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    Markets at a Glance


    © International Trade Centre, International Trade Forum - Issue 2/2000

    Consumers look for quality, durability, functionality and comfort as well as price.

    ITC's Market Brief Programme offers short, structured overviews of export markets for a wide range of goods. Highlights from three market briefs are featured, along with news about ITC's Market Brief Programme.

    Niches in the EU Wooden Furniture Market

    Wooden furniture exports to the European Union (EU) continue to be a lucrative market for developing country exporters - provided that countries sustain their production of rubberwood resources.

    The European Union is the world's largest importer of wooden furniture for households, accounting for nearly half (47%) of total imports worldwide. Eastern Europe and Asia are increasing their shares in the EU wooden household furniture market, worth US$ 54.5 billion in 1998. (The EU is also an major re-exporter of wooden furniture, which is an opportunity to reach new export markets.)

    Exporters looking for market niches would do well to develop bedroom furniture and other household furniture, and avoid kitchen furniture. Wooden kitchen furniture remains the province of intra-EU trade (with only 8% of market share for non-EU countries), because of a strong reliance on local suppliers for fitted kitchens. Over the period 1994-1998, bedroom furniture imports from non-EU countries grew by an average value of 11.2%; imports of other household items from non-EU countries grew by an average value of 14.2%.

    Consumer preferences include quality, durability, functionality and comfort. Quality is especially important if exporters seek long-term relationships with importers, as top-end buyers are demanding more and more quality for the same price.

    Consumer tastes are moving towards lighter woods like beech, birch and maple. However, cherry, teak and other dark woods continue to be in vogue, reflecting trends of nostalgia and warmth. A move away from laminates and veneers, towards solid woods, is also under way.

    Rubberwood, however, is the main source for wooden furniture. In fact, 70% of EU imports are rubberwood-based. Because of its even texture and light colour, rubberwood (properly known as heveawood) can be stained and finished to match the appearance of mahogany, cherry, walnut and oak. Rubberwood is also likely to continue to meet the EU's stringent environmental requirements.

    Household furniture is mainly sold in specialized furniture stores. Do-it-yourself stores and mail order firms, however, are increasing their market share for low quality items. In addition, large showrooms have increased their shares of sales between 15% and 20% (depending on the country), at the expense of purchasing groups.

    Key to future exports: sustainable rubberwood supplies

    A rising number of affluent older Europeans, an emphasis on quality, an increasing number of two-income households and a new boom in housing construction are all trends which point to continued demand for wooden household furniture.

    Ensuring sustainable rubberwood supplies is essential to continued export growth in this sector. Environmental experts note dwindling supplies of rubberwood, and question whether the present growth rates can be sustained over the medium term.

    The Time is Right for Gum Arabic

    Gum arabic is a market with excellent prospects for sub-Saharan African countries.

    Production is stable; demand for natural food products is growing rapidly; and no substitutes match it for quality or cost. After several years of decline, world imports of gum arabic have increased by 25% over the last four years.

    A handful of countries dominate trade in gum arabic. In 1998, 95% of world exports came from three countries: Sudan (56%); Chad (29%); and Nigeria (10%). Likewise, imports were concentrated in three countries: France is the largest importer (46%) and re-exporter, followed by the United States (21%); and the United Kingdom (12%).

    The case of Chad shows that new competitors can successfully enter the market or expand market share. Chad's share in the market jumped from 5% ten years ago, to nearly 30% today. Producers looking for niche market opportunities should consider South American and Asian markets such as Argentina, Brazil, China, Mexico and Pakistan.

    Gum arabic production is concentrated in the "gum belt", which includes most sub-Saharan countries. It is extracted from acacia senegal and acacia seyal trees, the former being of a higher quality and consequently more expensive. Its principal uses are as a food additive (pastries, candy, wine, low-calorie foods and soft drinks are among the more common uses); as a pharmaceutical component (capsules); and as a glue or stabilizer for a variety of industrial uses (ranging from stamps to printing, painting and ceramics).

