Export-oriented manufacturers facing a sudden drop in orders face their biggest test in the current financial crisis, but retailers are ready to compromise to cope with the situation. A group of supermarket chain operators from interior provinces recently visited Dongguan. They were infuriated when they saw a foreign trade warehouse with goods piled up to the roof. "We only realise that we're selling junk at our stores when we see their stock." "We can buy from these factories in accordance with international trade practices and bear the risk," said Wang Tian, chairman of the Better Life Supermarket Group in Hunan. "In addition to price advantage, they also have good stuff not available in the domestic trade market." Wang Tian found many garments, bags and shoes of new styles for his stores on this trip.

Hou Cuiying, merchandising director of the Jiajiayue supermarket chain in Shandong, holds similar views. "We purchased goods worth more than Rmb5 million with cash on this trip and they're virtually sold out by now," she said. Chinese retailers who got a taste of the benefits of this practice are beginning to think: If we do not take advantage of the current financial crisis to change the long-standing "unwritten rule" of our business, when foreign trade rebounds, we're going to miss seeing again these export commodities that are good value for money. However, this change in the purchasing strategy of large retailing operations is making other operators nervous, as it will greatly reduce the purchasing cost of big retailers and deal a blow to medium-sized and small retailers already coming under considerable pressure.

Given the complexity of the current situation where the financial crisis has triggered a crisis in the real economy, export-oriented enterprises are turning their eyes to the domestic market and putting domestic sales on their agenda to make up for dwindling exports. Hong Kong and Taiwan manufacturers in the coastal areas engaged in export-oriented operations should consider taking advantage of the current opportunity to venture into the domestic retail scene.