China’s exporters turn to the domestic market, but can it offset coronavirus demand shock?
- Beijing is hopeful its 1.4 billion consumers can help plug the gap caused by a plunging overseas demand for products
- China’s exports fell 7.7 per cent in the first five months of 2020, while imports fell 8.2 per cent to US$763.6 billion, showing weaker domestic demand
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.
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“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.”