Exporting to Emerging Countries – Opportunities and Challenges
Here, we look at the hottest export/import markets among emerging countries for small businesses and discuss the opportunities they have on offer for exporters. We also tell you about the challenges you will no doubt encounter when you export/import goods to these markets.
Export to Brazil
Brazil offers several great opportunities for you if you export agricultural processing equipment, computers and IT products and services. That’s because Brazil has been revamping its IT infrastructure, is a major agricultural country and has a large and growing population with rising disposable incomes. However, before exporting to Brazil, it is important to crosscheck with local officials to ensure that the products are assigned to the correct category as the restrictions in Brazil are based on classification. Brazil is the 22nd largest export economy in the world and the 56th most complex economy according to the Economic Complexity Index (ECI).
In 2013, Brazil exported $247B and imported $238B, resulting in a positive trade balance of $9.2B. In 2013 the GDP of Brazil was $2.25T and its GDP per capita was $15k. The top exports of Brazil are Iron Ore ($33.4B), Soybeans ($23B), Crude Petroleum ($13.2B), Raw Sugar ($12.4B) and Special Purpose Ships ($7.85B), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Refined Petroleum ($17.6B), Crude Petroleum ($14.7B), Cars ($9.2B), Vehicle Parts ($8.38B) and Petroleum Gas ($7.76B). The top export destinations of Brazil are China ($46.1B), the United States ($25.2B), Argentina ($19.3B), the Netherlands ($16.3B) and Japan ($8.58B). The top import origins are China ($36.8B), the United States ($36.1B), Argentina ($16.3B), Germany ($15.2B) and Nigeria ($9.7B).
Export to Colombia
There are several reasons to be excited about Colombia. It’s been almost 2 decades since Colombia took to free market capitalism with such fervor. Since then it has become one of the most dynamic economies in South America. You can make a lot of money by selling security services and security equipment, transportation, information technology and consulting, data processing equipment and services. Colombia is the 53rd largest export economy in the world and the 54th most complex economy according to the Economic Complexity Index (ECI).
In 2013, Colombia exported $61.2B and imported $57.3B, resulting in a positive trade balance of $3.85B. In 2013 the GDP of Colombia was $378B and its GDP per capita was $12.4k. The top exports of Colombia are Crude Petroleum ($27.7B), Coal Briquettes ($7.61B), Refined Petroleum ($4.35B), Gold ($2.28B) and Coffee ($2.04B), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Refined Petroleum ($6.3B), Cars ($2.34B), Planes, Helicopters, and/or Spacecraft ($2.03B), Computers ($1.95B) and Broadcasting Equipment ($1.57B). The top export destinations of Colombia are the United States ($19.3B), China ($5.1B), Panama ($3.26B), India ($3.14B) and Spain ($2.92B). The top import origins are the United States ($16.4B), China ($10.1B), Mexico ($5.39B), Brazil ($2.68B) and Germany ($2.15B).
Export to India
India is one of the most promising export destinations in the world, largely because of the young age of its population – over half of India is under 35 years of age. You can make a lot of money by selling electronics, education services, food processing and cold storage equipment, industrial textiles, clean energy and pollution control equipment in India. But the Indian market is full of challenges such as high import tariffs, diverse cultures, multiple languages, poor transport and infrastructure. India is the 18th largest export economy in the world and the 50th most complex economy according to the Economic Complexity Index (ECI).
In 2013, India exported $290B and imported $420B, resulting in a negative trade balance of $129B. In 2013 the GDP of India was $1.88T and its GDP per capita was $5.42k. The top exports of India are Refined Petroleum ($56.8B), Packaged Medicaments ($11.8B), Jewellery ($10.2B), Rice ($7.71B) and Cars ($5.57B), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Crude Petroleum ($132B), Gold ($36.2B), Coal Briquettes ($14.3B), Petroleum Gas ($13.3B) and Diamonds ($13.1B). The top export destinations of India are the United States ($33.9B), the United Arab Emirates ($27.9B), China ($15.6B), Singapore ($10.3B) and the United Kingdom ($9.7B). The top import origins are China ($47.3B), Saudi Arabia ($33.9B), the United Arab Emirates ($24.4B), Switzerland ($23B) and Iraq ($18.3B).
