Shandong exporter explores domestic market

(chinadaily.com.cn)| Updated : 2020-08-17

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At the beginning of the year, Zhang Jiguo did not expect the foreign trade "winter" to last so long.

As the chairman of Polygrace Group, a leather furniture manufacturing enterprise in Zibo, Zhang has experienced many challenges in the past six months, such as the difficulty of workers returning to work due to the COVID-19 pandemic, raw materials shortages, delayed deliveries of foreign orders, and a sharp drop in overseas market demand.

"At the height of the global pandemic, our orders fell by 40 percent, a level not seen in more than 20 years," said Zhang.

Although the company is now back on track, Zhang has no shortage of long-term worries. He noted that while the impact of the COVID-19 pandemic on the global economy will be relatively brief, the more far-reaching impact will come from the profound changes in the post-pandemic global landscape.

"We have been dependent on foreign markets and we need to sell our products to domestic customers," he said.

"We need to build self-owned brands to maximize profits rather than be an OEM-based factory." 

Zhang has found that the digitalization of the domestic consumer market has greatly reduced the threshold for factories to build their own brands and open up sales channels. The end-to-end link formed in e-commerce has also removed the need for subcontractors, which provides lower prices for consumers and creates a higher premium for factories.

Since this April, Zhang's company has teamed with domestic e-commerce giants like JD and Alibaba to launch online promotions.

"Our online sales exceeded 400,000 yuan ($57,640) in the first month. Although the number of transactions is not currently large, we have explored a new way of sales to open the domestic market," said Zhang.