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.