Total global herbal market1 is of size 62.0 billion dollars, in this India’s contribution is only one billion dollars. The table in annexure 5 explains the position of India in the global market. European union is the biggest market with the share 45% of total herbal market. North America accounts for 11%, Japan 16%, ASEAN countries 19% and rest of European Union 4.1%. Countries like Japan and China have successfully marketed their traditional medicines abroad. Their alternative therapies are well-accepted in Europe and US. Product like Ginseng – the famed aphrodisiac from China is having the same property as of Ashwagandha- an ayurvedic medicine, yet it accounts for over US $ 800 M of international market as compared to all our herbs put together (which is less than US $ I M). When compared to the Chinese and the Japanese level of penetration in the global market India is not at all figuring anywhere. But there are positive signals also for us in the global market. India has 16 Agro-climatic zones, 10 vegetative zones, 15 biotic provinces, 426 biomes, 45000 different plant species and 15000 medicinal plants that include 7000 ayurveda, 700 in Unani medicine, 600 in Siddha medicine and 30 in modern medicine. This makes India one among 12 mega biodiverse countries of the world, which despite having only 2.5 % total land area, accounting for over 8 % of the recorded species of the world. The forecast is that the global market for herbal products is expected to be $5 Trillion by 2050. Herbal remedies would become increasingly important especially in developing countries. India, with its biodiversity has a tremendous potential and advantage in this emerging area. Acupuncture is one such therapy that has gained worldwide recognition.
Export to Indonesia
Indonesia is the largest economy in Southeast Asia with a large population, 50 percent of which is under 30, and growing at 8 percent per year. Clearly, Indonesia is growing fast and would require IT products and services, clean energy products and solutions, financial and banking services, professional training and educational products. While it is a lot easier to do business in Indonesia than in the past, there are serious challenges such as a tough regulatory environment and poor infrastructure. Indonesia is the 24th largest export economy in the world and the 72nd most complex economy according to the Economic Complexity Index (ECI).
In 2013, Indonesia exported $203B and imported $184B, resulting in a positive trade balance of $19.3B. In 2013 the GDP of Indonesia was $868B and its GDP per capita was $9.6k. The top exports of Indonesia are Coal Briquettes ($22.9B), Petroleum Gas ($17.4B), Palm Oil ($16.5B), Crude Petroleum ($11.3B) and Rubber ($7.45B), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Refined Petroleum ($27.2B), Crude Petroleum ($13.2B), Vehicle Parts ($3.38B), Petroleum Gas ($2.92B) and Computers ($2.62B). The top export destinations of Indonesia are Japan ($28.1B), China ($25.6B), the United States ($18.9B), Singapore ($18.5B) and India ($13.6B). The top import origins are China ($31.5B), Singapore ($25.9B), Japan ($17.5B), Malaysia ($12.7B) and South Korea ($11.8B).
Export to Mexico
Mexico is one of America’s most important trading partners. The US-Mexico trade is worth over $850 million a day. Mexico is a densely populated country with a lot of young people, so you can make money by selling consumer durables, packaging, plastics, housing and construction related products to Mexico. However, it is important to hire a reputable Mexican lawyer to handle the tough legal environment in the state. Mexico is the world’s 15th largest economy, according to the International Monetary Fund (IMF). World Bank analysts predict that its economy will be the world’s fifth largest by 2050.
In 2014 trade between the UK and Mexico was worth USD 32 billion. Many large UK companies operate in Mexico, including HSBC, GlaxoSmithKline, AstraZeneca, BAT and the Intercontinental Hotel Group. British products have a significant presence in Mexico, although the UK’s market share in goods imports into Mexico has decreased overall in recent years. However, latest data shows UK exports in services have been gaining importance, with an increase of 30.2% in 2013. Between 2013 and 2014, UK exports of goods and services to Mexico increased to £1.1 billion.
Export to Morocco
Morocco is one of the fastest developing North African countries with GDP growth rate of 5% and with close proximity to Europe. Morocco is often the hub of European companies operating in Africa. You can make money by selling clean energy products, water treatment solutions, building and construction products and safety and security equipment. Morocco is the 71st largest export economy in the world and the 88th most complex economy according to the Economic Complexity Index (ECI).
In 2013, Morocco exported $26.9B and imported $44.4B, resulting in a negative trade balance of $17.5B. In 2013 the GDP of Morocco was $103B and its GDP per capita was $7.2k. The top exports of Morocco are Insulated Wire ($2.73B), Cars ($1.75B), Mixed Mineral or Chemical Fertilizers ($1.6B), Refined Petroleum ($1.51B) and Phosphoric Acid ($1.5B), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Refined Petroleum ($4.07B), Crude Petroleum ($3.8B), Petroleum Gas ($2.13B), Cars ($1.52B) and Wheat ($960M). The top export destinations of Morocco are Spain ($4.79B), France ($4.72B), Brazil ($1.53B), Belgium-Luxembourg ($1.15B) and Italy ($1.15B). The top import origins are Spain ($6.16B), France ($5.64B), the United States ($3.35B), China ($3.26B) and Saudi Arabia ($2.62B).
