On April 2, 2025, the United States announced a sharp increase in tariffs on Chinese goods, with rates on certain key categories soaring to 125%. The sudden policy shock left many export-oriented businesses with no time to react. A large number of orders were canceled, shipping schedules were disrupted, and "advance deliveries" became the main reason behind the 12.4% surge in China’s export figures that month.
Author: Botao Xu
Research Assistant: Leci Zhang
Behind these rising numbers lies the ongoing struggle of 700,000 export enterprises to maintain confidence under mounting real-world pressures.
In recent research conducted by EqualOcean on several foreign trade companies, we observed two rapidly diverging paths emerging:
One group has chosen to go “all in” on globalization, accelerating the pace of factory construction in Southeast Asia, warehouse deployment in Latin America, and supply chain expansion in Europe. They believe globalization is not retreating but rather entering a new phase of supply chain reconfiguration.
The other group is turning back to tap into domestic demand as a "second growth curve." These firms are repurposing products originally designed for the U.S. and European markets, offering high-quality manufacturing and cost-effective pricing, to reposition themselves in the local market by shifting from export to domestic sales.
In response to this wave of export reflow, the Ministry of Commerce has explicitly called for the promotion of domestic and foreign trade integration—unblocking product distribution channels, traffic pathways, and brand-matching mechanisms for “export-to-domestic sales.”
Major platforms such as Yonghui, JD.com, and Alibaba have quickly followed suit by setting up fast-track channels, launching dedicated sections, and offering subsidies. JD.com has pledged to purchase 200 billion yuan worth of high-quality export products over the coming year. Alibaba, Freshippo (Hema), and Vipshop also swiftly launched “Returning from Overseas” sections to help businesses precisely reposition themselves toward domestic consumers.
Meanwhile, the domestic market is far from sluggish—it is quietly undergoing a structural transformation.
In 2024, China’s total retail sales of consumer goods reached 48.33 trillion yuan, a year-on-year increase of 3.5%. Among these, service consumption grew by 6.2%, and online retail rose by 6.5%. The home appliance trade-in policy boosted sales of high-end appliances by 12.3%, setting a new record high.
More and more signs indicate that Chinese consumers are not downgrading, but rather becoming more rational and pragmatic—willing to pay for “quality + value for money.”
The domestic market is no longer merely a “temporary shelter” but could potentially become one of the dual engines of brand strategy.
The pressing question now is:
Is this shift from export to domestic sales just a stopgap measure, or the starting point of a mid- to long-term strategic restructuring?
Frontline Businesses: Resilience and Transformation in Crisis
"Starting from scratch is tough—but we have to try."
—Chen Duan, Deputy General Manager, Shanghai Garment Group Import & Export Co.
In spring 2025, a trade exhibition themed around the apparel industry was held in Shanghai. A rare scene unfolded at the event: traditional export enterprises that used to focus on the U.S. and European markets were, for the first time, negotiating face-to-face with domestic e-commerce platforms.
Shanghai Garment Group Import & Export Co. was one such company. Deputy General Manager Chen Duan admitted that the firm had long depended on exports to the U.S., but was now compelled to pivot toward the domestic market. “It’s hard to go from zero to one—but we have to try.”
At another booth, Lu Yan, Marketing Manager of Shanghai Beijin International, was busy showcasing newly developed vacuum storage bags.
"We’ve already had over $1.5 million in orders canceled, and we know almost nothing about the domestic market."
—Lu Yan, Marketing Manager, Shanghai Beijin International Trade Co.
“This is a difficult shift,” he added, “but one we must face.”
However, in the eyes of General Manager Gu Keda, this crisis-driven transition also brings growth opportunities.
"The government and platforms responded swiftly and built the necessary resources for us. Though it was forced upon us, it might be the very chance we need for organizational transformation and brand upgrading."
—Gu Keda, General Manager, Shanghai Beijin International Trade Co.
Stories of “opportunity in crisis” weren’t confined to the exhibition floor.
In Taizhou, Zhejiang Province, Shuangma Plastics—an enterprise with 75% of its orders dependent on the U.S. and European markets—was facing export losses exceeding 150 million yuan. Deputy General Manager Yang Wenjun stated that the company had no choice but to pursue a dual-track strategy.
"We can’t just sit and wait. On one hand, we’re expanding into Southeast Asia; on the other, we must embrace dual circulation."
—Yang Wenjun, Deputy General Manager, Shuangma Plastics
Like many export enterprises, Shuangma lacked experience in domestic sales. “We don’t know who the users are, don’t understand pricing, and even if we get the product on the platform, we don’t know how to sell it,” Yang said.
