A lipstick maker in the Chinese city of Yiwu used an online sales platform in some 17 different overseas languages to woo Spanish, Russian, Saudi Arabian, Korean, Japanese, Turkish, and Vietnamese clients, but until this year, had largely ignored the domestic market. Like many other Chinese exporters, Aris Cosmetics tailored its product for foreign buyers, with many requiring a minimum order of 5,000, with unit prices as low as 30 US cents. But after the global coronavirus pandemic wiped out at least 50 per cent of its overseas sales, the company was forced to develop an online retail store in Chinese. “It’s far from enough to cover the losses in the overseas markets, but it’s a start,” said sales manager Xie Xinkuan, who confirmed Aris’ domestic sales had hit around 4 million yuan (US$570,000) so far this year. “For export orders, the production cycle is usually one or two months, but for domestic sales, the production cycle is just one or two weeks.” The change in strategy matches the desire from the government for China’s 1.4 billion consumers to plug the gap caused by a plunging overseas demand for products. The strategy, a catchy phrase in Chinese which translates to “domestic sales of commodities originally produced for export”, was often used as a sales promotion slogan in the 1980s and 1990s when products made for export often had a much higher quality than those manufactured for the domestic market. This year, Beijing is keen to turn to its own domestic market to offset an export crisis and to keep growth and employment on track amid growing tensions with its Western trade partners. The Ministry of Commerce has launched a plan that includes 10 measures to help firms like Aris, including encouraging exporters to display and sell their products online for the domestic market, while also planning trade fairs in Hangzhou, Xi’an and Chongqing to link exporters with domestic consumers. However, the jury is out over whether Chinese consumers have enough spending power or willingness to keep exporters afloat as rising unemployment, falling income and growing household debts have made consumers particularly cautious. China’s exports fell by 7.7 per cent in the first five months of 2020 due to weakened overseas demand as a result of coronavirus pandemic, while imports fell by 8.2 per cent, showing weaker domestic demand. Retail sales in the first five months of the year also plunged 13.5 per cent, with particularly weak discretionary spending on clothing, jewellery and communication devices. Although the outlook for the global economy is gradually optimistic, the current expectation of improvement in domestic demand is still weak Xu Wenyu Exports are expected to fall further as the new export order index in the latest official purchasing manager’s index was 42.6 in June, showing that overseas orders continued to shrink. “Although the outlook for the global economy is gradually optimistic, the current expectation of improvement in domestic demand is still weak,” Xu Wenyu, an analyst with Huatai Futures, said last week. Lu Zhengwei, chief economist at the Industrial Bank in Shanghai, warned that domestic sales of goods originally intended for export could only exacerbate over supply in the domestic market, which is already overcrowded with merchants. Channey Zhan, who runs a ceramic glassware factory in the southern province of Guangdong, has tried to explore the competitive domestic market for many years but has found the process of turning from an export-oriented business difficult as production, marketing and even personnel are designed for exports. “It might be better to start a new career,” said Zhan, who is considering hiring a specialist to manage the domestic market which is now a priority given the global slowdown amid the coronavirus outbreak.