Archive for the ‘Export Assistance’ Category

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The Great Mall of China

November 30, 2015

This is a guest blog by Doug Barry PhD, who until recently was a Senior International Trade Specialist with ITA’s Office of Communications and Digital Initiatives  

Despite slowing growth and a welter of government regulations, there are still good opportunities to be had in the China market, says the 2015 edition of the China Country Commercial Guide (CCG). Published by the U.S. Commercial Service in China, the CCG, now available online in bite-size nuggets, points out that while many industries remain closed to foreign participants, you’re on much more enticing ground if you’re selling medical equipment, health supplements, baby and environmental products and services, and using e-commerce to avoid most taxes and certifications to reach Chinese consumers directly.

E-commerce is rapidly increasing in China, and in May 2015 accounted for around 10.6% of all retail sales. There are over 632 million Internet users in China, of whom 47% are online shoppers. That’s slightly less than the entire population of the United States.

“The Chinese market remains strong, the retail sector underdeveloped, and logistics surprisingly improved,” says Joshua Halpern, a Commercial Officer with the U.S. Embassy in Beijing. “That combination, along with an expanding middle class, government policies that drive domestic consumption, especially in the 2nd and 3rd-tier cities and a degradation of trust for domestic-made products presents U.S. exporters with unprecedented opportunities across a comparatively streamlined and low-cost export channel.”
E-commerce sales in China totaled $449 billion in 2014, up 49.3% from $300.7 billion in 2013, according to the Chinese government’s National Bureau of Statistics (CNBS). In comparison, web sales in the U.S. totaled almost $305 billion in 2014, up 15.4% from 2013, according to Department of Commerce estimates (February 2015). China’s  e-commerce market is growing more than three times faster than that of the United States. Although the official average income of the Chinese online shopper is much less than their American counterparts, personal income of the Chinese middle class grew by 10% (CNBS). The Chinese research firm iResearch forecasts that China’s e-Commerce market will grow at a 27% annual rate over the next four years.

Feet on the ground, or mail it in

U.S. Companies wanting to sell products via Chinese e-commerce platforms, including Alibaba and its affiliates Tao Bao, Tmall and Tmall International, can choose a more traditional approach by establishing a physical presence in China, or use cross-border e-commerce to sell the products directly from abroad. A presence in China can be a subsidiary company, a JV, a wholly-owned entity or a local distributor/agent. The CCG contains information on these different options for establishing a presence in China and the Department of Commerce offices across China can help you identify the right option for your business.

Within the massive growth of e-commerce in China is an approach called “bonded online shopping,” the cross border element of online shopping via government-approved websites that enables foreign brands to sell products overseas. In cross-border e-commerce, goods imported by means of bonded import will be exempt from certain import duties, consumption tax and value-added tax, and are only levied with Personal Postal Articles Tax. Cross-border e-Commerce is in a trial stage, and is likely to experience significant changes as regulations are put in place.

Also, since potential Chinese distributors comb through popular e-commerce marketplaces in search of new products, your product’s presence could lead to orders for containers, rather than oneseys and twoseys (small quantities), which still could be considerable given China’s population of 1.3 billion.

The latest CCG also contains information on the U.S. Government’s export assistance resources in China, which are most significant in the world. Good thing, too, because being successful at e-commerce in China often requires more than a passive listing or virtual store on one or more marketplaces.

Another trend to keep an eye out for is what Commercial Officer Joshua Halpern calls “C-commerce”, which is the shift in consumer behavior away from static one-directional e-commerce platform shopping toward content-rich sites and social media groups that discuss and recommend products and lifestyle activities they are passionate about. C-commerce allows Chinese consumers to trust recommendations from passionate friends in their “inner circle”. U.S. Commercial Services offices in China can advise you on developing a proper e-commerce strategy, including local service providers who can help market your product on China social media.

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How to Find Sector Opportunities in Korea

November 16, 2015

Jim Bledsoe is an International Trade Specialist with the U.S. Commercial Service in Little Rock, Arkansas

A business client named Max recently contacted me to ask some general exporting questions pertaining to a few specific markets. It soon occurred to me that a lot of what he was asking about was readily available in our agency’s Country Commercial Guides (CCG), which are posted online for free here. I asked Max if he had ever used a CCG or even heard of them, which led to the following conversation.

Max:  What is a CCG, and why do I, as a U.S. business, care?

