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Growth of industrial manufactured exports in Latin American countries contribution

RGX Consulting

Growth of industrial manufactured exports in Latin American countries contribution

In 2017 we conducted a study of the purchasing behavior of 2,170 small and medium-sized importing companies from Brazil, Chile, Colombia, Costa Rica, the Dominican Republic, Mexico, Panama, Peru and the United States, which was complemented in 2018 with the participation of 1,041 small and medium importers from Argentina, Brazil, Chile, Colombia, Costa Rica, Panama, Peru, the Dominican Republic, Nicaragua, Guatemala, Mexico and the United States.

The panel of interviewees were importing companies with less than 150 employees, among which more than 1,000 companies from the industrial manufacturing sector participated (also from Apparel, Textile, high technology and automotive sectors). Those for purchasing or imports responsible answered a questionnaire that ran from the international supplier search stage to aspects of import logistics and supply chain.

In parallel, we are providing services for Export Promotion Agencies such as Promperú (Peru) and Proesa (El Salvador), which involve interviews with importers from practically all Latin American countries, as well as from the United States.

The results of the Study, as well as our regular contact with importers in America, allow us to identify international purchase or import behavior of these companies, which are highlighted below:

1) New international suppliers contract

34% of importers in this industry use Internet search engines to find new suppliers. At the same time, 21% do not look for them, but rather wait for potential suppliers to contact them digitally.

As a result of the pandemic, the concept of “low contact economy” was established among importers, which will intensify the trend of using search engines and online marketplaces, as the main mechanism of contact with new possible suppliers. This behavior highlights the need to equip exporters with habits, strategies and tools to position themselves adequately with potential buyers looking online.

With some exceptions, most Latin American countries are still lagging behind in the incorporation of online marketplaces, with tools for virtual business rounds, which connect the sector exportable supply with international demand online.

2) Importance of financing:

68% of importers of industrial manufactures have indicated that “flexible payment terms and / or financing” are a fundamental reason why they would choose a new supplier.

Making a more exhaustive breakdown, the countries that are most likely to change providers if they offer them “flexible payment terms or financing” are Panama, Argentina, Colombia, Peru and Mexico.

In a context of less foreign trade activity (such as the pandemic), it is essential that financial institutions identify export “gazelles” (exporting SMEs with great export competitiveness) in their countries, and protect them from the recessive context, offering solutions of payment and financing that help them retain and attract new international clients who, to buy them, are going to request financing in the payment.

3) E -Commerce sector use:

Four out of ten importers indicated that they buy products online. Among them, 67% buy directly from the website of their supplier, the exporter. Additionally, 59% of importers state that the website of a supplier influences the evaluation of a new supplier, with the most valued content being the following:

  • Technical specification of the product
  • Product certification / product warranty
  • Section “Who we are / about us”
  • Export information on the particular product (commercial conditions, freight information/ transport, and others)

At the same time, a quarter of those surveyed (23%) mentioned having used B2B platforms, such as Alibaba, Amazon and / or eBay, among others, to make imports.

These results warrant technical assistance interventions with exporting SMEs to ensure that they have an online presence (web, marketplaces) in line with what international demand expects.

4) Import Logistics:

80% of industrial manufacturing importers admitted to having delays in the import process, while production delays are the main cause, as stated by exporters and importers.

The second and third most common obstacles indicated by importers were the additional import costs in customs, and national logistics, that is, the internal distribution of the product in the importer’s place.

While some more aggressive exporting economies are adopting policies to subsidize international transport, which allow greater competitiveness of exporters, others are negotiating alliances with large transport companies with the same objective. This “race” will be key to sustaining and increasing industrial manufacturing exports in the post-pandemic stage.

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Trade Intelligence

Trade Intelligence

We specialize in research and studies in international markets, focusing on demand (importers), identifying success factors for the development of industry exports to that destination and sector.

Buyer Recruitment for B2B events

Buyer Recruitment for B2B events

Through our constantly updated databases, our expertise focuses on providing validated buyer lists, and inviting importers to participate in b2b events.

Specialized webinars

Specialized webinars

Through our constantly updated databases, our expertise focuses on providing validated buyer lists, and inviting importers to participate in b2b events.

