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 evolving from large workshops focused on manufacturing to full-fledged brands. For regions, it signifies a gradual transition in the main driver of economic growth—from investment to domestic consumption. A fair and competitive domestic market has become the shared aspiration for “Made in China†enterprises during this challenging phase. How governments manage policy and guide private consumption will be a true test of their strategic wisdom.
Shida, who has never run Guangzhou before, is now stepping into a new chapter of his career. As the domestic sales director of Taisheng Furniture, one of Asia’s largest furniture foundry companies with over 20,000 employees and monthly exports of more than 2,000 containers, he is leading the company’s shift toward the domestic market.
Taisheng started its journey in Taiwan and later moved to Dongguan in the early 1990s. In 2005, the company was listed on the Hong Kong Stock Exchange with a market cap of $1.5 billion. It became a top private-label furniture brand in Asia and ranked among the top ten furniture companies in the U.S. The group includes three U.S.-based companies and two manufacturing sites in Dongguan and Zhejiang.
For years, Taisheng was known as an exporter, with nearly all products going overseas. But the global financial crisis changed that. When orders from the U.S. market dropped sharply, Taisheng realized the need to pivot. This shift led them to launch their own domestic brand in 2008, showcasing three new brands specifically for the Chinese market at the Spring Furniture Exhibition.
The domestic sales boom began in April of the previous year, with provincial leaders like Secretary Wang Yang and Governor Huang Huahua actively supporting Guangdong-based companies. Taisheng is just one of many firms embracing this transformation.
The new Taisheng store is located in Zhujiang New Town, a rising CBD in Guangzhou. Last August, Junhe, a real estate developer with no prior experience in home furnishings, announced a 600 million yuan investment to build a massive commercial plaza with a 100,000 square meter home store. Shida personally oversaw the opening of the 14th domestic store, but the process was not smooth—each time, the people involved changed, and the lack of experience delayed the opening.
In the past year, the furniture industry has mirrored China’s growing domestic demand. In Guangzhou’s new CBD areas, such as Weizhou and Zhujiang New Town, over 500,000 square meters of new furniture stores were added in 2009—double the existing size. If scaled up, the total could exceed 1 million square meters. Shida noted that in 2007, when the industry was booming, there weren’t so many new stores opening.
Furniture manufacturing, like many other industries, is labor-intensive and highly sensitive to economic conditions. It relies heavily on the real estate market. In early 2009, the industry was worried about a downturn, but by the second quarter, the domestic real estate market rebounded, boosting furniture sales. By mid-November 2009, home building materials had taken the spotlight in CCTV’s advertising tender, with companies like Sanshu and home stores securing huge bids.
In 2009, the total output of the furniture industry reached 650 billion yuan, up 13.5% year-on-year. Exports fell by 6%, making the domestic market the key driver.
This trend wasn’t limited to furniture. In 2008, due to the financial crisis, many export-oriented companies turned inward, sparking a wave of domestic sales strategies across “Made in China†firms.
Guangdong, China’s largest exporting province, also faced challenges during the crisis. In April 2009, Provincial Secretary Wang Yang and Governor Huang Huahua took a proactive role in promoting domestic sales, even traveling across the province to support local businesses. That year, 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 from the Guangdong Academy of Social Sciences called this strategy “a trick that helped Guangdong survive the crisis.â€
However, the transition isn’t easy. Many companies that failed were those who tried halfway and returned to foreign markets when orders came back. Compared to international trade, the domestic market presents challenges in capital, distribution, and intellectual property protection.
Shida found it difficult to find skilled domestic sales talent, and product imitation by competitors was a constant frustration. To adapt, Taisheng modified its production lines and even involved itself in store design. Product designs also needed adjustment, as Western furniture sizes differ from those suited for the Chinese market.
Distribution channels also posed problems. While similar to the appliance industry, the furniture sector lacks strong brand concentration. Small and medium-sized companies often rely on big stores, which can be tough to control. Hypermarkets like Red Star Macalline and Real Home have significant power over retailers, sometimes leading to conflicts.
In 2008, during a critical period, dealers complained about being treated as “grandsons†while factories were “sons†and hypermarkets were “grandfathers.†This dynamic intensified as external demand shrank.
By 2009, rent increases and high operational costs made furniture prices soar. A bedside table could cost more than a TV, leading to jokes about buying a TV instead of a table.
These issues reflect the broader challenges faced by companies turning inward. Some, like Huajian Group, invested heavily in branding but struggled. Others, like the Humen Children’s Wear brand, saw both success and failure.
Despite the difficulties, some companies have thrived. Sichuan-based furniture firms like Quanyou and Mingzhu have grown rapidly in second- and third-tier cities, becoming known as the “Sichuan Army†in the industry.
While some companies have faltered, others continue to push forward, showing that the path to domestic growth is both challenging and rewarding.