In this round of crisis, platforms became a key driving force.
Taobao and Tmall launched a “Select Foreign Trade Products” initiative, offering fast-track onboarding, traffic support, and commission reductions. They also piloted a “semi-managed model,” in which platform experts assist enterprises with product selection, pricing, and promotion—providing embedded end-to-end guidance.
"The state really has good policies, and the platforms really sent people to help. For once, we’re not just feeling our way in the dark. Now we can just focus and charge ahead."
—Yang Wenjun, Deputy General Manager, Shuangma Plastics
EqualOcean’s research found that more and more enterprises are shifting their focus from the short-term anxiety of “order disruption” to the long-term challenge of “user insight and channel rebuilding.” They’re beginning to understand that shifting from export to domestic sales isn’t merely a channel switch—it’s a fundamental rebuilding of organizational, branding, and system capabilities.
As one interviewee put it:
"In the past, we shipped goods overseas. Now, we’re bringing brands back home."
Strategic Judgment: Adjusting Strategy and Embracing the New Normal
Amid shifting external conditions and domestic economic restructuring, foreign trade enterprises turning toward the domestic market is no longer just a contingency plan—it may become part of a long-term strategy. EqualOcean believes that to truly grasp the “export-to-domestic” phenomenon, enterprises must evaluate and plan across the following critical dimensions:
1. Branding Is Not Packaging—It’s Strategy: The First Major Battle of Export-to-Domestic Transition
For most export-oriented companies, entering the domestic market is far from a simple platform switch or price adjustment. It’s more like a structural overhaul—from a “delivery-driven logic” to a “consumer-driven logic.” It requires a fundamental shift in commercial mindset.
Over the past decade, Chinese manufacturers have thrived globally under OEM/ODM models where branding was secondary. The focus was on cost control and reliable delivery. But in the domestic market, the rules are different: consumers care about the brand name, the story behind it, and the emotional resonance it brings. What worked in foreign trade—“as long as it ships, it's fine”—no longer delivers sustainable competitive advantage at home.
"Brand is your ticket to the domestic market."
—EqualOcean New Globalization Research Institute
EqualOcean found that many companies failed in their first domestic market attempts not due to product quality but due to a complete lack of brand strategy. Some misunderstood branding as advertising or traffic manipulation, ignoring its core value: to build differentiated perception and long-term trust in users’ minds.
For example, a beauty appliance company in Zhuhai used to generate over 60% of its revenue in Europe, emphasizing safety and value-for-money. To appeal to domestic consumers, they ceased OEM operations and established their own brand. They rebuilt everything from product design and content packaging to channel strategies, positioning themselves as a “cost-effective domestic personal care brand.” Combined with livestreaming and short-video promotion, their new product line doubled sales within a month, while older product lines also saw a resurgence. This case shows that brand strategy is not just a slogan—it’s the foundation for reconnecting with users.
In EqualOcean’s view, Chinese enterprises shifting to the domestic market must not overlook brand strategy, especially as three major cultural trends reshape consumer foundations:
1) Mature Consumption Culture: Brands Must Be Visible
Consumers now care less about “functionality” and more about whether a product expresses who they are. A brand is not just a logo—it’s an extension of identity and a cognitive anchor. This demands personality in products, tone in marketing, and empathy in channels.
2) Value-for-Money Is Being Redefined—Perceived Value Determines Premium
In mature sectors like home appliances, electronics, and personal care, the “price war” has long given way to a “perceived value war.” A product’s brand premium determines whether it can stand out in a crowded market.
3) Brand Is the Long-Term Moat Against Market Cycles
Amid growing macroeconomic volatility, brand is one of the few assets that can transcend shifts in traffic, policy, or channels. Traffic ensures short-term survival—brand ensures long-term resilience.
Yet for enterprises used to “just shipping, not storytelling,” this transformation won’t be easy.
2. From External Dependence to Domestic Resilience: Supply Chain Restructuring as a Strategic Battle and Structural Turning Point
For a long time, the “winning hand” for many Chinese export enterprises lay in securing large orders from Europe and the U.S., and in benefiting from global customs efficiency. But with the renewed escalation of U.S.-China trade tensions in 2025—marked by abrupt tariff hikes—Chinese manufacturing is now facing a deep shock that goes beyond localized disruption to a full-chain restructuring.
"Even the strongest production capacity can’t survive the collapse of a single link; even the fastest growth can't escape the weak points in the chain."