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Trading

Foreign trade in the cleaning supplies industry

RGX Trading

Foreign trade in the cleaning supplies industry

The cleaning sector is one of the areas where RGX has been seeing a sustained increase in international demand. Exercising a sector division at a global level, it is possible to fragment it into three segments, commercial cleaning, which according to Cleaning Service Reviewed occupies most of the industry with 55%, followed by industrial cleaning with 30% and residential cleaning with 15%. In terms of growth rate, in 2019, Commercial Cleaning registered the highest gains with an Annual Growth Rate of 5.13%, followed by Residential Cleaning with 4.85% and finally Industrial Cleaning with 4.17%.

Taking into account Chapter 34 of the HTC: “Soaps, organic surface agents, laundry preparations, lubricant preparations, artificial waxes, prepared waxes, cleaning products, candles and similar items …” the purchase demand is atomized, and there are more than 20 players who take about 60% of the share of world imports. However, the Top 10 of the main applicants are represented by the following countries:

 Of these destinations, the countries that most mobilized their operations, increasing their international purchases steadily in the last five years, are:

  • United States: The North American market shows signs of constant increase from 2015 to 2019, and throughout the period the increase is 3.3%. 
  • United Kingdom: It is a market that since 2016 shows its increases in global purchases, showing a year-on-year growth of approximately 1%. 
  • Canada: Since 2016 its imports have advanced slightly, but steadily, in fact, the increase in the entire period 2016-2019 is 1.3%.
  • Russia: This market, measured by its geographical extension, is not only one of the world’s main demanders, but its increase in imports is clear, it increased steadily throughout the five-year period 2016-2019 by 4.9%.

Avoiding those usual destinations, it is interesting to also pay attention to the markets that do not make up the lot of the main applicants, especially because they show increasing behavior in their global purchases, in this aspect it can be emphasized:

  • Poland: It is a country that represents 2.1% of world imports, but it has also had a continuous and constant increase in its acquisitions in the last five years, that is to say that from 2015 to 2019 its purchases rose by 6.6%.
  • Singapore: It currently symbolizes 1.2% of global purchases accumulated in the last five years, in addition it also exhibits progression trends that translate into an increase of 4.1% between 2016 and 2019.

In general terms, exporters in the cleaning industry sector should know that global trends indicate that commercial cleaning will be the segment with the greatest promise, especially due to the direct relationship with the health sector that constantly requires disinfection , as well as large companies that demand a safe and disinfected environment for their workers. In the same way, and given the global crisis, self-employment is expected to increase in the coming years, especially the residential cleaning business.

For these reasons, our recommendations for exporters in the sector are: 

1. Foreign markets selection: Emphasize on international markets with capacity for continuous demand and growth, as shown by the markets of the United Kingdom, the United States, Singapore, Poland, Russia and Canada.

2. Target segment determination: Knowing that they are demanding and highly competitive markets, it is suggested to accurately determine the target segment to attack, be it commercial, residential or industrial cleaning.

3. Adjusted market Exportable offer: Have an ecofriendly alternative within the exportable offer, in this sense it is necessary to bear in mind the new tendencies for environmentally friendly products, especially taking as a reference the attitudes and behaviors of consumers of These suggested markets, who prefer the use of organic products in every way.

4. Logistics solutions: Offer shipping and delivery solutions, that is, be willing to sell in DDP condition as it is highly valued by the sector. 

5. Payment terms: Offer payment terms and alternatives, financing in commercial operations, and have the possibility of receiving payments online. 

6. Cross-border E-Commerce: Having the possibility of placing orders online, it is worth noting that this has been maximized in the update, especially because it allows buyers to take advantage of discounts, evaluate product alternatives and assess fast shipping.

RGX has recently signed a collaboration agreement with the International Sanitary Supply Association (www.issa.com) that brings together more than 18,000 companies in the sector worldwide, which allows us preferential access to importers and distributors in the sector, which we connect with potential exporters that supply them, in the 53 countries in which we have coverage. 

If your business operates in this industry, simply email us at: customerservice@rgxonline.com and a consultant will contact you within 48 hours.

