This report provides an analysis of the performance of the table and dinnerware industry across two key Asia markets last year, and offers forecasts for this year. It is produced by the Hinrich Foundation, a development organization that aims to promote sustainable global trade by, among others, helping create jobs in emerging Asia.

To better cope with more intense competition in 2014, the table and dinnerware industry in Asia received different types of assistance from various sectors locally and internationally. Governmental and private organizations in India and Vietnam have started to implement various projects aimed at improving capabilities of suppliers in their respective countries to further ensure development.

In India, the Ministry of Micro, Small and Medium Enterprises has established the Micro and Small Enterprises Cluster Development Program. This scheme groups enterprises into separate production units, depending on the line they are involved in and their geographical location. Each unit is assessed in terms of technological level, QC upgrade, accreditation and certification, and market research. Makers within each unit collaborate on similar manufacturing and marketing activities, and share knowledge and resources. Competitiveness is strengthened because enterprises are near each other.

Furthermore, the national administration has set up Common Facility Centers in each cluster to enhance familiarity in and boost R&D and exporting.

In Vietnam, trade associations have partnered with support groups from abroad in an effort to keep designs abreast of foreign demand. As an example, the Vietnam Handicraft Exporters Association is working together with the EU's Switch-Asia initiative, which provides a number of programs intended to advance suppliers' design, material selection and marketing skills. A specific scheme under Switch-Asia is Sustainable Product Innovation, which aims to enhance the manufacturing and promotional capabilities of at least 500 companies in five export sectors. The table and dinnerware industry is among these segments.

Exports

Outbound shipments of table and dinnerware in 2014 continued a general upward trend that has been taking place over the past few years. Exports jumped 10 percent in India, with the US accounting for more than one-third of total turnover. The increase, however, was driven by surging demand from Eastern Europe, particularly Poland, Romania, Slovakia, Bulgaria and Latvia.

In Vietnam, both segments consisting the table and dinnerware sector improved at a roughly equivalent rate last year. Sales of ceramic and porcelain models went up nearly 9 percent. Revenue from bamboo, rattan and seagrass items grew by about 8 percent. The increase was a result of a larger number of suppliers that began to venture into exporting in the previous year.

Traditional markets such as the US and the EU are also increasingly branching out to alternative sourcing hubs instead of relying only on China. In addition, the Asia-Pacific region is transforming into a major destination for the industry. Key markets here include Japan, South Korea, Malaysia and Australia.

Price and product design trends

The cost of raw materials was the main factor that affected prices in 2014. Quotes of stainless steel models moved up over the past 12 months as nickel and copper became expensive by 10 to 15 percent. Prices of products made of plant-derived inputs generally remained the same as supply was largely stable. Design complexity and power expenditure were other significant aspects influencing quotes.

Sustainable models are becoming increasingly common among releases from Asia. Driven by demand for products that have a negligible impact on the environment, manufacturers are focusing on earth-friendly and recyclable materials. Plastic table and dinnerware are gradually being replaced by items in components such as bamboo, rattan, water hyacinth and seagrass. This development is specifically evident in accessories such as placemats and coasters.

Besides the components used, suppliers are emphasizing the eco-friendliness of finishes. Makers are now dyeing products through more natural methods such as forging, heating and smoking. This is a departure from the usual method of using paints and other additives made of toxic chemicals.

Although sustainability is a big catchword in the industry, long-established designs still account for a considerable part of output. Stainless steel models continue to stay popular because of the material's versatility and low cost. Ceramic models are a mainstay in the dinnerware segment because of the material's aesthetic properties.

In terms of styles, nontraditional shapes are becoming more prevalent. An example of this is spun bamboo bowls shaped like a leaf, which are among the best-selling models last year. In conjunction, products that take up less space and have more than one function were seen as emerging trends last year. Multipurpose items include serveware and dinnerware that double as cookware.

Challenges

The insufficient supply of major raw materials was the primary hurdle that faced the industry in 2014. Metals, rerolled steel in particular, have to be sourced abroad because of lack of availability in domestic markets. This input, used widely in dinnerware, drinkware and flatware, is typically imported from China. Over the last five years, procurement of this material has gone up nearly 40 percent.

Even models made of natural components face material shortages. Due to exploitation and deficient forest planning, inputs such as rattan and bamboo need to be purchased elsewhere in Southeast Asia. This development is expected to continue worsening although efforts are currently underway to mitigate the illicit use of forest resources. This is because demand for products made of such materials is not expected to slow down over the next few years.

Underdeveloped design capability was another challenge that significantly confronted the industry. Because most products are made under OEM orders, suppliers do not have plenty of opportunities to create their own styles and expand in-house collections. In addition, being SMEs, many companies have limited access to design trends in key markets overseas.

2015 Outlook

Prices of table and dinnerware are seen to remain largely stable in 2015. Suppliers expect shipments to traditional markets to grow even more as these economies shed further the effects of the global economic crisis. Despite increased demand, quotes will stay unchanged to entice repeat customers. Competition with other sourcing centers is another factor keeping prices level.

Manufacturers are optimistic about their export performance this year, as bright spots are seen in the EU, the US and Asia-Pacific. Some companies, in an attempt to broaden their market reach, will expand into alternative destinations such as Eastern Europe and the Middle East.

Models made using sustainable materials and processes are still expected to lead the line. In terms of design, items with more decorative elements will account for the bulk of production. These include cutlery with fancy and intricate trimmings and contours, and serveware and dinnerware featuring novelty motifs.

Difficulties encountered in 2014 are seen to persist this year. Nonetheless, suppliers are hopeful that steps taken to alleviate these problems will have a positive effect. In Vietnam for instance, various industry organizations are addressing the shortage of natural materials by funding the research, breeding and technical upgrading of bamboo and rattan cultivation. This program is being implemented in 22 cities and provinces across the country.

For more information about the Hinrich Foundation's industry-specific sourcing reports spanning seven different countries in Asia, visit Online Developing Country Sourcing.

This article and its contents are provided by the Hinrich Foundation, a partner of Global Sources in promoting trade across Asia. The products and the suppliers featured in this article are export assistance program beneficiaries of the Hinrich Foundation.