Jim:  A CCG is a guide prepared by boots-on-the ground trade and economic professionals at U.S. Embassies and Consulates abroad that highlights specific country market conditions. While similar to the CIA World Fact book in concept, the nature of the CCGs is geared more towards giving you market insights so you can sell your product or service in that country.

Max:  I see. A lot of what I’ve found out there on the Internet hasn’t really helped me narrow down the field for potential markets to sell in. So these CCGs then are more useful—how so?

Jim:  There are currently CCGs covering 123 markets. These Guides have the latest on high-demand industry sectors, as well as market-by-market economic overviews, selling techniques, investment climate considerations, trade financing options, and business travel advice and resources. U.S. companies can also find opportunities not only in popular markets, but also in many other less crowded markets. In our earlier conversation, you had asked about the Korea market, so let’s take a closer look. We have a great group of trade professionals that I work with who write about specific areas like Agriculture, or the Defense Industry. Basically, you are getting current market conditions from people—U.S.  Federal Employees—who live and work in the respective markets of the CCG they write.

Max:  How do I use this CCG to get my Defense Industry in Korea-related market information?

Jim:  The easiest and most efficient way to capitalize on the valuable market information contained within the CCGs is to contact your local U.S. Export Assistance Center (USEAC). So right here by calling me, you are already doing it the easy way! But seriously, anyone can contact their local USEAC where an International Trade Specialist can help identify and winnow down potential markets, work with you to develop an export strategy, and help explore  options for business to business matchmaking

Max:  What if I just wanted to do some looking myself?  I would hate to bother you with this….

Jim: It is no bother at all—this is what I do and am happy to help!  However, if you wish to do further research into the markets yourself, it is easy. Here’s what I recommend:

  • First go to the CCG landing page and select which country you want find out more about. They are split up by region: Asia, Europe, Middle East & Africa, and Western Hemisphere.
  • Once you have clicked on a country, you will notice there are eight sections listed with topics you can click on in each of the following:
    • Doing Business in [Country]
    • Political and Economic Environment
    • Selling U.S. Products and Services
    • Leading Sectors for U.S. Exports and Investment
    • Trade Regulations, Customs, and Standards
    • Investment Climate Statement
    • Trade and Project Financing
    • Business Travel

Max:  What if I just want to find out about the Defense Industry in South Korea?  What all would I click on?

Jim:  Well, that depends. First click on the Korea link under the Asia region, then next under the “Leading Sectors for U.S. Exports and Investment” section. I would recommend clicking on the Defense Industry Equipment link. Under this link, you will get a comprehensive view of the Defense Industry market segment in South Korea, including best prospects and opportunities in the market. This section also includes major trade shows and key acquisition contacts for the Defense Industry in Korea. However, I wouldn’t recommend stopping at that link alone, especially for the Defense Industry. I would recommend looking at the “Doing Business in Korea” section, and reading through the overview sections where there is valuable information on how strong a trade partner Korea is with the United States. Then look at Market Opportunity and Challenges insights, as well as where you can find a general Market Entry Strategy specific to Korea.

Seeing as how the “Doing Business in Korea” Market Entry Strategy link explicitly recommends “a local presence is essential for success,” I would highly recommend that you look at the “Selling U.S. Products and Services” section. This explains the various aspects of actually selling in Korea, such as the Using an Agent to Sell US Products and Services or Establishing an Office , where you will find  how to establish the local presence recommended by our Commercial Specialists at the U.S. Embassy in Korea.

Max:  That sounds helpful, is that all I should look at then?

Jim:  Your company has had good success in selling quality U.S. goods to the Defense Industry worldwide. In pursuing opportunities in Korea, you should check out the “Trade Regulations, Customs, and Standards” section for Korea, where topics such as Import Requirements and Documentation and U.S. Export Controls, among others, are covered for the South Korean market.

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Market Research that Challenges Your Assumptions

November 10, 2015

This is a guest blog by Doug Barry PhD, who until recently was a Senior International Trade Specialist with ITA’s Office of Communications and Digital Initiatives  

This post contains external links. Please review our external linking policy.

You are in the renewable energy business in the United States, and receive a notice about an upcoming conference on the topic to be held in Brazil. You’re interested, and start thinking about next steps. However, after talking with some colleagues at the office, you are quickly reminded that Brazil is in an economic slump, its politics more volatile than usual. “Slump” and “volatile” are not samba to your ears, and you decide that this isn’t the year to expand to Brazil.

