How to Choose the Right Export Market: Guide for Sellers

Do you want to enter the international market to boost your business? It can help you scale, earn better margins, and gain a competitive edge over your competitors. 

However, entering the global market can be daunting as every country has its government, policies, laws, languages, currency, time zones, and inflation rate. Besides, numerous other factors make it crucial for your business to assess the foreign market opportunity and potential for growth, such as certainty in demand, pricing for profitability, export safety, logistics and shipping costs, and understanding competition.  

So, if you want to make a global impression, you should know how to choose an export market and all the factors to consider before shipping your products. 

This article caters to the needs of all the existing businesses or for those who aspire to get involved in exporting their products. Let’s get started!

Brief insight into India’s export industry landscape

India continues to be one of the fastest-growing economies in the world, despite increasing inflammatory pressures and slow global growth. One significant reason for India’s emergence as a global economic powerhouse is its diverse export portfolio, which includes commodities like food, textiles, chemicals and even high-value services like IT and software development. 

The country’s total merchandise exports in FY 2022–2023 are estimated to be $447 billion—the highest ever achieved—as compared to $422 billion in the previous fiscal. The significant trading partners are the US, China, and UAE. 

The export sector is one of India’s major sources of economic development as it generates revenue and employment opportunities. According to experts, chemicals, pharmaceuticals, electronics, automotive, industrial machinery, and textiles are expected to push manufacturing exports to $1 trillion by FY28.

India’s export growth has increased dynamically through six megatrends, fast-tracked in the past two years, increasing exports in various sectors. These megatrends are: 

• Supply chain diversification
• Benefits for India across multiple manufacturing sectors
• Steps taken by the government to boost manufacturing nationwide
• Capital expenditure infusion into manufacturing sectors, Heightened merger and acquisition (M&A) activity
• Private equity/venture capital (PE/VC)-led investment in manufacturing

Factors to Consider When Selecting Export Markets

To start an export business or expand your product reach globally, you must know a few factors that can affect your business. Thus, we have created an essential, step-by-step guide on choosing an export market favourable for your business:

1.  Market insights and performance

Identifying and investing in a potential overseas market takes time. When assessing the market insights and potential for growth, it is essential to analyse both the current market size and the possibility for expansion. You can research and compare markets to see which one is easier to get into.

Studying market trends and demographics, including customer buying behaviour, preferences and pain points, competitive landscape, and economic indicators, helps identify markets with high growth potential. Additionally, you should also examine the demand for new technologies and innovations that could open up new markets and opportunities.

Therefore, gaining first-hand experience with the product you wish to export by leveraging a toolkit of research methodologies such as customer interactions, online surveys, and market reports, which serve as invaluable resources.

2. Competitor analysis

This is yet another critical aspect you should consider when choosing an export market. Researching competitors in the same market can help you gain deeper insights and provide you with a fair idea of the price plan you should be considering for similar products you plan to export. Exporters should always analyse competitors’ and overall prices for the product category in the market to survive long-term.

You should analyse your competitors’ behaviour in depth, as they are the best sources of information on the market share and trends you are targeting. Also, the more competitors there are in the market, the better the demand and potential.

Knowing about your competitors will also help you gain insights into their strengths and weaknesses, which you can use to try and offer something they aren’t offering. Comprehending the market gaps or underserved segments can also give you a competitive advantage.

Furthermore, it is essential to analyse your competitors as it helps you get information on the level of competition in the market, their dominance, and the entry barriers.  

3. Checking politics and economy

Before opting for any export market, consider looking at the new market’s political and economic aspects to ensure safe exports. You should constantly be updated about the latest rules and regulations, safety standards, and environmental laws to avert any potential losses in your business.

Economic challenges or unpredictable laws may pose a high risk to your new venture. As it is rightly said, it is better to check the road conditions before starting your journey. 

4. Legal environment

The legal environment is the foundation in which businesses operate; it is composed of laws, regulations and various other legal guidelines. Failure to comply with the rules and regulations of the destination company can lead to fines and other penalties, as well as reputational damage.

You should also be aware of any modifications in the legal environment and ensure their operations abide by the new laws and regulations.

