Domestic focus offers Christmas cheer to suppliers

YIWU - Lu Jianzhi is quickly tapping her counter trying to work out the accounts of a Chinese customer who has purchased Christmas goods from her store.

In the past, such a task would have ended in October but the weak international market has meant Lu has had to target her Christmas goods to domestic customers this year.

"Foreign tradesmen make enquires in March, and place orders in June. We export goods in September and October," said Lu, a wholesaler in Yiwu city in East China's Zhejiang province, the country's largest distribution center of small commodities.

"The number of orders from foreign customers dropped by nearly one third this year, so we hope to make up the losses from the domestic market," Lu said.

Gloomy international market

Yiwu has more than 700 enterprises selling Christmas goods. Around 40 percent of Christmas products in the European market are from China, rising to 70 percent when it comes to the American market.

However, almost half of the firms have had to change their marketing strategies due to falling demand.

Wang Liqun, president of the Yiwu Youlide Handicraft Co. Ltd., whose annual exports total more than 30 million yuan ($4.8 million), said contracts with some large supermarkets in cities such as Hangzhou and Nanjing have been a savior.

"One of the contracts was worth 5 million yuan," Wang said.

A businesswoman from Croatia arrived in Yiwu in the middle of December. For the past 12 years she used to visit the city and place orders for Christmas decorations and accessories.

"We canceled our orders this year. I have only come to take pictures of products and get a few ideas to take back to my company," she said.

A business couple from Greece have cut their purchases by half due to insufficient demand in their country.

"It's a fact that foreign trade is not as good as it was years ago. European and American purchasing power is declining, while rising costs in China also cuts profits and reduces the competitiveness to export," said Zhuang Jian, an economist with Asian Development Bank.

Zhuang said Chinese exporters needed to change their structures. SEEKING DOMESTIC OPPORTUNITIES

According to Zhang Handong, director of Zhejiang's research center on international trade, China needs to grow domestic demand for Christmas goods.

Revenues from the domestic market this year accounted for 35 percent of total sales at Youlide, with value predicted to reach 50 percent next Christmas, said Wang.

However, Christmas goods are not the only things he sells now.

"We sell 'overall solutions' for customers who have Christmas decoration projects such as supermarkets and hotels, and we offer design, installation and repair services," he said.

The company provides software engineers, product development professionals and cameramen.

Another channel for businesses is the Internet.

Taobao.com, the largest online retailer in China, has seen an increase in Christmas trade.

Christmas trees and decorations have been sent to cities and villages around the country rather than abroad.

"Our Christmas stockings sold out and manufacturers have had to produce goods around the clock," an owner of an online store named "Pafanqie" said.

"To deal with the domestic economic transformation and global slowdown, companies should invest in research, improve management, enhance innovative capacities and increase the added value of products," Zhuang said.