(Yicai) April 21 -- China’s export companies are showing remarkable resilience and adaptability in the face of steeper US tariffs, with domestic sales, alternative overseas markets, and order sharing becoming key survival strategies. One of the most common approaches has been to redirect exports to countries and regions other than the United States.

“In early April, some of our US customers contacted us to halt or cancel orders," said Nie Ziqin, the owner of a holiday-themed gifts and props store at the Yiwu International Trade City.  As much as half of the business’ annual sales, in the tens of millions of yuan, are to American clients, she told Yicai.

Nie's factory has over 10,000 square meters of production space and more than 40 workers. "We are facing major pressure, particularly with inventory and cash flow," she noted. “I hope workers can maintain regular hours without income disruption. I spent two sleepless nights thinking about solutions.”

According to figures from Yiwu International Trade City, dozens of businesses at the world's largest market for small commodities have been impacted just like Nie’s.

Ultimately, Nie reached out to clients in the European Union and in member countries of the Belt and Road Initiative. Her 20 years of client relationships proved invaluable, with buyers ready to help in times of need.

"What surprised me was that several long-term clients voluntarily offered to review our product lists and procure suitable items,” Nie noted.

She now plans to sell some products at cost to solve the inventory issue with the support of the European clients, so that both parties can benefit from this arrangement.

However, Nie believes simply transferring orders to Europe is not enough, so she will also try to sell more products in the Chinese market. Her business launched a domestic product development plan in May last year, which officially launched in October.

Jiang Jiangping, another merchant exporting holiday-themed goods from Yiwu International Trade City, told Yicai that businesses can rely on the European, Middle Eastern, South American, and African markets if they wish to scale back dependence on the US market. In fact, Jiang's US business only accounts for 2 percent to 3 percent of the total.

Order Sharing

A friend of Jiang’s who exports solely to the US market is now in trouble, as their factory has come to a standstill. To help them out, Jiang has shared some orders with his friend.

But with more and more Chinese exporters shifting their attention to Europe, the European market is becoming overcrowded. Even though Lera New Energy Power Technology's US business is facing challenges, rivalry in Europe has become more intense, Zhao Qingping, head of overseas sales at the Chinese power tool exporter, told Yicai. 

Fortunately, some of its innovative products have made strides in the European market this year, which helps it tackle competition, he said. For instance, their fifth-generation hyper-speed lawnmower, which can be assembled in just two to three seconds and has adjustable cutting height and self-propelling speed, was introduced into over 400 offline stores in seven European countries within three months of its launch.

Lera has recently entered five Central Asian countries, Russia, and Ukraine and plans to expand into South America as well as BRI countries, Zhao said. "We bring innovative and differentiated products, which give us a competitive edge.”

Surging Inventories

After the US tariff hikes led to several American clients canceling orders, Qingdao Liti Agricultural Products’ inventory levels spiked, according to Business Manager Jiao Liqian. Liti mainly exports ginger to the US and Southeast Asia.

To run down its inventory, Liti began selling products in 52 RT-Mart supermarkets in Chinese cities such as Beijing, Jinan, and Tianjin on April 15. Sales of the company's products in northern China soared six-fold to 1.2 million tons on the day they hit RT-Mart's shelves from previous day.

Litai's ginger meets 217 inspection and quarantine standards, making it suitable for export to many countries and regions. But this pushes the price up by about 50 percent compared with similar products, so Jiao realized that they must be selective in developing new domestic sales channels, as some wholesale markets and supermarkets are highly price-sensitive and may not be suitable.

“After entering more domestic sales channels, we will focus on selling at low margins and high volumes," Jiao said. "Our goal is to break even. We can accept lower profits, but we must ensure the production and sales of our farmers for sustainable operations.”

Editor: Futura Costaglione