Private Enterprises in Crisis Jiangsu: Clothing Industry “Turns Exports into Domestic Sales”

Mainland enterprises are having a hard time under the financial turmoil. As export pressure continues to increase, many original foreign trade processing companies have begun to turn their attention to the domestic market.
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Sangyang Group is a textile and apparel company specializing in foreign trade in Jiangsu Province. Since 2008, although company representatives and foreign businessmen are still chatting and laughing at the negotiation table, the negotiations have been very difficult.
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It is understood that 100% of Sangyang Group’s products are exported, 90% of which are sold to the United States and the other 10% to Europe. But since 2008, as the RMB has continued to appreciate against the US dollar and the euro, their lives have become increasingly difficult.
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Lu Wenchang, Chairman of Sangyang Group: In March 2008, I turned down 3 million U.S. orders. The 3 million pieces were basically around 90 million yuan, because there was basically no profit after I verified the price at that time, so there was basically no profit. The business is losing money.
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With the gradual loss of foreign orders, Lu Wenchang turned his attention to the domestic market. In order to quickly open up the domestic market, Lu Wenchang invested about 50 million yuan in a newly developed new product. Due to the uniqueness of the product, it suddenly opened the doors of large domestic shopping malls and supermarkets. At present, the proportion of domestic sales of Sangyang Group has rapidly increased to 70% of the total product volume.