From exports to sell in China: transformation of the export-oriented furniture firms in the Pearl River Delta

Abstract

ABSTRACTSince the late 2000s, particularly after the 2008 global financial crisis, the export-oriented firms in China’s coastal regions, for example, the Pearl River Delta (PRD) have engaged in selling their products in China’s domestic market as an alternative strategy in response to the decline of export orders from the Western advanced economies on the one hand and rise of domestic consumption in China on the other. Drawing upon the firm-specific strategies in the Global Production Networks (GPN) 2.0 theory, this paper examines the firm-specific strategies adopted by the export-oriented furniture firms in Dongguan, a well-known furniture cluster in the PRD, in their engagement of selling their products in China’s domestic market. Based on extensive field investigation particularly in-depth interviews with furniture firms, various domestic retailers and government officials during the period of May 2013 and April 2017, the paper argues that the prevailed export-oriented furniture firms have strategically recoupled with China’s domestic market through developing inter-firm partnerships with domestic chain retailers, intra-firm coordination with direct-sale stores and online shops, as well as inter-firm bargaining with individual retailers. The study enriches the GPN literature through incorporating domestic retailers, especially their strategic partnerships with the export-oriented furniture firms in exploring domestic markets in the global south.