Domestic retailers give exporters boost

In the face of Washington’s escalating tariff war with Beijing, China’s e-commerce platforms and retail enterprises have been leveraging their respective strengths and helping foreign trade enterprises expand their domestic sales channels.

Analysts said such action will provide a much-needed boost to export-oriented businesses that face temporary challenges due to the ever-changing tariff policies of the United States, and also contribute to the further development and diversification of China’s domestic consumption market.

While profound changes in the external environment have caused adverse effects on China’s exports, foreign trade companies should actively explore diversified markets and innovate sales channels to keep foreign trade stable, said China’s Premier Li Qiang on April 15 when inspecting a local exhibition promoting the domestic sales of foreign trade firms in Beijing.

Li stressed the importance of guiding enterprises to leverage their unique advantages for differentiated development. By constantly innovating their products and services, companies can enhance their competitiveness and create new demand through quality supply, he said.

Prior to Li’s remarks, e-commerce and retail companies had fleshed out plans to assist foreign trade firms in broadening domestic sales channels, such as opening green channels, joining hands to develop new products, and pooling marketing resources.

Chinese e-commerce platform JD announced on April 11 the launch of a 200 billion yuan ($27.3 billion) export-to-domestic sales support plan to assist foreign traders expand their reach within the domestic market.

The company will establish specialized sales zones for foreign trade products, and leverage its extensive user traffic and multichannel marketing support.

On the heels of JD, Chinese tech heavyweight Baidu announced on April 12 that it will utilize its artificial intelligence technology and platform traffic resources to prioritize the support of 1 million export-oriented enterprises in strengthening their presence within the domestic market.

E-commerce company East Buy also said on April 12 that it will launch a dedicated “premium foreign trade products” initiative to help more high-quality export-oriented products reach Chinese consumers through its livestreaming channels.

In addition to online platforms, Alibaba’s supermarket Freshippo and supermarket chain Yonghui Superstores have unveiled similar steps, opening green channels for foreign trade enterprises to stock high-quality products on their shelves.

Pesitro Healthcare Products Co, an oral care products manufacturer located in Yangzhou, Jiangsu province, and a long-term supplier to Walmart in the US, has had its cooperation with US retailers come to a near-standstill due to the tariff hikes initiated by Washington.

“When the US government first imposed a 20 percent tariff on Chinese goods, we were able to negotiate with our US customers and each side bore half the tariff cost,” said Mu Longsheng, the company’s marketing director. “But now that the tariffs have risen to 145 percent, it has become impossible to continue cooperation, as our profit margins are only around 10 percent.”

In response to the challenging external environment, the company is intensifying its cooperation with European clients to expand its overseas market presence. It has also refocused on tapping into the domestic market, forging a partnership with Yonghui Superstores.

“After seeing Yonghui’s announcement, we immediately sent an email and received a response the very next day,” Mu said. “We have begun discussing the details of product orders with Yonghui and will certainly leverage our high-quality export expertise to serve Chinese consumers.”

Ma Zengrong, vice-president of the China Federation of Logistics &Purchasing, said, “The key priority of this initiative is to resolve the issues on the market end, helping foreign trade enterprises gain better access and visibility within the Chinese consumer market.”

China has been pushing the integrated development of domestic and foreign trade since 2021, with ongoing efforts made to ensure lines, standards and quality are consistent among domestic and foreign trade products, and to reduce the cost of product interchange in domestic and foreign markets.

The confidence behind this initiative stems from the strength and resilience of China’s industrial and supply chain ecosystems, which are not dependent on the economic order led by the US, Ma said.

In the first quarter of this year, China’s foreign trade with the US expanded 4 percent year-on-year to 1.11 trillion yuan, despite disruptions from the US administration’s reckless tariff policies, data from the General Administration of Customs showed on April 14.

Lyu Daliang, spokesperson for the administration, said the domestic market is key for China to manage the current situation.

“It is true that our exports are currently facing a complicated and challenging external situation, but ‘the sky is not falling’,” Lyu said. “China’s vast domestic market is a crucial stronghold that we can rely on.”

China is steadfast in focusing on its own development agenda, leveraging the certainty of its domestic market to address the uncertainties posed by the external environment, Lyu added.

During the 5th China International Consumer Products Expo, which ended on April 18 in Hainan province, the Ministry of Commerce launched a campaign promoting quality export-oriented products, which targeted 10 provincial regions with sizable volumes of foreign trade and consumption.

The ministry will hold a series of matchmaking activities to help foreign trade enterprises tap into domestic sales channels, and put in place an integrated service platform.

In an effort to address the inconsistencies in standards, labeling and pricing between export and domestic products, the ministry, along with market regulators and customs authorities, will implement a certification system to facilitate the seamless transition of export goods into the domestic market.

The transition from export to domestic sales for foreign trade enterprises is a choice driven by the current external trade situation. But it also represents an important opportunity to propel the upgrading and transformation of China’s domestic consumption market, analysts said.

China put boosting consumer spending as its top priority in this year’s Government Work Report, emphasizing the need to boost the supply of quality products.

“With the ongoing consumption upgrade trend, China has a wealth of opportunities to expand its domestic market, provided that we have a steady supply of new, high-quality products that meet the demands of our consumers,” said Peng Jianzhen, president the China Chain Store &Franchise Association.

Many export-oriented products introduced to the Chinese domestic market have already proven successful in developed countries, and with some tailoring to local consumer preferences, they hold significant potential for growth, Peng added.

“It’s not as simple as just bringing export goods into the domestic market,” Peng said. “The key is to work together with major supermarket chains and e-commerce platforms to develop products that are tailored to the current stage of consumer demand.”