For a long time, Chinese enterprises have faced a clear divide between domestic and foreign trade. The distinction has been more than just operational—it has shaped the way businesses think and operate. However, with the global financial crisis leading to a decline in external demand, many foreign trade companies are now turning their attention inward. This shift, while promising, is not without its challenges.
To make this transition successful, enthusiasm must be matched with the right platforms. At the end of last year, six major supermarket chains, including BBK and Shandong Jiajiayue, visited Guangzhou and Dongguan to “sweep the goods,†purchasing over 3 million garments in one go. The all-cash transactions caused a stir in the industry. Yet, despite this interest, the lack of proper cooperation platforms made the process difficult. These supermarket CEOs could only negotiate directly with one foreign trade company at a time, making it hard to scale up.
Wang Fei, chairman of Hunan Province’s BBK Commercial Chain Co., Ltd., emphasized that the collaboration between domestic and foreign trade is more complex than just a desire from buyers. Many foreign trade companies lack the motivation to engage with domestic buyers. However, after over 3 million garments sold quickly, Wang became more confident in the potential of the domestic market—provided the right products are offered.
The attitude of foreign trade companies is gradually changing. As international demand continues to shrink, shifting focus to the domestic market has become a necessity for survival and growth. Shang Jinsong, chairman of Shandong Shanhai Glass Products Co., Ltd., believes that by entering the domestic market, foreign trade companies can better share risks. He said, “When one leg walks, it's easy to fall when the road gets tough; with two legs, you move much more steadily.â€
Foshan Qizhi Digital Technology Co., Ltd., which specializes in exporting e-books, adjusted its sales strategy last year. By replacing content with Chinese classical stories and fairy tales more suitable for domestic consumers, the company managed to shift its domestic-to-foreign sales ratio from 3:7 to nearly 5:5.
Government efforts are also playing a key role. At the 105th Canton Fair, the Ministry of Commerce held the first "Inter-Foreign Trade Enterprises Matchmaking Fair," allowing domestic buyers to participate for the first time. This initiative has sparked greater interest among both domestic and foreign trade companies.
Wang Peiyu, chairman of Shandong Jiajiayue Group, invested RMB 300 million to 400 million at this year’s Spring Canton Fair, securing cooperation agreements with dozens of foreign trade companies. In addition to these fairs, the Ministry of Commerce plans to organize the first national foreign trade commodity tour exhibition, offering even more opportunities for foreign trade companies to enter the domestic market.
However, challenges remain. Many foreign trade companies face hidden costs when entering the domestic market, such as high entry fees and various charges that can account for 5–10% of the retail price. Shang Jinsong of Shandong Shanhai Glass Products Co., Ltd. noted that these fees often end up being passed on to consumers.
Some foreign trade companies are hesitant to enter the domestic market due to unfamiliarity with local rules, settlement methods, and the complexity of domestic trade. A toy manufacturer in Shenzhen admitted, “I’m afraid I won’t come out once I step in.†While foreign trade offers timely payments and lower risks, the domestic market brings higher uncertainty.
Another concern is the issue of returns. Unlike foreign trade, where prepayment systems and credit insurance are common, domestic trade involves longer payment periods and higher risks. Teng Xiao of Jiangsu Kaiyuan Group Light Arts & Crafts Import and Export Co., Ltd., pointed out that this adds to the pressure on foreign trade companies.
Shang Jinsong also highlighted the challenge of rebuilding sales channels and brand recognition. For small and medium-sized foreign trade companies, this can be overwhelming. Some malls and supermarkets treat foreign and domestic companies differently, sometimes even suggesting they rename products to English for better acceptance.
In addition, the nature of foreign trade—large orders, fewer batches—clashes with the domestic model, which requires smaller, more frequent orders. A Dongguan Christmas exhibitor expressed frustration, saying, “Domestic orders are too small. We’re not willing to do business with domestic buyers anymore.â€
To support this transition, Wang Fei proposed transforming the Canton Fair into a platform for domestic and foreign trade integration. His proposal was fast-tracked, showing government support. But he and others agree that real success will require active participation from both sides.
“Putting foreign trade products on domestic shelves is no easy task,†Wang said. “Both buyers and exhibitors need to be better prepared, and the trade environment must continue to improve.â€
Shang Jinsong believes that Chinese foreign trade companies must evolve from mere product providers to value creators. They need to build brands, develop channels, and adapt to new market demands.
Many domestic buyers and exhibitors agree that this shift is still in its early stages. While concerns remain, the government is actively working on solutions. Jiang Zengwei, deputy minister of the Ministry of Commerce, emphasized the importance of introducing international distribution models and business practices to help foreign goods enter the domestic market smoothly.
Stripe Velvet,Blue Velvet Material,Velvet Fabric Material,Velvet Fabric Fashion Style
CHANGZHOU CHAOYANG KNITTING CO.,LTD , https://www.cychaoyangknitting.com