Vietnam's Wood Industry Eyes Domestic Market to Sustain Growth

Vietnam's wood and wooden furniture industry is making the fulfillment of sustainable development requirements a mandatory condition to maintain its position in global supply chains. The sector has seen rapid growth in recent years, with export turnover of timber and wood products projected to reach about US$17.2 billion in 2025. Key export markets include the US, Japan, China, the European Union, and the Republic of Korea. However, to navigate fluctuations in international market demand and increasingly stringent environmental regulations, Vietnam is focusing on developing its domestic market. This strategy aims to reduce reliance on exports and ensure stable growth for the entire industry. Under Vietnam's one-party system, economic growth serves as a cornerstone of legitimacy, making the success of export-led development a critical policy objective. The wood industry is no exception, with the government actively promoting policies that prioritize sustainability. This not only helps meet the environmental standards demanded by major markets like the EU but also enhances Vietnam's international image. Recent reports indicate that Vietnam attracted over US$38 billion in registered foreign direct investment (FDI) in the first half of 2026, a nearly 58% year-on-year increase. This surge is driven by large-scale, high-tech projects, signaling an improvement in the quality of capital inflows. The wood industry stands to benefit from this evolving investment landscape. Furthermore, Vietnam is exploring opportunities for expansion into international markets through cross-border e-commerce. Concurrently, domestic infrastructure development is progressing, exemplified by plans to expand Terminal 1 of Da Nang International Airport and efforts to enhance QR code payment interoperability between Vietnam and China. These initiatives are expected to streamline logistics, improve consumer convenience, and stimulate the domestic market. The country has also seen robust growth in agro-forestry-aquatic product exports, reaching nearly US$42.8 billion in the January-July period, equivalent to almost 60% of the annual target. Notably, durian exports alone hit about US$1.1 billion in the first six months of 2026, a 32% increase. Sustained growth in the wood industry also necessitates technological innovation and supply chain enhancement. Accelerating mechanization is seen as crucial for reducing reliance on manual labor, improving production efficiency, minimizing post-harvest losses, and ultimately strengthening the competitiveness of the agricultural sector. Source: VietnamPlus English