Export to Nigeria
Nigeria is the most populous country in Africa. Most Nigerians are below the age of 25 and there is a strong desire for change and economic development in the country. Over 40 percent of the exports to Africa are consumed by Nigeria’s vast population. It boasts an impressive GDP growth rate of 5% and more. You can make a lot of money by selling health-care services and equipment, financial services, industrial automation, automotive parts, machinery and marine vessels in Nigeria. However, the challenges are massive as the crime rate is high in Nigeria; there is a strong possibility of fraud if you are not careful enough. The transportation infrastructure is very underdeveloped, and bureaucratic corruption is high. Nigeria is the 41st largest export economy in the world and the 119th most complex economy according to the Economic Complexity Index (ECI).
In 2013, Nigeria exported $94.8B and imported $53.3B, resulting in a positive trade balance of $41.6B. In 2013 the GDP of Nigeria was $521B and its GDP per capita was $5.6k. The top exports of Nigeria are Crude Petroleum ($75.3B), Petroleum Gas ($10.3B), Refined Petroleum ($3.07B), Cocoa Beans ($561M) and Special Purpose Ships ($463M), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Refined Petroleum ($9.5B), Cars ($1.87B), Wheat ($1.42B), Rolled Tobacco ($1.34B) and Special Purpose Ships ($1.01B). The top export destinations of Nigeria are India ($12.4B), the United States ($10.9B), Brazil ($9.7B), Spain ($7B) and the Netherlands ($5.12B). The top import origins are China ($11.6B), the United States ($5.89B), the Netherlands ($3.59B), Belgium-Luxembourg ($3.08B) and India ($2.69B).
Emerging Countries and Winning the Import/Export Game – Here’s What You Should Do
You can make a lot of money from the import/export business provided you get a few things absolutely right. This includes identifying the right product, and establishing business partnerships with the right suppliers and distributors. You need to seek business partners in overseas countries and the easiest way to do that is on Liverix.com - do have a look at the profiles of prospective business partners on our site, perhaps you will find some you can connect to.
The greatest thing about an import/export business is that it hardly costs anything to setup. It requires minimal investment and operating costs are really quite minimal. But to succeed, you will require a special set of skills that only few people have.
There are qualities you need to succeed as an importer/exporter. You need to be a born salesperson; you should be able to build strong rapport with your clients. It would also help if you have a talent for languages. You should be knowledgeable about the law and be good at handling complex paperwork. And yes, you should be decisive, and get most of your decisions right – a single wrong decision could potentially cause you major losses in this business. Know what sort of import/export business you want to get into.
Next, select the type of import/export business you want to get into. You can be an import/export merchant, which means buying goods with your own capital and selling them abroad. In this model, you carry all the risk and get most of the benefits. If the product doesn’t do well, you may carry huge losses. You can work as an export management firm, wherein you team up with domestic manufacturers and do all the work needed to export their goods abroad. Another option is to start an export trading company, where you will look to find domestic buyers for imported goods. Most import/export businesses combine all three functionalities seamlessly.
Know your specialty. As an exporter/importer, you should zero in on your specialty. Do you speak Arabic? Then you would be better off involving the Middle East in your export/import plans. Or do you speak Hindi? Perhaps you should look for export/import opportunities in India. Are you great at technology? Maybe exporting/importing electronics and gadgets is your calling. In this way, you should know your specialty and stick to it.
Get the necessary licenses and permits. You can’t do much as an exporter/importer without having the necessary licenses and permits. For this you should be in touch with the customs department of your country and ensure that you have got every legal aspect of the business transaction in order. You will need to have the patience to sit through tons of paperwork for this.
Start networking, find business partners. To be a success at the import/export game, you need to be able to network expertly. You should be able to find business partners and follow through on an initial contact with emails and phone conversations. You should be able to connect with people even though you may not be able to communicate with them in their language. This requires a special skill. You should come across as a friendly person and someone who can be trusted and relied upon, because the export/import business operates solely on trust.
Start making money. That’s it. It’s time to get started and to make money right away. Don’t waste anymore time studying the business, get started and learn on the job. In fact, the only way to master the import/export business is to learn on the job.