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Trading

The purchasing behavior of SMEs importers of industrial manufactures in the Americas

RGX Trading

The purchasing behavior of SMEs importers of industrial manufactures in the Americas

In 2017 RGX conducted a study of the purchasing behavior of 2,170 small and medium-sized importing companies from Brazil, Chile, Colombia, Costa Rica, the Dominican Republic, Mexico, Panama, Peru and the United States, which was complemented in 2018 with the participation of 1,041 small and medium importers from Argentina, Brazil, Chile, Colombia, Costa Rica, Panama, Peru, the Dominican Republic, Nicaragua, Guatemala, Mexico and the United States.

The panel of interviewees were importing companies with less than 150 employees, among which more than 1,000 companies from the industrial manufacturing sector participated (also from the clothing, high technology and automotive sectors). Those responsible for purchasing or imports answered a questionnaire that ran from the international supplier search stage to aspects of import logistics and supply chain.

The results allowed us to identify the behavior of international purchasing or importation of these companies. Among the most salient aspects are:

1) Contact with new international suppliers

34% of importers in this industry use Internet search engines to find new suppliers. In parallel, 21% do not look for them, but wait for potential suppliers to contact them electronically.

This leads to incentivize exporting companies in the sector to use search engines more intensively as promotional tools (SEO, Adwords, etc.) and at the same time identify buyers in the target market and contact them directly.

At RGX we provide tailored “Importers List” to address buyers in the indicated markets, this includes a supervision of the communication to be sent to the buyer, to ensure that the export value proposition conforms to what the buyer expects to receive.

2) Importance of financing:

68% of importers of industrial manufactures have indicated that “flexible payment terms and / or financing” are a fundamental reason why they would choose a new supplier.
Making a more exhaustive breakdown, the countries that are most likely to change providers if they offer them “flexible payment terms or financing” are Panama, Argentina, Colombia, Peru and Mexico.

It is important that the exporter review the possibility of converting the payment term into a commercial sales argument, improving the financing conditions under which their counterparts currently pay.

3) Use of E-commerce in the sector:

Four of ten importers indicated that they buy products online. Among them, 67% buy directly from the website of their supplier, the exporter. Additionally, 59% of importers state that the website of a supplier influences the evaluation of a new supplier, with the most valued content being the following:

• Technical specification of the product
• Product certification / product warranty
• Section “Who we are / about us”
• Information on the export of the particular product (commercial conditions, information on freight / transport, etc.)

At the same time, a quarter of those surveyed (23%) mentioned having used B2B platforms, such as Alibaba, Amazon and / or eBay, among others, to make imports.
These results indicate the importance of having a website with specific information for international buyers for industrial manufacturing exporters. At the same time, it reveals the importance of having a presence on b2b platforms that connect them with potential buyers.

4) Import Logistics:

80% of industrial manufacturing importers admitted to having delays in the import process, while production delays are the main cause, as stated by exporters and importers.
The second and third most common obstacles indicated by importers were the additional import costs in Customs, and national logistics, that is, the internal distribution of the product in the importer’s place.
This behavior indicates the opportunity for industrial manufacturing exporters to offer delivery solutions at destination (Group D Incoterms), offsetting the greater financial immobilization with pre-financing or export financing instruments that do not substantially alter the prices of the products.

At RGX we currently select exporting companies with high capacity to compete in the international market, and incorporate them into its virtual business agenda service with tailored buyers in more than 50 countries.

If you want to qualify for our Export Competitiveness Methodology and qualify for the export acceleration service, click below.

Markets definition

Using our Market Selectivity Methodology, we identify potential markets for your products.

Importers List

Verified lists of importers, distributors and retailers.

Meetings with buyers

This service includes confirmed meetings with prospective buyers, distributors or partners in the target market.

Categories
Consulting

RGX obtains a high rating as a service provider from the Bogota Chamber of Commerce

RGX Consulting

RGX obtains a high rating as a service provider from the Bogota Chamber of Commerce

The Bogota Chamber of Commerce annually conducts the evaluation process of its suppliers regarding the contracts it has signed with the Entity and that are in force or that were in force within the immediately preceding calendar year.

 The evaluation process is carried out by the contract supervisor, who analyzes compliance with the following criteria:

• Opportunity in the delivery of documents.

• Conformity of the good or service contracted.

• Opportunity to deliver goods or services.

• Timeliness in reporting.

• Timeliness in billing delivery.

• Compliance with guarantees.

