Get ready for your exports

In the export business, it doesn’t matter if you are a newcomer entering into international market for the first time or an established exporter looking to grow your business abroad. Your main challenge is always to find buyers for the goods or services you provide. It is never easy to sell in an unknown country or market. There are cultural differences,  physical distances and language barriers to consider, among other things. Luckily, we all now live in a time where technological advances have shrunk our world and brought us closer. This makes it easier to find foreign buyers for your export business today than it was, 20 years ago.

This article deals with the two main components of an effective export business strategy:

1. Finding a market: How to identify foreign markets for your export product with the help of product analysis and market research

2. Finding buyers: Offline and online ways to find and connect with foreign buyers

How to get import/export ready

This stage is all about knowing your market and competition and creating opportunities for your business and these are the digital tools you can use:         

NiryatBandhu: Learn the basics with the Indian Institute of Foreign Trade’s online certificate programme in export and import management, under the Commerce Ministry’s NiryatBandhu scheme for mentoring entrepreneurs in international trade. The course runs five days a week for two hours daily and is reasonably priced. 

Indian Trade Portal: Managed by the Federation of Indian Exports Organizations (FIEO), this website has information on tariffs, taxes, concessions, import-export policies, preferential trading agreements and import statistics of multiple countries, along with free online tools such as monthly e-bulletins and FAQs on relevant topics.

FIEO GlobalLinker: This is a platform for small businesses to network with fellow entrepreneurs across the world. Additionally, you can use GlobalLinker to create your free online store and digital catalogue, which will help your business gain visibility.

Farmer Connect: Farmer Connect, an initiative of India’s agricultural products export promotion body APEDA, helps exporters source farm products for export. Exporters can post offers to buy farm goods and find matching product enquiries from sellers on the portal, which also facilitates contact between buyer and seller.    

Finding a market for your export business

To sell a product, you need a market for it. In export, this is a country or countries with a demand for your product. So, how does an exporter go about finding this market? With market research and product analysis. To find a market for your product, ask yourself these questions and find the answers to them:

1. Where is the demand? 

Find out which country has a demand for your export product. For example, if you are an exporter of basmati rice, then Iran is the top importer of this product from India, followed by Saudi Arabia. If you sell seafood, the United States is the top importer, followed by China. Where can you find this information? The websites of government organisations such as the Agricultural and Processed Food Products Export Development Authority (APEDA) and Marine Products Export Development Authority (MPEDA) are a rich source of such information.

2. Is it a stable market?             

It is not enough to zero in on a country with the highest requirement for your product. You have to make sure demand is consistent and the market is growing. Again, ask yourself: 

  • Does the importing country produce what I export? 
  • If not, could they start producing it any time soon?
  • Is demand there subject to seasonal trends?
  • Has demand been consistent or grown in recent years?
  • Can the importing country get the same product from a rival supplying country more easily?

It is important to think long-term. Instead of focusing on the top importing country, you might want to consider a country with a comparatively smaller market but with the potential for more growth in the future.

3. Is it profitable?

A key challenge for an exporter is to decide on the right price for their product. This price must be reasonable, yet competitive. A high price can be competitive if it comes with a high product quality, prompt delivery, specialised packaging and added benefits. Many factors affect the profitability of an export product, such as:

  • The price a foreign buyer is willing to pay for your product
  • Additional costs that can increase the price of your export product, such as freight, clearing and forwarding, terminal handling, loading and unloading, packaging, marking and labelling, insurance, guarantee/warranty, and marketing
  • Factors that can reduce the price of your export product, such as customs and excise duty refunds, export assistance schemes, export credit facilities
  • The price offered by a rival supplier for the same product

4. Are there trade barriers?

Sometimes, exporters might run into trade barriers when exporting to some countries. These might be in the form of tariff restrictions (such as high taxes) imposed by the importing nation or non-tariff barriers, such as a ban on the entry of certain goods and services, the imposition of import quality regulations, requirements for special licensing, standards, labelling, testing and certification, and so on. For example, the European Union in 2015 banned the import of Indian mangoes after finding fruit flies in consignments. The ban was later lifted. One way to avoid trade barriers is to export to countries with which India has bilateral/multilateral trade agreements that offer regulatory relaxations and other conditions of mutual benefit. Many countries also offer incentives on certain imports to meet domestic scarcity. 

5. Is the climate business-friendly?

Exporters must take into account the economic and political stability of the importing country. Look for indications of unpredictable political and economic scenarios that might harm your prospects. Read up on environmental and legal practices so you don’t receive nasty surprises later on.

