Significant potential, but lack of “market infrastructure”

When mentioning Vietnam’s wood industry, exports typically take center stage. In 2025, exports of wood and wood products reached around $17.3 billion, with Vietnamese products shipped to more than 160 countries and territories, including major markets such as the U.S., the EU and Japan.

The domestic market, by contrast, remains relatively underdeveloped.

According to Ngo Sy Hoai, secretary-general of the Vietnam Timber and Forest Product Association (VIFOREST), with average annual spending of around $50 per person, the domestic wood and furniture market is currently worth about $5 billion.

Some studies estimate the actual market size at nearly $7 billion, with the potential to surpass $7.3 billion by 2030 if annual growth is sustained at 7-9%, he added.

The market could expand further through green public procurement, social housing development and the biomass energy market. With a population of more than 100 million, rapid urbanization, and rising demand for better living spaces, Vietnam’s domestic market is clearly no small opportunity, he said.

The question, he noted, is how much of that opportunity local businesses are actually capturing.

Le Duc Nghia, chairman of An Cuong Wood JSC, said the domestic market should not be viewed as a “lifeline” when exports come under pressure, but as a standalone market requiring its own strategy for branding, distribution and services.

That is no easy task because the domestic market has characteristics that differ significantly from export markets. While export products are often mass-produced to standardized designs, the domestic market is far more customized, with numerous small, individual orders. At the same time, distribution networks remain complex and unstandardized, making it difficult for businesses to optimize costs, he stressed.

According to VIFOREST, the biggest bottleneck is not necessarily purchasing power but the lack of “market infrastructure.” Data on businesses, products and market size remains fragmented, while standards, certification, traceability and information disclosure systems are not yet fully integrated.

Nghia said Vietnam should move quickly to establish quality standards and labeling systems for wood products sold domestically. These would not only help consumers identify products but could also serve as a foundation for public procurement.

This should be accompanied by industry databases, certification mechanisms, traceability systems and platforms connecting supply and demand, gradually building a more professional and transparent domestic wood market, he added.

From “lifeline” to a growth pillar

Developing the domestic market does not mean moving away from export ambitions. In 2020-2021, Vietnam’s wood industry faced a Section 301 investigation by the U.S. government. One issue raised during the process concerned Vietnam’s imports of tropical timber, or so-called high-risk timber, for domestic consumption.

Although the case did not directly involve timber used in exported products, it highlighted how a lack of transparency over raw-material sources in the domestic market could ultimately spill over into the industry’s reputation and export operations.

Developing the domestic market around legal timber, stronger traceability and greater use of domestically grown plantation timber will therefore not only create additional demand but also strengthen the foundation for exports.

Experts have also called for promoting the leading role of green public procurement by prioritizing legal, low-emission wood products in public projects, in line with Vietnamese law and the country’s international commitments.

Beyond market development, Vietnamese businesses must also retain control of the segments that generate the highest value added.

According to Vu Hai Bang, CEO of Woodsland JSC, the wood industry’s value chain extends beyond manufacturing and sales to include design, distribution, installation and after-sales services.

If companies focus solely on manufacturing while leaving these segments underdeveloped, foreign businesses could potentially enter and capture higher-value parts of the market, he said.

Domestic market development, therefore, should be viewed as more than a question of how many products can be sold. It is also about who controls the brand, design, distribution network, services and the largest share of value added across the chain, Bang noted.

Digital transformation is another key tool for tackling the cost challenge. At An Cuong Wood, digitizing management processes has helped the company improve operational efficiency and expand profit margins by 2-3 percentage points, without a corresponding increase in headcount.

This is particularly important in the domestic market, where businesses face numerous small orders, diverse requirements and complex distribution networks. Connecting customer, product, order, logistics and production data can help companies cut administrative costs, shorten response times, and customize products more effectively.

At the industry level, a shared database covering businesses, products, raw materials, and markets could also address today’s fragmented information landscape.

In 2025, Vietnam’s forest-product exports reached $18.33 billion, up 5.6% from 2024. In the first seven months of 2026, the figure hit $10.81 billion, up 4.6% year-on-year. Exports will therefore remain a key growth driver for the industry.

But the sheer scale of exports makes an equally strong domestic market all the more important as a counterweight.

The goal of pushing Vietnam’s domestic wood and furniture market beyond $7.3 billion by 2030 is therefore about more than revenue. More importantly, it is about building a market with clear standards, reliable data, robust traceability, professional distribution networks, and greater value added for Vietnamese businesses.

If that happens, the domestic market will no longer be a “lifeline” whenever exports come under pressure. Instead, it could become a genuine pillar of growth, strengthening the industry’s resilience to global trade disruptions while keeping more value within Vietnam.

The challenge facing Vietnam’s wood industry is not to choose between exports and the domestic market, but to build a sustainable balance between the two, creating two pillars for the industry’s next phase of growth.