SHAOXING YINGSIPE TEXTILE CO.,LTD , https://www.chinayingsipei.com
"Made in China" domestic sales war
The engine of China's economic growth is shifting from export-driven to consumption-led. For companies, this means a transformation from being mere "big workshops" producing for foreign markets to becoming true brand entities. For regions, it signals a transition where the main driver of economic growth will gradually shift from investment to domestic consumption. A fair and orderly domestic market has become a shared aspiration for the "Made in China" industry during this challenging period. The ability of the government to skillfully manage policy and effectively guide private consumption will be a key test of its governance.
Shida, the domestic sales director of Taisheng Furniture, recalls that this is his first time running operations in Guangzhou. Taisheng, one of Asia’s largest furniture foundry companies, has over 20,000 employees and exports more than 2,000 containers monthly. In 2008, the company began developing its own domestic brand, marking a strategic shift.
Originally based in Taiwan, Taisheng moved to Dongguan in the early 1990s. It was listed on the Hong Kong Stock Exchange in 2005 with a market cap of $1.5 billion, becoming a leading furniture brand in Asia and among the top ten furniture companies in the U.S. Its network includes three U.S. companies and manufacturing sites in Dongguan and Zhejiang.
For years, Taisheng was known for exporting all its products overseas. But the 2008 financial crisis forced a change. With orders from the U.S. market plummeting, the company realized the need to focus on the domestic market. Shida said, “We used to rely on being a big producer, but soon we will become a big consumer.â€
In response, Taisheng launched three new brands specifically for the domestic market at the 2008 Spring Furniture Exhibition. This marked the beginning of a broader trend toward domestic sales.
The push for domestic consumption gained momentum in April of the previous year, with provincial leaders like Wang Yang and Huang Huahua actively supporting Guangdong-based companies. Taisheng is just one of many firms pivoting inward.
The new Taisheng store in Zhujiang New Town, Guangzhou’s rising CBD, reflects this shift. In August last year, Junhe, a company previously uninvolved in home furnishings, announced a 600 million yuan investment to develop a large commercial plaza with a 100,000-square-meter home store.
Shida faced challenges setting up the 14th domestic store, as both parties lacked experience. The opening date was delayed multiple times. He admitted, “We have no experience, and neither do they.â€
Over the past year, the furniture industry has seen a surge in domestic sales. In Guangzhou’s new core CBD areas—Weizhou and Zhujiang New Town—the number of new home stores added exceeded 500,000 square meters in 2009, nearly doubling the existing scale. If expanded to the whole city, it would surpass 1 million square meters. Shida noted, “In 2007, when the furniture industry was booming, there weren’t so many new stores opening.â€
The furniture industry, like many others, is labor-intensive and highly sensitive to economic conditions, especially real estate trends. While concerns about the impact of the financial crisis were high at the start of 2009, the domestic real estate market rebounded, boosting the furniture sector.
By mid-November 2009, the CCTV advertising tender for 2010 revealed an unexpected trend: home building materials outperformed other industries, with paint company Sanshu spending 80 million yuan and home stores securing 72 million yuan. According to 2009 data, the total output value of the furniture industry reached 650 billion yuan, a 13.5% increase year-on-year. Exports fell by 6%, while the domestic market became the main driver.
This shift wasn’t limited to furniture. Many export-oriented enterprises turned their attention to the domestic market in 2008, sparking a wave of “domestic competition.†Guangdong, China’s largest export province, also faced challenges during the crisis.
In April of the previous year, during a meeting to implement the Pearl River Delta Reform Plan, Provincial Party Secretary Wang Yang emphasized the importance of domestic sales, taking on the role of a “super salesman†by traveling across the province to promote local products. By 2009, Guangdong held 132 product fairs nationwide, generating over 580 billion yuan in orders. Domestic sales contributed 173.5% to industrial growth, a five-year high.
Professor Ding Li of the Guangdong Academy of Social Sciences praised this strategy, calling it the key to helping Guangdong survive the crisis.
However, transitioning to the domestic market isn't without challenges. Companies used to relying on foreign orders often struggle with capital, distribution channels, and intellectual property protection. Shida pointed out that Taisheng still lacks suitable domestic sales talent and faces constant copying of its designs.
Product design differences between China and the West also pose challenges. For example, Western furniture tends to be larger, requiring adjustments for the Chinese market. Channel management is another headache. Unlike the appliance industry, the furniture market is fragmented, with many small and medium-sized companies competing for space in major retail chains.
Hypermarkets like Red Star Macalline and Real Home dominate the market, but their control over rental prices has led to conflicts with retailers. In December 2009, a rent increase by Red Star Macalline sparked protests from furniture dealers, who called it a “landlord†issue.
Shida noted that inflated real estate prices have driven up business costs, making furniture prices excessively high. Some consumers joke that a bedside table now costs more than a TV.
These issues are not unique to Taisheng. Many companies face similar struggles as they adjust to the domestic market. Huajian Group, the world’s largest women’s shoe manufacturer, invested heavily in branding but faced challenges. Similarly, some companies have struggled to sustain their domestic efforts.
Despite the difficulties, some have succeeded. Sichuan-based furniture companies like Quanyou and Mingzhu have thrived in second- and third-tier cities, achieving annual growth rates of 30–40%. They’ve become known as the “Furniture Chuanjun†in the industry.
While many have failed or returned to export, those who adapted early are now leading the way. The shift to domestic consumption is not just a trend—it’s a fundamental transformation shaping the future of China’s economy.