    Fresh Pineapple: Keys to the European Market

    Globally, the pineapple market is expected to rise by 35% over the period 1995-2005.

    The European market is the leading market, with 40% of total imports, followed by the United States and Japan. While the major producers are Thailand, the Philippines, Brazil and India, their products are either consumed domestically or exported as processed products. Main suppliers to the European market are Côte d'Ivoire and Costa Rica, which has gained market share due to the popular hybrid MD-2 pineapple. Ghana also has been a player of note in recent years. The country tripled its supply between 1993 and 1999, capitalizing on maritime transport for roughly half of its exports.

    To improve pineapple exports, especially in Africa, producers need to concentrate on packaging, transport and trade promotion in order to capture a portion of this growing market. They also need to diversify their supply in order to exploit market niches such as "fresh preparation", corresponding to consumers' needs. Distribution is led by supermarket hains, except in Italy, but specialized importers are still the "intermediary". They offer room for developing countries which are ready to supply attractive products in both appearance and taste.

    Europeans seek a high-quality product with extra-sweet taste and golden appearance. Consumers admit that while they enjoy eating pineapples, they find them difficult to prepare. They also express a need for better information as to storage and ripeness. Fresh pineapple is not a common purchase, and prices are still high compared to local fresh fruits. Therefore, it is important to educate and inform the consumer to make the pineapple a regular purchase.

    The expected increase in demand, coupled with an expected acceleration of growth in fresh pineapple supply, will put downward pressure on pineapple's prices in the years to come. This challenge can be met by designing information campaigns targeted to European consumers, who are expected to have a steady increase in per capita income.

    The Changing Orientation of ITC's Market Brief Programme

    ITC is steering its Market Brief Programme to become more partnership-oriented, and to develop greater coverage of emerging market economies.

    For over ten years, ITC has published market research briefs about products and markets with export potential for developing and transition economies. These succinct studies provide an overview of market size, segmentation, characteristics, competition, access barriers and contacts.

    Market-driven research

    The Market Brief Programme now focuses on five product groups:

    • Apicultural products.

    • Automotive components and accessories.

    • Fruits and vegetables.

    • Secondary wood products.

    • Spices and culinary herbs.

    Market demand drove the selection process. The five groups were whittled down from an initial list of 100 product areas. Among the criteria used: frequency of inquiries received by ITC's Inquiry-

    Reply Service over a two-year period; top exports of least developed countries; frequency of keywords in 900 reports from trade institutions worldwide, assigned by ITC's Trade Documentation Centre; and rank of products imported by 19 emerging market economies. Feedback from ITC's Market News Service and the Joint Integrated Technical Assistance Programme (ITC-UNCTAD-WTO) were also taken into account.

    New focus on emerging markets

    ITC is progressively expanding its coverage of emerging market economies. Defined as developing countries with total imports above US$ 10 billion, these are promising import markets for developing country exporters.

    Traditional research on developed country markets will continue; the emerging markets focus is a complementary one.

    Partnerships in view

    The source of ITC market briefs is changing as much as the content. Traditionally prepared by ITC staff and consultants, the programme now reaches out for contributions. The aim is to build on and disseminate existing studies; and to develop new market briefs in partnership with trade support institutions in developed countries; as well as a network of specialized journalists, academics or consultants in emerging market economies.

    ITC seeks partnerships on three fronts:

    • Web site portal on market briefs. Where market research publications in developed countries are under way, ITC offers its services as a portal to disseminate the information to a global audience of trade professionals.

    • Joint market briefs. ITC is looking to work with trade support institutions, university programmes, consulting firms, professional associations, chambers of commerce and other similar institutions to jointly research and publish market briefs.

    • Writers' network in emerging economies. ITC is developing a network of writers in emerging economies to cover market opportunities in domestic or neighbouring markets. w

    For more information, contact ITC's Market Brief Programme at mb@intracen.org

    This article was written by Natalie Domeisen with contributions from ITC's market brief staff: Nourane Doyen, José da Luz, May El-Darwish. Market brief research was conducted by Nourane Doyen, Pierre Buffet and Didier Muller.