5. Customs duties

It is a tax imposed on goods that are imported into or exported from a country. This amount is calculated as per the value of the goods, which is usually a percentage of their value. You should check the customs duty levied on the product you want to export in the specific country you are shipping your products to. This will give you an approximate idea of the final cost of your product for export.

6. Regulatory environment

All the regulatory environment and trade policies of the specific countries you want to export must be taken into consideration. Some of the major factors you need to evaluate are import regulations, certifications, intellectual property protection, and legal frameworks. Check on any potential restrictions that can impact ongoing operations in the long run.

7. Certainty in demand

Do you want to have good demand and sales for your export business? Then, you should look for places where local businesses cannot provide or keep up with customer demand.

If your product is of superior quality and easily accessible, you are more likely to get a good response. 

Start searching for the markets that need your product the most and do research on the best time to sell your products when the demand is higher, which could be summer, winter, the festive season, etc.

Check for the products that are in high demand, and to gain more insights, work with the local sellers who know the market well to make your product a perfect fit in the market. Try to become friends with local businesses and take feedback from the customers.

Keep a constant eye on your product’s performance, modify your plans if required, and change the product and its specifications as per the customer’s feedback. That’s how you can make your export business a success.

8. Efficient exports

Along with choosing the right market, it is also important to know the logistics and shipping costs in detail. It is crucial to understand how to transport goods from one place to another while not burning a hole in your pocket. You also need to ensure that the mode of transport you choose is safe and efficient and that your product is delivered on time. 

So, start exploring the different ways you can export your products. For example, by sea, air or road, and analyse the cost and time to deliver the shipment. The next important thing you need to determine is if the place where you are exporting has well-developed ports and a smooth transportation infrastructure. 

While selecting the suitable mode of transport, you should also carefully assess the efficient routes and keep in mind the specific destination costs, such as taxes, fees, tolls, etc., to ensure a seamless and cost-effective journey of your goods. Opting for this approach will help increase profit and ensure a successful export venture.

9. Know the cultural differences

Analysing cultural differences to understand people better will help make your market stronger. Know their values and beliefs as they can be used as a potential opportunity or threat and for creating better marketing strategies. It also helps in knowing the current and future trends, which is a major factor in increasing the sales of our products.

Not having correct information about the culture of the places you are exporting to can affect the success of your business. Cultural awareness helps create successful relationships with foreign partners and customers. Therefore, it can impact communication, decision-making, and customer service.

Studying cultural differences can save you a lot of awkwardness. When selling your goods in different countries, try to make the most of seasonality. For instance, what are their seasonal events and peak sales periods? Know about their national holidays, festivals or days, such as Carnival in Germany or Black Friday in the US. On these occasions, you can earn even more than during the busy Christmas season.

10. Relative profitability

Setting the right price for your product in a country is a crucial aspect that determines your profitability. The price needs to be fair and competitive. The other factors determining the profitability are the volume of sales and the incidental expenses.

Thus, when selling your products in a particular country, you should always research how much price the customers are willing to pay, how much the competitors are already charging for those products, and their demand.

When calculating the product price, always consider these things: product cost, sales volume, competitors, legal, political influence, marketing cost, brand image, and transportation cost. This will help you gauge a clear understanding of how much product you need to establish its footprints in a particular market, at what price, and thus your likely earnings from the market.

Conclusion

Exports are one of the oldest forms of economic transfer and are done on a massive scale between countries. Shipping your products overseas not only helps your business to increase its sales and profits but also provides an opportunity to capture significant global market share. 

If you are unsure whether your products will be purchased overseas or not, then elevate your product visibility and excite customers with a compelling marketing strategy such as offering discounts or coupons, conducting online or offline marketing events, collaborations with other brands, and leveraging content and email marketing. 

Executing these strategies will help your product to be launched in the market with a bang. Once you have launched the product using the right marketing skills, it’s time to take orders and ship the products. However, it has to be an efficient and reliable shipping partner when it comes to cross-border delivery. Enhance your export journey and elevate your business game by partnering with ShiprocketX.  

ShiprocketX can be your trustworthy shipping partner, having more than 4.5% of the market share in the fleet management and logistics market. The best part is they know the best shipping routes, the latest shipping regulations, and how to package and handle different types of cargo. This ensures seamless, safe, and prompt deliveries to 220+ countries and territories.