According to EqualOcean research, some enterprises have already begun proactive adjustments despite the headwinds. For instance, Shanghai Baolong has established a factory in Europe to rapidly shift production capacity and circumvent trade barriers. More companies are choosing to bring parts of their production lines back to China to enhance local delivery security and improve supply chain coordination. This “forward deployment + partial reshoring” strategy has emerged as a common self-rescue mechanism for enterprises navigating this complex landscape.
Within China’s industrial system, Guangdong—core hub of the global textile supply chain—appears to have sensed this shifting tide earlier than others. Professor Wan Zhe of Beijing Normal University recently noted:
"In the current tariff landscape, Guangdong’s textile companies are undergoing an upgrade from traditional to smart manufacturing. Whether dealing with EU carbon tariffs, promoting green production, or establishing resilient supply chains through a ‘1+N’ regional layout, these are fundamentally structural strategies in response to structural global uncertainty."
Based on both research and regional practices, enterprises are converging around three structural supply chain consensus trends:
1. The “Single Market Mindset” Is No Longer Viable—Flexible Layouts Are the New Norm
While orders from Europe and the U.S. remain appealing, they now come with increasing political risk and logistical volatility. The logic of “1+N” regional layout is becoming mainstream: placing China at the core node while diversifying manufacturing and sourcing across RCEP countries, Belt and Road markets, and Latin America.
Many Guangdong textile exporters have indicated that they now view Southeast Asia as a "backup production base," while maintaining China as a “stable rear base,” in order to reduce excessive dependence on any single market.
2. Domestic Substitution Is a Practical Task—Technology and Materials Must Be Controllable
In key sectors such as components, raw materials, and precision tooling, enterprises are accelerating the shift from imported solutions to domestic alternatives. Many have restarted domestic R&D partnerships or built in-house capabilities.
In sectors like home appliances, automotive parts, and garment fabrics, supply chains built around “technology controllability + delivery reliability + cost certainty” are becoming central to supplier decisions. Wan Zhe points out that Guangdong’s investment in new materials and green production exemplifies the systemic enhancement of manufacturing capabilities.
3. Rebuilding Chain Collaboration Anchored in Domestic Demand
The domestic market is becoming both a “ballast” and a “training ground.” Through “export-to-domestic” strategies, many companies are achieving closed-loop systems across manufacturing, distribution, and consumption.
Wan Zhe highlights that the integrated industrial network within a 50-km radius of Guangzhou has become a key enabler for fast fashion companies to stabilize output and accelerate response times. This kind of supply chain “organizational capacity” is now being replicated in industries such as home appliances and consumer electronics.
At the policy level, “independent controllability” has risen from industry consensus to a national strategic imperative. At the recent Third Plenary Session, the central government clearly emphasized the need to “build a secure and controllable supply chain system” as a long-term goal. Official documents have also explicitly called for accelerating the construction of a globally competitive modern industrial system, with a strong focus on industrial chain security and supply chain resilience.
This shift signals that enterprises must do more than “patch the gaps”—they must rebuild the foundation.
In summary, supply chain transformation is a form of disciplined self-cultivation for Chinese enterprises under growing multilateral pressure. It is not a temporary defense mechanism, but a long-term capability; not merely a cost project, but the strategic core. Enterprises that can restructure their supply chains ahead of the curve will be the ones to secure stable growth in an uncertain world.
3. Digital Adaptation: From “Reach” to “Conversion,” Reshaping the Growth Curve
If brand building determines how a company is positioned in the minds of consumers, and supply chain restructuring determines whether it can operate smoothly, then digital transformation directly affects whether a foreign trade enterprise can run fast—and far—in the domestic market.
In the past, many export-oriented companies viewed digitalization primarily through the lens of factory-side automation or order management systems—what could be called "production-side digitalization."
Now, in the face of fierce competition within China’s e-commerce ecosystem, digitalization has become a full-chain adaptation battle—from production to sales, from factory to end user.
Platform Enablement: E-Commerce Channels Become the First Step for Foreign Trade Firms to Enter the Chinese Market
At the beginning of 2025, major platforms such as JD.com, Alibaba, Pinduoduo, and Douyin E-Commerce launched dedicated support programs for enterprises shifting from export to domestic sales. These initiatives employed a combination of “customized zones + managed operations + traffic support,” significantly lowering the threshold for small and medium-sized foreign trade businesses to pivot.
Take JD.com as an example. Group Vice President Kong Xiangying stated:
“In the coming year, JD will make large-scale purchases of export-to-domestic goods, open exclusive display channels for high-quality foreign trade enterprises, and leverage our omnichannel marketing system to help products quickly reach the right consumer segments.”
