"Where are you from?" "Mauritius." One brown-haired buyer Elbro answered questions at the AsiaWorld-Expo. It took our reporter a while to realize it's a country in Africa. Global Sources' China Sourcing Fair: Gifts & Premiums is being held at this venue from April 28 to May 1, where over 100 Zhejiang export companies are participating. Zhejiang exhibitors here have the same concern that the Canton Fair exhibitors in Guangzhou miles away have: now that the light-skinned, blue-eyed buyers from the U.S. and Europe have dwindled, how could they win orders from the emerging market buyers who have stronger buying interests?

Transformation: Adding scents to the products

A year ago, one Yiwu baggage supplier named Alice was being troubled by two issues: exchange rate loss caused by Yuan appreciation and escalating production costs triggered by an oil price surge. Now, these are not key issues. The first priority for her now is retaining the existing clients while working to explore new markets.

Alice said: "Our government has introduced a host of measures meant to spur export such as the higher tax rebates. The prices of oil and other raw materials have also been falling. So our production costs have actually dropped by over 20%." However, she is still worried: "We sold millions of gift bags last year, mainly to the U.S. and European buyers. But there's no guarantee how many order we're going to get this year."

For Alice, the key to survival is the orders of the existing clients. She believes many Yiwu exporters folded because most of their buyers from the U.S. and Europe had gone. She added: "Just relying on existing clients will not bail you out. You need to exhibit in trade shows to attract more new buyers."

Yanli, a Yinzhou craft supplier showcasing colorful hanging products at his booth, said: "We met fewer buyers this year, particularly those from the U.S. and Europe." He said about a dozen buyers made inquiries that morning and half of them were from emerging markets including Middle East and Africa. He added: "Hit by the financial crisis, demand from the Western markets shrank significantly. We are thinking about ways to tap into emerging markets like the Middle East." The supplier mainly manufactures car hangings and home hangings. As scented products sell well in the Middle East, they have now added scents to their products. But whether these products will be embraced by the Middle East market, much will hinge on their participation in the upcoming Dubai trade show.

Buyers: Strong demand from emerging markets

While the Western markets are cooling down, emerging markets are heating up. An Indian buyer, Imran Peeroo, felt the obvious difference in hospitality from the exhibitors. He said: "These suppliers didn't give us such a warm reception before. But now they are patiently listening to and answering our inquiries." Peeroo buys gifts and premiums for the Middle East market. He revealed that demand there has also fallen by 10%. However, this is already much better than the U.S. market, which has fallen by 50%. No wonder these emerging market buyers have become so popular.

Despite the weak economy, some emerging market buyers we interviewed revealed that demand for gifts and premiums remains strong. Eastern Europe buyer Christian Jensen, who had just visited the Canton Fair, was looking for better gifts and premiums for her clients. "People now may have spent less, but they still need to buy necessities like shoes or bags. The weaker the economy is, the more promotions companies need to do. That's why gifts and premiums are still highly demanded. Elbro, the buyer from Mauritius, said one of his clients, a beer retailer, had asked him to buy little gifts back home for beer promotions.

Salvation: can new markets save the day?

Global Sources Exhibitions General Manager Tommy Wong said: "Our gift and premium show features 1,150 booths and 35% of them are from Zhejiang." The figure is more or less the same as last years', but about 20% of them are new exhibitors. Wong added: "We noticed that many small exporters have been out of business. The financial crisis is shaking up China's export industry."

He said many small companies came to exhibit without specific targets in the past. They have been over-dependent on the U.S. and European markets, and now they're finding business difficult. The new exhibitors that have taken their places are better prepared, more target-oriented and have a broader customer base.

Wong added: "The Zhejiang and all China export suppliers now have to take a three-pronged approach: retain existing buyers from the U.S. and Europe; explore emerging markets such as the Middle East and South America; expand in domestic market." He believes hard times are still ahead for these exporters. A recent survey conducted by Global Sources' Chief Executive China magazine shows that 54% surveyed buyers expect to decrease their total import value in 2009 and buyers' biggest concern in 2009 is declining consumer spending. Another survey on China exporters shows that 39% surveyed executives expect a fall in sales in 2009 and 15% expect revenues to decline by more than 25%.

One Wenzhou craft gift exporter said: "We've considered turning our focus to the domestic market, but it's too difficult for us." They'd rather pay attention to the emerging markets in South America, African and Eastern Europe and see if these untapped markets would bring them better prospects.

While giving quotations to visiting buyers in front of their booths, all Zhejiang exporters had the same question in mind: Before the markets in the U.S. and Europe recover, are these emerging markets able to bail them out?