Thai furniture manufacturers should improve their standards, quality and design as domestic consumers now have a wide range of high-quality foreign products at competitive prices. Ikea will make Thai rivals want to make safe products for consumers, says Mr Kerati.
Kerati Sermpraphasilp, the vice-president of the Thai Furniture Industries Association, said the first Ikea outlet, the Swedish build-it-yourself furniture chain, should drive improvement in the Thai furniture industry.
He said Ikea was the world’s leading furniture producer and it covered the middle and lower segments. Because Ikea offers products that meet European standards, Thai producers will have to improve their standards to compete.
Construction on Ikea Bang Na was scheduled to be completed last month with interior decoration slated for July.
Mr Kerati, also chief executive of S.P.S. Intertech Co, believes Ikea will make Thai manufacturers want to build safe products for consumers without being forced to do so by regulations. There are few safety requirements or quality standards for Thai furniture products. Local producers in general are reluctant to consider safety regarding their products, except for exporters who must meet the standards of their export markets.
He said there were still some furniture products made locally that were dangerous to children because they were contaminated with lead or another toxin during production or via a raw material.
But he added that Thai consumers were no longer willing to compromise on safety for price so producers have to adapt. This new generation of Thai consumers is also more concerned with the environment.
Ikea’s designs are likely to challenge Thai producers to innovate.
More than 20 Thai producers supply products to Ikea ranging from ceramics for house decoration to table sets.
S.P.S. Group was recently named a major supplier to Ikea with a six-year, 18-billion-baht contract.
Mr Kerati also noted Thai entrepreneurs should look for more opportunity in the region when Asean becomes a single market in 2015.
He believes Thailand has a competitive edge over its neighbours because of its location, but Thai entrepreneurs need to develop their knowledge and innovation.
The domestic furniture industry is estimated to be worth 20 billion baht this year.