What makes a company achieve success in an export market? Lu Rahman looks at some of the ways businesses can facilitate growth overseas.
Global
I wonder if we don’t give enough thought to the graft and strategy that goes into achieving business success in overseas markets. When MPN visits international trade fairs we encounter a host of companies that make trading in export markets look like a walk in the park. It’s easy to overlook the fact that immense planning and effort has gone into attending these events.
According to the Observatory of Economic Complexity (OEC), the US is the second largest export market in the world. In 2016 the country exported goods worth $1.42 trillion and while during the five years between 2011 and 2016 exports from the US decreased at an annualized rate of -3.494% – according to the OEC – there are still exports opportunities to be had. Canada and Mexico top the list of companies that US businesses look to trade with. The is followed by China, Japan and the UK.
Canada also has a strong export market, coming in at twelfth globally, and listing the United States, China and the UK as its biggest export markets. In 2016 Canada’s export market was worth $387 billion. Just behind it is Mexico which exported $373 billion in the same year. The medical instrument export market in both the US ($26.2 billion) and Mexico was worth 1.8% ($6.87 billion).
Know your markets
To achieve growth in overseas markets, it is important to know where to target and if there is a need for your products. For both Mexico and Canada, China has become a key export market for medical equipment. According to Export.gov which helps US companies plan global trade strategy, the medical device sector is one of the fastest growing markets and has held on to double digit growth for over a decade. The organisation highlights that given that globally the medical device market is 42% the size of the pharmaceutical market, however in China it is around 14%, there is significant opportunity for growth.
Export.gov outlines the way in which the Chinese medical device market is split into two – domestic manufacturers supplying low to mid-range products and foreign-sourced, high-end products supplied by big industry players such as GE and Siemens.
With certain markets, of which China can be one, it’s worth determining if certain regions are open or closed to foreign business. Competition from state-owned organisations that benefit from strong financial and technological resources can be high. Are you prepared?
Target your audience
Advertising in niche business-2-business publications is a good way of reaching potential new customers. The combination of print magazines and social media access offered by b2B titles allows huge potential to reach an news audiences.
Trade fairs can be a great way to meet new overseas customers as well as engage in meaningful conversations to discover what they are looking for from a new business partner. The financial outlay needs to offset any potential new business. There are the stand and associated travel costs but it’s also worth thinking about the costs of having staff out of the office for the event duration and the impact this will have on workflow.
Regulations and approvals
A key consideration when looking at export markets, are regulations, administration and approvals of that country and region. It’s crucial that you get to grips with the legal and regulatory environment of the country you are exporting to.
Contacting the embassy of the country in which you plan to do business is a good place to understand the admin requirements of a particular place. Keeping a solid documentation trail is also vital as is understanding the legislation and legal requirements attached to the movement of goods across borders.
The simple things
The power of language shouldn’t be underestimated. Having visited more trade fairs than I can count, it can be frustrating when there’s no one on the stand that can communicate with you. If you’re travelling to a country where there may be a language barrier is it worth hiring a translator?
And finally, one company I know that operates successfully in overseas markets explained to me that patience is a virtue. It takes time to build up longstanding business partners and create a network of customers in a particular field. Don’t write off an event if it doesn’t yield massive results instantly. It takes a while for your face and your business to become known.