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Exporters shifting sales to markets at home

Domestic sellers, distributors help producers expand selling channels against tariff risks

By WANG ZHUOQIONG | China Daily | Updated: 2025-04-16 00:00
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Ningbo Today Food Co Ltd, one of Asia's leading tuna product firms, is navigating a tumultuous export market landscape as orders from the United States have steadily declined since the introduction of tariff policies first levied in 2019.

The US market used to make up 20 percent of orders, but has now declined to nearly zero.

With over two decades of experience in tuna canning, the company has reported an impressive 2024 annual revenue of 900 million yuan ($123 million), with 80 percent of its products being exported or produced under OEM agreements, primarily targeting Europe, South America and Southeast Asia.

As recent tariffs imposed on China by US President Donald Trump's second term now add up to 145 percent, the company has struggled.

"The impact of these tariffs has made our business increasingly challenging this year," said Zhang Ning, market manager at Ningbo Today.

To help suppliers such as Ningbo Today, the Ministry of Commerce has called for major domestic retailers and distributors to help them expand sales in domestic markets.

Yonghui Superstores, a leading supermarket chain, had engaged with over 200 high-quality supply chain companies by Monday. Among these are prominent Chinese suppliers catering to the US market, including industry leaders like Costco and Sam's Club.

With discussions underway, Yonghui is set to launch a dedicated international trade section in select stores within the week, showcasing a selection of some Chinese-made products.

Yonghui has enhanced its shopping experience at its flagship store in Shijingshan district of Beijing. This store now features a specialized section for both domestic and exported products, providing consumers the opportunity to explore quality goods with a broader range of options.

To alleviate inventory pressures faced by export-oriented companies, Yonghui has introduced an innovative "green channel" for Made-in-China products, which includes three supportive measures — a swift 15-day shelf placement process, targeted brand promotion plans and collaborative product development opportunities with leading supply chains.

With over 700 stores nationwide, the retailer said it aims to mitigate the impact of export pressure while facilitating the flow of high-quality products from established supply chains to reach more Chinese consumers. Yonghui has eliminated membership and entry fees for supply chain companies.

Jason Yu, general manager of CTR Market Research, said the proportion of domestic consumption by Chinese residents to GDP is about 20 percentage points lower than the average level of developed countries, which means there is significant room for improvement.

Currently, the Ministry of Commerce is encouraging more export-oriented enterprises to redirect some of their high-quality and cost-effective products to meet domestic market demand, which is a promising approach, he added.

Gong Dehua, Yonghui's deputy general manager, said recently: "Behind the export of goods is the brilliance of 'Made in China'."

Chinese consumers are increasingly poised to embrace high-quality domestic products, said Gong.

For exporters, this opportunity comes at an ideal time.

"Tuna remains a relatively unfamiliar ingredient for many local consumers, who will take time to adapt and incorporate it into their meals," Zhang of Ningbo Today said.

"Collaborating with leading Chinese retailers and catering partners is essential to expanding our product category and boosting sales."

To cater to local tastes, Ningbo Today has developed innovative product offerings, including spicy and vegetable-flavored tuna, as well as convenient packaging designed to appeal to female consumers. The company also hopes to boost its domestic brand, Yellowfin Tuna, which initially was sold on online retail platforms since Trump's first term.

In addition to focusing on the domestic market, Zhang said the company has carried out a dual strategy, or as he puts it, "walking on two legs".

This approach involves actively exploring new overseas markets to ensure factories remain productive amid the ongoing tariff challenges.

In addition to retailer Yonghui, Wushang Group — a leading retailer in Central China's Hubei province — released an announcement on Thursday proposing several measures such as expanding sales channels, strengthening brand promotion, providing data support and optimizing supply chain management.

The company called on its 11 shopping centers and department stores, more than 100 supermarkets, and other market entities across the country to join hands to help consumer goods exporters expand into the domestic market.

Wang Zhiming, deputy general manager of Wushang Group, said that feedback from last week's announcement has been overwhelmingly positive from suppliers.

"A total of 47 enterprises have reached out to us expressing interest in collaboration," Wang said. The majority of these companies operate in essential sectors, including daily necessities, food, textiles, home furnishings and personal care.

Wang said that they have promptly established communication with these businesses to assess their needs.

"Many are eager to secure dedicated space for their products in supermarkets or shopping centers," he said. The group has implemented a fast track to assist exporters in obtaining the necessary domestic retail certifications and qualifications, with plans to designate areas for exports-turned-domestic products in stores as early as next week.

"They've shared their struggles with us. Our domestic distributors and retailers stand as strong allies during these challenging times," Wang said.

"The domestic market has become a significant buffer zone for exporters who have hit a wall with tariffs. High-quality products that meet consumer expectations are exactly what our domestic market desires."

Yu of CTR added: "Export-oriented enterprises face several challenges when transitioning to the domestic market, including market adaptation, brand recognition and pricing strategies. Additionally, merely competing for existing demand without creating new demand can lead to price wars and declining profits."

"These enterprises, which have long relied on international orders, often lack domestic distribution networks and retail experience. Their brand awareness is also relatively low, requiring significant investment in brand building."

"Their success in the domestic market depends on several factors," he said. Enterprises must adapt to the rules of the domestic market, with precise implementation of policy support and coordinated innovation across the industry chain essential for sustainable development.

David Zhang, Asia Pacific Insights manager at Euromonitor International, said Chinese suppliers may boost domestic sales by collaborating with the government and distributors. Meanwhile, "glocalization" through local partnerships in emerging markets like Southeast Asia can help avoid trade tensions.

 

A view of a shopping mall in Wuhan, Hubei province, in May. LI HUI/FOR CHINA DAILY

 

 

A view of an Ole' supermarket in Shanghai in November 2022. FAN JIANLEI/FOR CHINA DAILY

 

 

 

 

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