![]() The ministry is looking into how to improve logistics networks to make the transition easier for export firms, state television said recently in a report on the Canton Fair. Be it the quality of the products, the quality of the clients themselves, or the size of the orders, these all tend to be worse than for overseas buyers,” he said.Įven the Commerce Ministry, which has been encouraging the shift to the home market with a range of policies, including allowing domestic buyers into the Canton Fair for the first time this year, admits there are obstacles. ![]() ![]() “At the very least, our prices are 15 percent higher for domestic buyers.”Ī difference in business culture also makes the transition difficult, Gao said. Still, firms face hurdles in focusing on the domestic market, said Michael Gao, a salesman with Chaowei Industry, a maker of electronic gadgets, including talking alarm clocks, based in the southern boom town of Shenzhen.įor one, the tax rebates Beijing offers to spur exports of goods such as textiles and electronics mean that companies are forced to raise prices for their domestic clients, Gao said on the sidelines of the Canton Fair, China’s top trade fair. Retail sales grew 21.6 percent in 2008, helped by growing incomes and government programs to encourage sales of consumer goods in rural areas. While the economy is still overly reliant on investment and exports, consumer demand is still steadily expanding. The high-tech goods sector fell even more sharply, by 23 percent, giving electronics producers an incentive to look to the Chinese market as well. Garment exports dropped by 5 percent in the first quarter from a year earlier, but that was actually less than the nearly 20 percent fall in overall exports in the first three months. “I’m not quite sure, from the ones I’ve talked to, that they quite understand what that will involve.”Ĭhinese exporters in a range of sectors have good reason to look for new markets to offset the drop in consumer demand in North America and Europe, which has taken a hefty toll on their order books. “I think at the moment it’s a kind of panic strategy,” French said. Many are likely to drop out of the race, as they are not ready or able to put up the investment needed to do so. The main routes for clothing companies to break out of the pack will be to go through the laborious and expensive process of building their own brands or buying existing ones, he said. But you won’t have heard of any of them and the only people who sell shirts will still be people who’ve got the brand,” French said. Everyone will do it, and all of a sudden there will be more shirt shops than you can shake a stick at. “It’s an ambitious target because we’ve missed the spring and summer sales season, so we’ll have to hope for the best in the autumn and winter season,” he said.įirms such as Berkam can expect plenty of company, said Paul French, chief China analyst with retail consultancy Access Asia in Shanghai. It aims to sell at least 1 million shirts with the Brioso logo this year via contracted agents, or roughly 10 percent of its current annual output, Chen said. Still, the company hopes that demand for its local shirt line will soon start to make up for the drop in export orders caused by the global slowdown. “We’d been thinking of doing so for some time, but that gave us the final push to decide to launch our own brand,” he said in a spacious conference room in the factory, located in Dachen, a major center for shirt makers in eastern Zhejiang province.īerkam plans only a gradual shift away from manufacturing shirts for Western brands, as an abrupt shift in the firm’s business model would be too risky. and Europe last year and saw how bad the situation there really was, so that made us determined to focus more on the home market,” said Chen Jianguo, the company’s vice chairman. Zhejiang Berkam Garment Co, a clothing company that has long manufactured shirts for Western brands such as Italy’s Benetton, recently launched a domestic line of men’s shirts under the label “Brioso.” Yet exporters of goods ranging from apparel to electronics are hardly finding a fatted calf laid out for them.ĭespite a track record in manufacturing products to global standards for leading brands, many are finding it tough to tap into China’s domestic market due to cut-throat competition, lack of local brand names and poor domestic distribution networks. A worker sews shirts at a workshop of Zhejiang Berkam Garment Co., which is trying to tap the domestic market now that export orders are falling, in Dachen, Zhejiang province, April 23, 2009.
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