CCGs

Country Commercial Guides showcase market research intelligence for 120+ countries. 

You’ve made a mistake. There’s significant opportunity in the renewable energy market.

What should you have done to get an accurate understanding of the market, even if you decide not to go to a trade show for the industry?  Well, you should have consulted a resource that for many years has been providing reliable, in-depth market research for U.S. companies of all sizes. The publication is called the Country Commercial Guide (CCG) and there are Guides covering some 123 markets. Formerly comprised of large, door stop proportions, the CCGs from 2015 are divided into bite size bits and accessible online via export.gov/ccg/. In case we fail to mention it later, access is FREE. It’s never a good idea to select market opportunities based on faulty assumptions and hearsay.  With the CCG’s, you can get accurate, bankable information with an investment of a few minutes and a couple of mouse clicks. The format is mobile friendly, so you can peruse tidbits at your leisure, emailing yourself, or colleagues, to select pages for closer scrutiny later. Your boss may appreciate receiving this information for its brevity and insightfulness.

Size doesn’t matter

One of the first and most important things you notice is that despite a bumpy economy, caused in part by China’s falling demand for natural resources, Brazil is eager to build up its alternative energy capabilities. A drought in part of the country means that dependence on hydro power must be balanced with more solar and wind power. Businesses in the U.S. specializing in renewable energy should take note: Brazil isn’t your only best bet, and there’s opportunity in the most unlikely places—if you know where to look for it, like the Country Commercial Guide’s best prospect report on Renewable Energy.

A good place to look for buyers is trade shows, and Brazil has many, including in the energy sector. Trade shows inevitably provide a solution to one of businesses biggest challenges:  Where to find buyers—and these shows have a big collection of them under one large roof. Some of these shows will be attended by market and sector experts of the U.S. Commercial Service, based at the U.S. embassy and consulates. These folks know the buyers and will guide you to them, making sure reputations are impeccable and that they have the money and are ready to spend it. In turn the buyers may trust you more because the U.S. government is introducing you.

Here’s a sample of upcoming renewable energy shows in Brazil:

June 30-July 1, 2016, Rio de Janeiro, SP

Now that you’ve changed you mind about attending a trade show in Brazil, you wonder about temporary entry for samples or a popup table display. There’s a section in the CCG on temporary imports.

To your surprise, you learn that in this heavily taxed country, temporary imports are also taxed, but the amount is pro-rated based on the amount of time the goods are in the country. You can calculate the cost ahead of time. You learn that Brazil is examining the Carnet system, whereby participating countries agree not to tax temporary imports and a common document is used to expedite Customs processing. You make a note to check back in six months to see if Brazil has joined the Carnet system. If you make more frequent trips to Brazil, the Carnet, if adopted, will be useful.

Certain business protocols such as dress, perceptions of time, negotiation strategies, and trust are also covered in the CCG and can make the difference between making a sale and losing one. It’s not an overstatement to say that in no other publication, on or offline, can you find this mix of hard data and practical business acumen that you can apply immediately.

Oh, and did we mention that it’s FREE?

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Export Assistance Center Director Honored for Helping Utah Firms Succeed Internationally

October 7, 2015

Thomas McGinty is the International Trade Administration’s National Director for U.S. Operations.

What does the director of the Salt Lake City U.S. Export Assistance Center (USEAC) have in common with a former Utah governor and a former director general of the U.S. Commercial Service? They are all recipients of the annual Utah International Person of the Year Award.

Dave Fiscus accepts award

Director of the Salt Lake City U.S. Export Assistance Center, Dave Fiscus (2nd from right) accepts the Utah Person of the Year Award

I was thrilled to learn that Dave Fiscus, director of our Salt Lake City USEAC, recently received the 2015 Person of the Year Award for going beyond the call of duty to promote trade and help Utah companies succeed in international markets. The award was presented to Dave by KeyBank and the World Trade Association of Utah. This is a tremendous honor and professional achievement for him and the entire Commercial Service family. We challenge our employees to ‘Dare to Be Great’ in creating opportunities for U.S. businesses and promoting exports. I congratulate him for his outstanding work in Utah.

Terry Grant, president of KeyBank in Utah and member of the nominating committee, commended Dave for his deep engagement in the Utah business community, particularly his outreach to rural companies and the support he provides to state and World Trade Association events. This year, the governor led five trade missions and Dave played a major role in planning and executing each of them. Mr. Grant attended several of the missions and noted that the Gold Key meetings organized by Dave were extremely valuable in connecting Utah exporters with prospective overseas clients and partners.