Finding buyers for your export business

Once you’ve settled on a market for your export product, the next step is to find buyers within this market. There are both online and offline ways to find foreign buyers. Being members of the internet generation, let’s look at the online options first:

Online methods

  • Website/blog: The first step is to set up a website for your business. Make it attractive and professional as first impressions matter. Including regularly updated information about your products and manufacturing processes, with photographs, can give your business credibility. Using search engine optimisation (SEO) will ensure your website pops up on Google whenever a relevant search request is made by potential buyers in your target country. Search Engine Marketing and Google Search Console are other tools at your disposal to increase your website’s visibility. Apart from a website, you can start a blog to inform potential buyers about your products. 
  • Social media: Social media can be a powerful ally in your search for foreign buyers. A presence on Facebook, Twitter, Instagram, YouTube, LinkedIn and Reddit can help you reach out to a global audience. You can join a Facebook group that matches buyers and sellers and offers trade tips, for example. There are advantages to having a social media marketing strategy for your export business – it isn’t difficult to come up with a well-thought-out strategy and, best of all, it doesn’t cost a lot of money.          
  • Email marketing: Another internet marketing strategy you can use is email marketing, which is when you send out newsletters, sales promotions and exclusive deals and offers to potential buyers via email. An email is unexpectedly effective. It has a better chance of being seen than a social media post. You can build your own email list or buy a database of importers and stores. Just remember to follow the relevant laws on business emails. Spamming is not okay.              
  • B2B websites: Registering with business-to-business (B2B) websites such as Alibaba, Global Sources, DHgate, Made in China, Tradewheel and iOffer is another effective way of becoming visible to a wide customer base. These platforms attract millions of buyers and sellers. Chinese e-commerce firm Alibaba, for instance, is the world’s third-largest retailer after Walmart and Amazon. There are also numerous Indian B2B companies – IndiaMART, TradeIndia and Exporters India – that match exporters with buyers.
  • FIEO GlobalLinker: As its name suggests, the FIEO GlobalLinker connects sellers and buyers. It allows exporters to set up their online stores and develop a digital catalogue that can be accessed by buyers across the world. Additionally, it uses AI to identify businesses that might be interested in what you export.

Offline methods

If social media and online methods are not your cup of tea, there are some tried and tested offline ways of finding foreign buyers. They might take a little more of your time and money, but they’re well worth the effort:

  • Trade fairs and expos: You can make a trip to a trade fair in your target country. Many countries host several trade fairs a year and these attract hundreds of thousands of buyers and sellers. If you’re thinking of exporting to China, for example, you could check out the Canton Fair, the country’s largest trade fair, which is held twice a year. If flying to another country is too much trouble, India hosts many trade fairs and expos that attract international buyers. You can find information regarding these events on the Federation of Indian Export Organisations (FIEO) and Export Promotion Council websites. At a trade fair, you can show prospective buyers product samples, answer their questions and even strike deals. Because you deal with buyers in person, trade fairs are a great way of forming long-term relationships.
  • Export promotion bodies: India has several government bodies set up to promote the country’s exports. These include the 14 Export Promotion Councils and five Commodity Boards under the Ministry of Commerce and Industry. Exporters can take their help to find foreign buyers. These bodies provide information and organise delegation visits to various countries so you can explore market opportunities or participate in trade fairs there.
  • Chambers of commerce: Chambers of commerce or trade associations are large networks of businesses and companies found in countries across the world. They can be a source of information about importers for your product in your chosen country. Alternatively, you can become a member of a chamber. This means your company is registered on the chamber’s website, which helps you gain visibility among buyers.  
  • Third-party agencies: Your target country has several third-party agencies that can help you find buyers, generate sales for your product and guide you through language and cultural barriers. Third-party agencies can be:
  • Foreign agencies – State-sponsored trading companies that import goods for their country in bulk. There are different agencies for different products. 
  • Buying agents – Bulk buyers looking to import from your country. Some of them work for foreign agencies. Information related to foreign agencies and buying agents can be found at the importing country’s embassy in your country.
  • Foreign wholesalers – Bulk buyers who resell the imported products in their country. They, thus, work as middlemen. Dealing with them instead of government-controlled foreign agencies might be quicker, though margins might be smaller.
  • Commission agents – Foreign agents who connect the above mentioned foreign wholesalers with goods suppliers in other countries for a commission.     
  • Your own salesperson: Your own sales agent or salesperson in your target country who helps you find buyers for your product and finalises orders, all for a commission. A good sales agent also does market research, takes the lead in negotiations, performs after sales services and manages your accounts.                       
  • Market research companies: When entering a new market, information is key. Market research companies, as their name suggests, specialise in market research and studies. You can pay them for information specific to your product or industry or for the directories of importers in a particular country.
  • Industry resources and personal contacts: Finally, there are your personal contacts (friends, family) and business contacts (fellow businessmen, companies) who can help you get in touch with new international buyers.

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