RGX has provided, in 2018 and 2019, the service of international promoter of the Chamber’s Internationalization area, carrying out Business Plans and Business Agendas for exporting companies from Bogotá, in the USA, Europe and Latin America Markets, of the manufacturing sectors industrial, services and clothing.

The rating obtained was 86 points out of a possible total of 100. We thank the Bogota Chamber of Commerce for the rating granted, which reinforces our commitment to offer specialized services for business agendas and commercial plans in 54 markets.

If you wish to obtain our references and request more information about our services of business agendas for exporters or recruitment of buyers for fairs or virtual business rounds, please contact us at customerservice@rgxonline.com and we will respond as soon as possible.

Trade Intelligence

Trade Intelligence

We specialize in research and studies in international markets, focusing on demand (importers), identifying success factors for the development of industry exports to that destination and sector.

Buyer Recruitment for B2B events

Buyer Recruitment for B2B events

Through our constantly updated databases, our expertise focuses on providing validated buyer lists, and inviting importers to participate in b2b events.

Specialized webinars

Specialized webinars

Through our constantly updated databases, our expertise focuses on providing validated buyer lists, and inviting importers to participate in b2b events.

Categories
Marketing

SMEs in America in trouble when it comes to exporting: only 1% are ready to compete globally

RGX Marketing

SMEs in America in trouble when it comes to exporting: only 1% are ready to compete globally

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RGX developed a study sponsored by FedEx Express in which it interviewed 1,200 SMEs from 12 countries of the Americas. The e-commerce gap is one of the determining factors which pushes this result.

Buenos Aires, August 31, 2020 – RGX, a leading company in the Business segment cross border, announced the results of its study “Export Competitiveness Index of the SMEs of America in times of COVID-19 ”. The analysis, sponsored by FedEx Express, a company a subsidiary of FedEx Corp. (NYSE: FDX) and the world’s largest express carrier, measures the competitive performance of small and medium-sized exporting companies (SMEs) in America.

The study includes interviews with 1,200 exporting SMEs with up to 150 employees in the United States. United States, Latin America and the Caribbean, and classifies companies according to a variety of key indicators such as: the diversification and complexity of the markets to which companies they serve, the ability to offer logistics and financing solutions, and the level of support to international buyers, as well as the availability of a website with the capacity to carry out transactions or receive orders online. These factors are important for companies compete successfully in an international ecosystem, especially in times of crisis.

After analyzing the ten key indicators, the study concludes that only 15 companies – or 1%, of the 1,200 interviewed- achieved a score that shows that they are prepared to compete at global scale. The full results of the RGX study can be viewed through the following link: www.rgxonline.com/ECI2020/

“While the world is asking to import mostly online, with shipping logistics solutions and product delivery at destination and with zero stock policies, this survey shows that 77% of the exporting SMEs interviewed do not have a website with capabilities transactions for e-commerce ”, commented Diego Frediani, CEO of RGX and author of the report. “Seven out of ten companies export their products without including shipping solutions or delivery to its international buyers, which warrants the urgent implementation of actions and active policies to reduce these gaps “, concluded the manager.

The importance of diversifying the markets these companies serve, as well as the ability to be able to offer robust solutions online has become even more evident during the current health crisis derived from the COVID-19 pandemic. Regarding this, the study supports the fact that there is a gap in cross-border e-commerce in the Americas:

➢ 46% of the SMEs interviewed have a website with information on their products and services, but without the possibility of receiving online orders.

➢ 8% of the companies interviewed do not have a website.

➢ 77% of the SMEs interviewed cannot generate electronic commerce transactions through their own website.

➢ 23% use B2B platforms to market their products, but 48% do not use Internet to carry out marketing initiatives.

Another factor of great influence on the competitiveness of an exporting company is the ability to offer logistics solutions (i.e. transportation to the destination market and delivery to the
final consumer). The study reveals that 14 of the 15 SMEs (which obtained more than 80 points out of 100 in the study) have logistical solutions.

Financing options were also ranked as important to attracting and retaining customers. In this category, SMEs from Brazil, Guatemala and the Dominican Republic demonstrated have a greater financing capacity for its clients. Likewise, it was found that 44 of each 100 companies interviewed do not grant financing to their international clients, which may be limiting their growth opportunities.


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