Many businesses in timber craft villages have switched their focus to the domestic market in a bid to escape the current economic downturn which has forced foreign importers to reduce spending on timber products.
In northern Bac Ninh Province, there are more than 15 timber trade villages operating, creating jobs for thousands of local labourers.
Wood products from Dong Ky, Phu Khe, Huong Mac and Tam Son have got its trademark and been exported for years.
However, vice chairman of the provincial Timber and Forest Products Association Le Van Cam said many businesses have stopped production or operated in moderation due to the reduction in orders from China, the province's main importer.
In Dong Ky Village, for example, up to 70 per cent of wood products were exported to China. Thus, these businesses are trying to supply wood products to the domestic market.
Chu Van Nhung, owner of a timber enterprise in the village said he used to hire six full-time labourers to produce and deliver products to Chinese partners.
But due to fewer orders, high interest rates on bank loans and increasing costs of materials, he last year began to sell his products to domestic consumers.
Now, a large number of his products are sold in northern and central regions.
According to the village's estimation, up to 90 per cent of wood products will be consumed domestically this year and the rest exported.
Nguyen Ton Quyen, general secretary of the Viet Nam Timber and Forest Product Association said the domestic market had been left wide open with the increasing demand of timber products for hotels, offices and new urban areas.
A survey conducted by the association in the last six months of 2012 among 200 households showed that each family spent about VND6 million (US$288) on average for wood furniture.
Senior expert of non-profit organisation Forest Trends said that although trade villages' wood products were diversified, the industry lacked policies for sustainable development.
Speaking at a conference on Thursday in the same province, To Xuan Phuc said that most businesses were households with small-scale production.
He was citing a survey of five trade villages in the Mekong Delta region - including Dong Ky, Van Diem, La Xuyen, Lien Ha and Huu Bang.
Moreover, there were no connections between these households, which led to unfair competition such as skipping production steps to reduce the cost price and increase profit.
These businesses also took little care of the quality assessment and origin of timber materials - compulsory elements for good-quality products following the international criteria, he said.
According to experts, businesses should link with each other by joining an organisation to find better sources of timber materials and work on larger production orders.
The ministry of Agriculture and Rural Development has required the Forest Protection Department to build an inspection system on the origin of timber materials to improve the quality of wood products, the conference heard. Currently, Viet Nam has 302 timber trade villages. These villages supply more than 80 per cent of wood furniture and wood building materials for the domestic market with total turnover of $1.5 billion annually.
About 50 per cent of the villages are located in the Red River Delta, creating jobs for 300,000 labourers.