Canada is a large producer, but it still imports about half of its demand in the furniture segment
By Sérgio Siscaro
The opportunities for commercial exchange between Brazil and Canada are quite varied, covering different sectors and fields of activity – but they are not always properly explored by the two countries. One such possibility is the Canadian furniture market. Currently ranked 11th among the largest furniture markets in the world, the country recorded sales of US$ 28 billion in 2020.
The country is a large furniture manufacturer – this industry contributed CAD 4 billion to the Gross Domestic Product (GDP) in 2020 – but it is also a major importer of these products. The market is dominated by foreign companies, and international purchases in the furniture sector represented 50.5% of the total in 2020. China has been one of the main furniture suppliers to the country.
Extremely fragmented, the Canadian market is mostly made up of small and medium-sized family businesses – which face challenges with high transport and labor costs, often making them less competitive than companies from other countries.
The dynamism of the sector was evident in the last year. Because of the new coronavirus pandemic, people around the world have spent more time at home to avoid contamination; thus, building a more pleasant environment at home led to an acceleration in the rate of growth in furniture sales. In the case of the Canadian market, this trend led to the greatest expansion in 12 years – with an emphasis also on the demand for furniture for home offices, driven by the growing presence of companies that enable their employees to work in a home office regime.
There is considerable room for other international players to enter the Canadian market – and Brazil could be one of them. Currently, the country still has a shy exchange with Canada in the furniture sector but has been gradually gaining positions in the list of main suppliers.
In Canadian imports of other furniture and its parts (a category that includes those for offices, kitchens and bedrooms, made of wood or metal, among others), Brazil occupied the 13th position in 2020, with exports of US$ (FOB ) 27.9 million. This value is still quite far from those of the two main exporters, which are China, with US$ (FOB) 1.09 billion, and the United States, with US$ 596.35 million, but it shows growth potential in that market.
In a deeper analysis of this data, there is a considerable growth in Brazilian sales falling under the category of other furniture made from wood – which went from US$ (FOB) 1.46 million in 2016 to US$ (FOB) 9, 5 million in 2020 – an expansion of 550%. This makes Brazil the 15th largest exporter of this type of product to the Canadian market.
As in other segments of the Canadian market, furniture is characterized by factors derived from the consumer’s heightened awareness of issues related to social and environmental sustainability. In other words, this public is very attentive to the origin of the items it consumes, and the conditions under which it was produced. There is also a preference for wooden furniture: the Canada Home Furniture Market study already indicated, in 2019, that this material occupied 30% of domestic furniture in the country.
Another trend observed in the Canadian furniture market includes heavy use of e-commerce – Statistics Canada data indicates that e-commerce sales reached US$3.9 billion in May 2020, a 99.3% increase over to the month of February of the same year. In this sense, manufacturers that make as much information available on the internet can have a competitive advantage, positioning their products in a more favorable way for demanding Canadian consumers.
There are also technical specifications that the potential Brazilian exporter must be aware of. The Canadian law governing product safety is the Canada Consumer Product Safety Act (CCPSA); thus, both furniture importers and manufacturers need to ensure compliance with the safety requirements set out in the legislation. In general terms, the main points of attention are mechanical, chemical or flammability risks in the products, with specific standards for furniture for children, labeling and testing, among others.