An Exporters Role
Exporters are the ones who deal in the delivery of products from one place to another which can be from a city to city, state to state and even from country to another country. The products are exported with the motive of generating a profit off it by selling to buyers who require these for a particular purpose. Not to mention that exports to the international market definitely boost the economy of the home country by bringing in cash flow from foreign businesses.
Though exporting and exports business is not easy as people think, but with some proper strategies and planning, this business has a huge potential as a source of wealth.
Exports businesses are definitely not an easy route to take as these are filled with hurdles along the way. A business may often find itself with the lack of buyers or customers for their products.
This can be due to several reasons such as not able to target the right audience, not able to market the product, not offering an attraction or unique aspect of the product or commodities and many more.
Some Major Challenges Faced by Exporters in Developing Countries
At present, several Indian exporters face a number of problems/difficulties across industries which demotivates the other business firms in the industry to enter into foreign markets. These challenges along with their solutions are as follows:-
1. Ongoing Recession
The demand for certain Indian and homegrown items like gems & jewelry, textiles, and traditional clothing was hit pretty badly during the recession period which emerged in the last quarter of 2020. Thanks to the coronavirus pandemic, exporters were forced to quote lower prices of their products which resulted in lesser profits and even losses to some extent.
2. Low-Level infrastructure
Less developed and developing nations of the world lack technical knowledge and the latest machinery & equipment. The outdated technology is not able to produce at the desired phase and definitely not at the phase of international producers. This also makes them quote lower prices due to lack of quality.
3. Reduction in export Incentives
Over the years, the Govt. of India has reduced export incentives such as a reduction in DBK rates, withdrawal of income tax benefits for the majority of exporters, etc. The reduction in export incentives demotivates exporters to export in the overseas markets despite having the potential to yield success.
4. Competition from Global Market
Export marketing is highly competitive. This competition relates to price, quality, production cost and sales promotion techniques used. This includes competition from domestic exporters, local producers where the goods are being exported and finally from producers of competing countries at the global level.
5. Product Standards
Sometimes, the products exported to foreign countries from developing countries like India are subject to undergo standards inspection wherein these are checked for quality and adherence to industrial standards. Due to production by low-end technology, these can be rejected. Therefore, Indian exporters lose markets, especially in developed countries.
6. Constant Fluctuations in Exchange Rate
Every country has its own currency which is different from international currencies. The dominant international currencies are the US dollar or Sterling Pound. From the point of view of Indian exporters, we are interested to realize the payment in international currency. Foreign exchange earned by the operators is converted into Indian rupees and paid to the exporters in Indian currency; this exposes the exporters to the dangers of fluctuation in foreign exchange rates.
7. Problem in Preparation of Documents
This can often pose a challenge for the agricultural producers and exporters which are mostly farmers and have barely witnessed the process of documentation that too so rigid and comprehensive as the export ones. The exporter has to deal with documentation with the necessary authorities in the domestic country as well as in the importing country. There are as many as 25 documents in total to be filled which includes 16 commercial and regulatory documents.
8. Government Restrictions & Foreign Exchange Regulations
The government restrictions on exporters can compel the exporters to follow certain rules and regulations in the form of licenses, quotas and even custom formalities. With such restrictions, some exporters are not able to freely move their goods and products from one country to another country.
9. Competition from worldwide Developed Nations
Indian Exporters are often turned down by the products from the developed nations as these are far superior then what India offers to the international market. With bleeding-edge technological production methods, these countries are able to maintain the quality and quantity to a great extent. For instance, cheap Chinese goods can often be of good quality which leaves Indian exporters not secure a place in the worldwide exports, across several industries.
10. Lack of a USP
In the B2B industry, long-term relationships among businesses is what matters. This is initiated and maintained by offering a Unique aspect to the products and services. How and when can both businesses benefit each other should be a top priority to look upon in the B2B exports industry. In a stiff competition market, USP should be on top of the list.
11. Pandemic Woes
Let’s address the elephant in room, the COVID-19 pandemic. Since its outbreak since last year in March 2020, the trade industry has been lingering on uncertainty regarding movement of goods especially from international markets. There are certain industries such as agriculture and pharmaceutical for which the pandemic has turned the fortunes as the products demand of shot up. Other than that, if you are dealing in products in neither of these industries, it can certainly be a challenge to get buyers and importers of the same.
