More mainland manufacturers are focusing on 'Sold in China' than 'Made in China' to counter slowing growth in exports.
Mainland exporters are starting to sell products to the huge but challenging domestic market to counter lukewarm export growth, research by Li & Fung and the Chinese Academy of Social Sciences has shown.
Clouds are gathering over economies in Europe and the United States, with a softening of trade resulting in mainland export growth slowing to 4.9 per cent year-on-year last month.
While many processing factories in Dongguan have collapsed due to rising land and labour costs, a handful are attempting to shift their focus and leverage to the growing power of domestic consumption.
Many processing factories are owned by Hong Kong or Taiwanese investors.
'The main challenges come with the establishment of sales networks for selling their goods domestically,' Chang Ka-mun, managing director of Li & Fung Development (China), said at a teleconference in Beijing.
Mainland retailers, which have extensive networks throughout the country, have much stronger bargaining power over manufacturers and thus levy high so-called slotting fees to ensure they display their goods.