A 30-year-old audio equipment manufacturer and exporter in south China's tech hub of Shenzhen has successfully pivoted to the domestic market amid the sweeping tariffs from the United States by forging a collaboration partnership with a company in Beijing.
In collaboration with a Beijing-based solution provider, the company has not only overcome a sudden export slump, but also unlocked new growth opportunities in China's booming smart home entertainment sector.
Chen Weisong, founder and chairman of Shenzhen Shengtianlong Audio-Visual Technology, and Hei Weiwei, general manager of Beijing Yuanxiang Intelligent Technology, are now working together to develop cutting-edge smart audiovisual products aimed at revolutionizing home theater experiences.
They made acquaintance only a month ago, after Chen posted a collaboration notice on a domestic supply chain platform to explore new opportunities and fill the gap created by withdrawn export orders.
Chen decided to expand into the European, Middle East and Southeast Asian markets when he sensed growing trade tensions between China and the United States in 2018, and reduced his company's reliance on the U.S. market to just 20 percent. However, for a renowned brand with more than 200 patents, that still means millions of products exported to the United States per year. After U.S. President Donald Trump announced the "Liberation Day" tariffs in early April, Chen had 3 million yuan (about 420,000 U.S. dollars) worth of products stranded in warehouses.
Fortunately, only three hours after Chen posted the notice, he received a call from Hei, who flew to Shenzhen the next morning.
"It was rare to see exporters posting product information and cooperation notices on the domestic supply chain platform. I was just wondering why there were some more suppliers on the platform, and it turned out they were all very strong in their businesses," Hei said.
Hei had been searching for high-quality audio suppliers to jointly develop ultra-high-definition audiovisual products that meet China's industry standards, addressing the long-standing issue that Chinese products are strong in visual performances but weak in acoustics.
Impressed by the quality of Chen's products and his company's research and development capabilities, Hei proposed a partnership to combine their strengths and develop smart home theater systems together.
"When we presented our joint product concept to downstream businesses, they said they will place orders as soon as our products are ready," Hei said.
Motivated by urgent market demands, Chen and his team have been working tirelessly, visiting suppliers in various cities like Huizhou and Jieyang to source raw materials and core components for their new products.
Chen found that the domestic audio industry was witnessing increased specialization, with increasing demand for premium audio products driving innovation in materials and manufacturing processes.
"Domestic consumers' rising requirements for the quality of audiovisual products, including acoustic experiences, are pushing us to upgrade our designs, techniques, and supply chain partners. So, we are striving to meet domestic needs. This market holds huge potential," said Chen Zhigang, a Huizhou-based supplier.
The first product developed by Chen and Hei has already been released and started small-scale production, with five more series in development.
Meanwhile, the one-month halt of U.S. orders has ended, with American clients placing additional orders for 10 more containers, so Chen's six production lines are all running at full capacity.
"This year, we plan to sell 20 or 30 percent of our products in the domestic market. My goal is to raise the proportion to at least 50 percent in the future," Chen said.
Shenzhen audio exporter seeks domestic partners amid US tariffs