In the recent news, essential agriculture commodities recorded a surge in exports by 18% in the period of April 2020 to February 2021. The commodities which saw a rise in exports were rice, wheat, raw sugar, refined sugar and soya meal. Once again saying, the pandemic is a boom for the Indian agriculture sector.
Some Solutions to the Challenges Faced by B2B Exporters
Every problem has some or the other solution to it and so does the challenges faced by B2B exporters in the industry.
Through proper planning and strategical methods, a business can upscale its operations and generate more sales and desired results. Apart from this, export businesses emphasize a lot on the quality of the products they export and manufacture. Some the ways by which B2B exports business can come out on top are –
1. Develop a Marketing Strategy
A marketing strategy involves taking into account all the major aspects of the branding and promotion of a brand. Reach out to people or in this case businesses in the same industry and convey about the products. Apart from this, offer a unique aspect to the products to garner more attention in the market.
2. Promotion through Website
This has been said many times, and once again I would iterate it. A website for a business is the best that could ever happen to it. It opens up to a host of opportunities such as brand promotion, providing first-hand information, direct purchases from the website itself, and making it credible among the potential customers.
3. Invest in SEO
Search Engine Optimisation (SEO) is the real deal to gain massive organic traffic to a website. You can provide useful information on the SERPs in order to get a high Click Through Rate (CTR) which can eventually lead to gaining customers. SEO is the number one strategy to be visible to the audience searching for the products or services you offer.
4. Engage with other Businesses
Being present in the B2B domain, it’s crucial to engage with others in order to get references and requirements sometime in the future. The decision-making here is a lengthy process.
5. Offer a Unique aspect
In the highly competitive and rigid market, to separate you brand from others is to offer something unique to the market. For instance, in a pulses exports business, providing additional services can be a unique aspect of it.
6. B2B Platforms
A B2B Platform is a one-stop hub for solutions to all the problems/challenges businesses face in their operations. These platforms such as Global Trade Bazaar, aid export businesses in expanding their growth by providing all of the above services and activities. By registering with B2B platforms, one can grow a strong ground in the market. That is possible by getting leads on a constant basis and pitching those accordingly to convert to potential customers. A B2B export business would be able to get a global reach where even foreign businesses can be targeted to deal transactions with.
Also, since agriculture sector is in boom during the pandemic, B2B platforms make it easier for any trader or exporter to find the right buyers according to their requirements. The major deals happening in B2B platforms is regarding agriculture commodities only and you’ll not find this many buyers other then the import-export platforms.
7. Case Studies
This simply means, improve on your strengths and convert the weaknesses into opportunities. Case studies are a great way to analyze where the business didn’t hit the mark and how to improve on it in the future. Client testimonials are one of the ways to start from in order to analyze the export business operations. An in-depth research will let you know where exactly the problems are and finding ways to improve so that, it doesn’t hinder in the future.
What’s in the Future for B2B Exporters
As mentioned above, the market has been emphasised very much on the internet and everything revolves around that. The paradigm shift can be a door to host opportunities be it any business sector. With the recent movement, “Atmanirbhar Bharat” which means to be ‘self-reliant’ is an initiative by the government which urges the development, production, marketing and selling all within India itself can be a boost for the economy and most importantly the local businesses.
To boost this movement, the government will provide subsidies on certain industries as to minimize the production cost and eventually make the prices of the end product less costly for the end customer. Apart from local production and consumption, it does shed a light on exports too wherein which exports from India would be maximized than ever before.
In the latest news, India has recorded a massive surge in exports from industries such as engineering, gems, jewelry and the evergreen product – rice. These numbers are only going to rise despite the world still recovering from the pandemic crises. To get ahead of the curve, businesses should look into investing in the digitization of the organization and modern means of marketing to generate inbound sales.
A local manufacturer and exporter can certainly take advantage of this and foster the B2B business to great heights. Hopefully, the challenges faced currently by exporting businesses can be solved by the initiatives and patriotic movements. At the end of the day, customers are the one which will make the decision to buy or not.