The arrival of IKEA in Mexico in 2020 has meant a challenge for the national furniture industry, more than a competitor. Mexican companies have found a new format to produce and be able to respond to the demand for furniture such as those that the Swedish chain sells in its different markets.
Teresa Calderón, who chairs the Association of Furniture Manufacturers of Jalisco (Afamjal), explains that, initially, the players in the sector thought how they were going to face such great competition, however this is now an opportunity.
“We were not used to manufacturing our products in a certain way, but we Mexicans are very easy to adapt to. IKEA is giving us a challenge, all furniture producers are finding a different production format and I think we will be able to protect ourselves. It will not be 100%, this must be little by little and according to the capacities. It is not a fear, it is a challenge”, affirms Calderón.
The challenge, states the industry representative, was to teach members to respond to market demands, considering the quality and formats of furniture that are in demand, up to the presentation of the products.
IKEA opened its online store in October 2020 and in April last year it cut the ribbon for the first store in the country, in Mexico City. The Swedish company, which is run by Malcolm Pruys in Mexico, is preparing to inaugurate its second unit in Puebla and, since its arrival in the country, has sought to add local suppliers that are supportive in maintaining the stock of products and, at the same time, allow offering better costs to buyers.
Roberto Quiñones, coordinator of Expo Mueble Internacional, points out that representatives of the company in 2019 approached the producers to add them to their chain, however, for Mexicans, becoming a multinational supplier means making changes in their production mechanisms.“ A team of two people always goes, they take their catalogs and invite us and they don’t stop being there”, he points out.
Until now, there is a company in Jalisco that has joined as a supplier of mattresses for the United States and Canadian markets, although the organization is not aware of other similar cases.
“We have a format and a way of producing, when you want to work with IKEA you can maintain your same format on the production lines with different characteristics of forms of assembly, of packaging. As an entrepreneur, anyone can be your supplier, but you have to think of an alternative to the normal mode of production”, adds Calderón.
With an eye on exports
If there is a market that gives a boost to the Mexican furniture industry, it is exports and, to guarantee this growth, Afamjal is promoting the creation of a certificate of origin with a variant: that it considers the percentage of supplies that come from the United States and Canada, such as wood and fabrics.
Calderón affirms that, as part of the beginning of this request, the industry has already initiated contacts with the companies that supply the raw material that are outside of Mexico, so that the regional content is considered, within the framework of the T-MEC. “Normally, to have a certificate of origin for a Mexican product, it has to have 50% national product, the other percentage can be considered an import, and we want our product to come out with its certificate of origin with the inputs from the three countries and that we have the right to the certificate of origin”, he maintains.
Roberto Quiñones adds that, in addition to the growth in demand in the US market, where clients are hotel chains, some states have relaxed their export regulations, which also opens an opportunity for the shipment of Mexican furniture.
Added to this is the search for price control. In furniture made in Mexico, the wood, fabrics and finishes are imported, although with the increase in containers, the sector has also turned to the local market to lessen an impact on costs. “There is a natural increase and, in addition to us producers, trade also has a leading role in this situation of rising prices. We have to agree on how we are going to avoid increasing so much”, he declares.
And the projections are to grow. In 2020, the increase in sales was 5%, according to data from the association, and the goal is that by 2021 it will be 7%. The industry concentrates 2,243 businesses, of which 95% are micro and small companies.