Meanwhile, Freshippo (Hema Fresh) launched a “24-Hour Green Channel for Entry,” offering not only efficient logistics support but also co-developing private-label products with merchants and driving end sales through its offline store network.
Alibaba, Kuaishou, and other platforms are also rolling out multi-layered, multi-path “domestic sales acceleration channels” based on eight core initiatives—including supply-demand matchmaking, traffic support, and policy relief.
In discussions between EqualOcean and various enterprises, some factory-based companies shared a common sentiment:
"Rather than building a sales network from scratch, it’s more cost-effective to leverage the power of platforms for initial market validation."
A manager at a home appliance export company in Ningbo candidly noted that their team had only been familiar with FOB pricing in the past. Now, by utilizing Douyin E-Commerce and integrating “video + sales,” they actually feel more efficient than when chasing orders from Europe and the U.S.
Internal Adaptation: Gaps in Digital Capability Become the Watershed of Transformation
However, the openness of platforms does not guarantee automatic success in transformation. The real challenge lies in whether companies can rapidly develop internal digital awareness and execution capabilities.
While visiting Yiwu International Trade City, EqualOcean spoke with a merchant who exports NBA merchandise. Due to fluctuations in overseas sporting events, his orders were abruptly suspended. He had planned to try livestream selling for the domestic market but hesitated due to a lack of manpower and marketing experience.
“We don’t know how to select products, set prices, or write product descriptions—livestreaming feels completely foreign to us.”
At that moment, Baidu’s “Sailing Plan” (破浪计划) provided AI assistant services that enabled him to digitize and list his products at the exhibition using a single computer. The platform’s distribution algorithm immediately connected him with potential buyers, and he received his first batch of inquiries that very day.
This model—“technology hosting + traffic coordination”—gave foreign trade merchants who had previously been digitally voiceless their first sense of certainty in online transformation.
New Scenarios Give Rise to New Tactics: Livestreaming, Social Commerce, and AI-Based Product Selection as Fast-Attack Tools
In this wave of export-to-domestic transition, the strategy of “livestreaming + content marketing” has been widely replicated. Enterprises that initially struggled with the shift have drawn several common lessons:
Not every product is suitable for livestreaming, but every product can create a compelling consumption scenario through content.
Rather than burning cash for traffic, it’s more effective to tap into platform ecosystems and build an integrated chain that links social engagement, product display, and sales conversion.
The adoption of emerging tools is also accelerating the process. Some small and medium-sized brands are now using AI-based product selection, AIGC-assisted pricing, and automated product description optimization to build basic sales pipelines—without relying on large operational teams.
As one home appliance business owner transitioning from export to e-commerce put it:
“We used to just make products. Now we have to make content. We used to compete on production capacity; now it’s about reaction speed. It’s a completely different market—but one where we can still run fast.”
Conclusion: From Short-Term Response to Strategic Evolution, the Shift to Domestic Sales Is Not a Retreat—It’s a Strategic Answer for Growth
“Export-to-domestic” is not a new term in the vocabulary of Chinese manufacturing. But the wave of collective pivoting in 2025 marks an unprecedented depth and breadth. Sudden tariff hikes and blocked orders have forced enterprises to confront a long-overlooked question: If we can’t go out, can we dig in?
EqualOcean’s research suggests that this externally triggered shift is in fact rooted in deeper structural drivers:
On one hand, the tightening global trade environment is pushing companies to optimize their supply chains and strengthen their risk resilience;
On the other hand, China’s vast domestic consumer market is undergoing accelerated structural transformation, creating new engines of demand for Chinese products;
More importantly, policy systems at the government level are systematically supporting the “dual circulation” strategy, helping enterprises connect the dots across production, distribution, and brand-building.
“Export-to-domestic” is no longer just a contingency channel for offloading excess inventory. It has become a comprehensive test bed for enterprises’ brand development, production flexibility, and digital channel capabilities in a new consumer context.
Just as we’ve seen Chinese companies gain ground overseas by adopting “brand differentiation + localized operations,” those aiming to succeed in the domestic market must also undergo upgrades in digital capability, user insight, and organizational agility.
From tactical retreat to strategic repositioning, Chinese enterprises are transforming this pivot inward into a full-chain endogenous reform.
In the consumer landscape of the future, the companies that can convert foreign trade expertise into domestic market competitiveness will not merely be “returnees from overseas”—they will be the pioneers shaping the next era of domestic demand.