Dave was also instrumental in recruiting 130 foreign buyers for the first time ever to attend this year’s Outdoor Retailer Summer Market trade show in Salt Lake City—100 more foreign buyers than the show organizer expected.

Director Fiscus in Salt Lake City and our international trade specialists in more than 100 other domestic Export Assistance Centers are helping U.S. firms succeed internationally by providing a range of services including:

  • Counseling on export mechanics and the development of an export strategy;
  • Market intelligence on best export prospects, market conditions, legal and cultural issues and more;
  • Matchmaking services to identify qualified foreign distributors and arrange meetings with these pre-screened contacts in the target market; and
  • Background reports on potential distributors, agents and partners.

To find an Export Assistance Center near you, visit Export.gov.

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Insight on Crafting an e-Commerce Strategy for Europe

September 16, 2015

Anna Flaaten is a Senior International Trade Specialists at the International Trade Administration’s Export Assistance Center in Phoenix, Arizona.

This post contains external links. Please review our external linking policy.

Earlier this week, ITA hosted a webinar to gain insight on crafting an e-commerce strategy for Europe. Participants included experts in the fields of supply chain management, payment services, search engine optimization, and direct on-line marketing.  Here are a few takeaways on the unique aspects of e-commerce in Europe:

  • The UK is the largest e-Commerce market for US goods and services.
  • The e-Commerce market in the EU is worth $472B USD – relatively split equally between goods and service exports.
  • Smaller countries import more than larger markets! For example 88% of Nordics shopped online last year.
  • Service providers in the logistic space that will know how to set up distribution in Europe.
  • Direct online marketing is easiest to start by creating a Google-friendly site
  • Using analytics and Search Engine Optimization is critical- with “search” it’s about telling you that the potential customer is already interested in your product.
  • Many countries also have their own search engines that are popular in those markets.
  • It’s helpful to translate keyword searches in languages for the markets your company wants to target – for example, if you’re targeting France, translate the keywords into French.
  • Credit cards are still the most popular payment alternative in both Europe and the US by a market share of approximately 40%; however, payment methods vary greatly between countries in the EU and offering multiple payment methods is helpful.
  • One of the most common reasons people drop out of the checkout process if they can’t find their preferred payment method- not localizing payment methods can result in the loss up to 50% of potential sales.
  • Regarding logistics, how e-Commerce works in the EU is very different than the US as parcel rates vary by country or even within a country
  • Varying shipping rates can be challenging for international pricing – use “mixed set up” meaning using one supply chain company for certain countries and a different one for other.
  • Non-EU countries like Norway and Switzerland have different customs documentation requirements.
  • Set up distribution where there’s the shortest lead time to consumers.
  • Although duties are uniform across the EU members, VAT taxes vary by country.

A special thanks to our speakers:

  • Jan Paul Olijslager, Sr. Manager Supply Chain Solutions, Holland International Distribution Council (HIDC)
  • Andreas Thim, U.S. Director, Klarna
  • Justin Seibert, President, Direct On-line Marketing
  • Commercial Specialist Heming Bjona

We will continue this discussion at our upcoming DGM e-Commerce Seminar October 8-9 in Dallas/Ft.Worth, Texas. You don’t want to miss it!

register

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Startup Global Pittsburgh: Preparing Early-Stage Exporters for the Global Marketplace

August 10, 2015

Evi Fuelle is an intern in the International Trade Administration’s Trade Promotion Coordinating Committee Office.

Shark Tank is no longer the only place where startups can go with the hope of expanding their business.

Announced in February, the Startup Global pilot program is a series of seminars held around the country that provide focused export assistance and information to early-stage companies. In collaboration with U.S. incubators and accelerators, the International Trade Administration (ITA) provides workshops—organized through local U.S. Export Assistance Centers—to address the most pressing global issues startups face.

The next installment of Startup Global will be held tomorrow in Pittsburgh, where U.S. Deputy Secretary of Commerce Bruce Andrews will deliver the keynote remarks to kick off the event. Several of Pittsburgh’s research institutions, incubator and accelerator partners, and technology associations are coming together for the August 11 event.

