Every month, we see data about China’s exports (and the latest ones don’t make much sense, by the way). But who knows a reliable source of data about China’s domestic trade?

I was curious to read the findings of the survey of nearly 200 suppliers by Global Sources on this topic (Survey: China makers tap domestic sales, keep an eye on exports).

Because of concerns about the long-term health of European markets, and the difficulty to increase the share of products sold to emerging countries such as Brazil or Russia, many suppliers are trying to sell more domestically.

Here are the most interesting findings:

Interviewed suppliers complained that selling products domestically can often be tougher than exporting them. Ironically, one of these Chinese companies

•  “identified design copying as a major hindrance to cultivating domestic sales”.

And what is their preferred go-to-market strategy?

Partnerships with companies or retail chain stores with established distribution networks and deferred payment options are key in addressing these issues. Online retailers are also options, particularly for SMEs.

That sounds true. I have seen many manufacturers try to create their own brand and to launch a retail store chain, but this is extremely difficult. The main reasons are probably as below:

• Retail space in first-tier cities is very expensive.
• Manufacturers are usually not expert in building a brand.
• Chinese consumers are not dumb. They can usually detect a real imported brand vs. a local brand, and they won’t pay a premium for the latter.
• The Chinese market is probably even more competitive and price-sensitive than most export markets. So selling to wholesalers while making a profit is seldom an option.

Good news: most manufacturers will still be focused on their foreign customers for quite some time!