv.cz/

LAST MOBITEX FAIR IN FIGURES

Total number of exhibitors 116 from 5

countries

Total exhibition area 3 135 sqm

Total number of visitors 43 223 number of visitors is

summary of visitors to IBF, ENVIBRNO and

URBIS fairs

Detailed information on MOBITEX fair in English can be found on the internet

websites of BVV Co., the organizer: www.bvv.cz/mobitex

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FOR INTERIOR FAIR - INTERNATIONAL FAIR OF INTERIORS

AND DESIGN

FOR INTERIOR fair is held simultaneously with FOR GASTRO & HOTEL

FAIR

Period: 29th September – 2nd November, 2016

Venue: Prague 9 – PVA Letnany

Organizer: ABF Co.

FOR INTERIOR 2015 IN FIGURES

Total number of exhibitors 487

Total net exhibition area 12 625 sqm

Total number of visitors 30 000

(together

with FOR

GASTRO

fair)

This fair is primarily focused on public – final customers (B2C event)

Detailed information on FOR INTERIOR in English can be found on the

internet website www.forinterior.cz

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8. CZECH FURNITURE ASSOCIATION

Association of Czech Furniture Manufacturers was founded in 1997. Main target

of the association is to promote and represent interests of companies involved in

development, production and sale of furniture.

The association has almost 70 members, majority of them are furniture and

accessories producers based in the Czech Republic.

Contact address of the association is:

ASSOCIATION OF CZECH

FURNITURE MANUFACTURERS

Office:

Na Poříčí 12

110 00 - Praha 1

E-mail : acn@czechfurniture.com

www.czechfurniture.com

Telefon : +420 222 313 640, +420 777 294 404

Fax : +420 222 313 640

Details on CZ association of furniture and directory of its members can be

viewed on the internet website www.czechfurniture.com

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9. SUMMARY

CZ is net exporter of furniture for homes and offices made of wood, metal

or plastics (HS 9403). Exports in 2015 reached 733 mil. USD while imports to

CZ 460 mil. USD.

Furniture is imported mostly from Poland (market share of 24,3 % in 2015),

Germany (22,1 %), China (12,4 %), Italy (6,2 %), Slovakia (7,5 %). Imports of

HS 9403 from Thailand reached 942 thous. USD in 2015 (mainly wooden

furtniture for homes).

According to latest research of INCOMA GfK market research agency, more

than two thirds of Czech customers prefer buying furniture in large

specialized stores. Key players on the Czech market are 7 large international

chains stores selling furniture and home accessories, such as IKEA, KIKA,

JYSK, ASKO etc.

Some of big Czech furniture producers have networks of their own retail stores

and showrooms, such as companies TON or JITONA.

Big international companies import furniture directly through their purchasing

departments (centralized for whole Europe in their countries of origin). Thai

furniture and accessories can be found in large international stores, such as

IKEA (IKEA is buying furniture through centralized purchasing department in

Sweden).

Average spending for furniture in 2015 by Czech customers was CZK 14 850,-

The average time of utilization of these kinds of furniture is almost 20 years

in CZ, whereas in advanced countries of the EU it is 10 years on average, and

then the futniture is replaced by new one. With the growing standard of living,

the period of utilization of furniture will decrease in the Czech Republic.

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10. OPPORTUNITIES FOR THAILAND

We can see opportunities for Thailand especially in wooden furniture made of

exotic wood. Currently, teak wood is getting more popular in the Czech

Republic – not only for garden furniture as in the past, but especially for indoor

furniture (furniture for dinning rooms, living rooms etc.). From cheaper

materials, in CZ we can see potential for furniture and accessories made of

rubber wood (especially kitchen tables, chairs, accessories etc.). Also rattan

furniture and water hyacint furniture have their customers in CZ, however

currently rattan furniture is imported mostly from Indonesia due to lower price.

Apart from teak wood, other kinds of exotic wood (such as rose wood) are

totally unknown among Czech consumers. More education and promotion is

necessary in order to increase consumers awarness. As exotic wood is attractive

alternative to traditional woods used in CZ (oak, pine, beech), there is potential

for Thai companies in this segment.

The first step for Thailand to take, should be connected with making furniture

from Thailand better known, for example by attending fairs held in the Czech

Republic, by co-operating with domestic importers and wholesalers, establishing

contacts with furniture associations etc.

When considering the fairs, we would recommend for Thai exporters to join the

MOBITEX INTERNATIONAL FAIR, that is held in the city of BRNO

MOBITEX is the most biggest furniture fair in the Czech Republic.

As the furniture market in the Czech Republic is dominated by 7 big

international players, we can see more chances in modern trade, such as e-

commerce (furniture e-shops).