Attendees will hear from peer startup companies that have found success in the global marketplace, as well as specialists from ITA’s global network, including Foreign Commercial Officer Richard Stanbridge, currently based in the United Kingdom, who will provide a pan-European overview of market opportunities. Topics for the workshop include intellectual property protection; legal considerations when exporting; international e-commerce; and trade financing, including guidance on how to manage different currencies and international transactions.

ITA launched Startup Global to bring together startups and private companies from all across America that have one thing in common: they are all on the cutting edge of innovation. More than 25 startups participated in the first event in June at 1776 in Washington, D.C., and last month, 40 budding companies joined an event with the Nashville Entrepreneurship Center.

Each pilot event features panel discussions and Q&A sessions on topics including finding buyers and partners, lessons learned from local companies, intellectual property protection, and global trends.

Startup Global participants acknowledge that their perspectives change after attending pilot events. In fact, many were surprised that the U.S. government has an array of services and information available to help companies grow their business internationally.

The Startup Global program grew from the Obama administration’s broader national export strategy, the National Export Initiative (NEI)/NEXT, which aims to make the export process easier and help more U.S. companies start exporting or expand international sales. The NEI/NEXT strategy prioritized the launch of the Startup Global pilot initiative because many technology-enabled businesses are in a reactive position when international sales opportunities arise, and many are unaware of where to go for assistance and best practices.

By engaging early-stage exporters, Startup Global demonstrates the Obama administration’s commitment to ensuring American entrepreneurs have the tools they need—and know where to go for help—to prepare for global business from day one.

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Get Real: A Discussion About e-Commerce

August 5, 2015

Anna Flaaten and Martin Herbst are Senior International Trade Specialists at the International Trade Administration’s Export Assistance Center in Phoenix.

Last week, ITA hosted a webinar featuring speakers Aparna Lahiri from eBay’s Global Shipping Team and Chris Ko, Owner and Managing Partner of Nationwide Surplus. The webinar is a result of a strategic partnership between ITA and eBay. Commerce Secretary Penny Pritzker formalized the agreement to use strategic resources to support U.S. exporters last year.

e-commerce strategies

Join us Oct 8-9 in Dallas to learn about e-commerce strategies

“International e-commerce is at the heart of what we do here at eBay” and “enabling cross-border trade is key to our success” said Lahiri during the webinar. About 190,000 entrepreneurs on eBay are selling to four continents and those that are export-oriented grew a whopping 91% versus businesses that focused only on the domestic market at 58%. Here are some interesting facts we learned during the webinar:

  • Selling internationally isn’t as complicated as you think – the emergence of the internet can simplify the process. Intermediary partners including online marketplaces, secure payment collection, shipping and customs support can make life easier for the entrepreneur.
  • Mobile is here to stay– buyers are purchasing goods more from their smart phones than the traditional PC. A seamless presence across various devices is critical, especially for consumers in emerging markets.This is especially true in China and India, and eBay is seeing similar trends in Latin America where mobile usage has tripled over the past year.
  • There is tremendous demand for just about everything in the global online marketplace. Buyers online are finding inventory more affordably from US sellers and/or looking for a variety of products that are not available to them locally.

Nationwide Surplus, a company that specializes in refurbishing computers and electronics, provided the small business perspective on marketing and selling products online. The company exports 21% of their products to over 100 countries. Ko started his business in a small warehouse with a desk and a computer. He now has 47 employees and is opening a second warehouse location.

Here are some of his insights:

  • Photos, photos, photos – include detailed photos online including 360 degree angles if possible. Nationwide Surplus even disassembles their products to capture interior component images.
  • Understand the international marketplace – purchase prices overseas can exceed those of the US market if the international consumer does not have local access to certain products. AND, there may be a demand for your products internationally even if there is no US consumer demand.
  • Handling returns – understand and plan for returns as they can be expensive depending on the duties, taxes, and shipping costs, etc… involved.
  • Correct paperwork is critical – accurately identifying harmonized tariff codes, for example.
  • Export assistance – “I didn’t realize how much export assistance is out there” stated Mr. Ko, and of particular value is the assistance provided by the US Department of Commerce.

To learn more about international e-commerce, network with other entrepreneurs and US Commercial diplomats, register for our upcoming Discover Global Markets: E-Commerce Strategies event taking place in Dallas/Ft. Worth, TX on October 8-9, 2015. Early bird discount ends August 14th.

The content will resonate with any company interested in e-commerce and social media as key drivers for international business development.