Businesses across the United States, especially small and medium-sized organizations, are looking abroad for new customers and profitable new partnerships. Increasingly, they are turning to countries in the Asia Pacific region to bring strategies to life. This post takes a closer look at trade with Asia as part of our continuing examination of key global markets.
If your company is exporting to Asia or importing from the region, or if you are considering it, you should first know that you are in good company, which is a sign of just how robust the market has been. According to a comprehensive DHL customer survey conducted in the latter part of 2016, a full one third of respondents indicated that Asia was their highest priority global market for 2017. That compares with 27 percent who will prioritize Europe; 5 percent who will look to Canada; and 4 percent who will target South America.
The DHL survey uncovers another important factor that could influence the drive toward Asia: the majority of respondents, 57 percent, will target e-commerce in 2017 as their top sales strategy. Of course, the move toward e-commerce is a global phenomenon, but for those who are looking to Asia, the opportunities are vast. Consider that China is the world’s largest e-commerce market, with more than $630 billion in sales in 2015. As research from McKinsey & Company shows, 13.5 percent of all retail spending in China occurs online, a higher share than all other large economies with the exception of the United Kingdom. Consider also that outside of China, in Southeast Asia (Vietnam, the Philippines, Indonesia, Thailand, Malaysia, Singapore) an e-commerce boom is just beginning. A Bain & Company report notes that, in a region with a population of more than 620 million, only one in four consumers over the age of 16 has ever made a purchase online. And yet, digital adoption in the region is extremely high, with more than 250 million smartphone users, suggesting that the groundwork has been laid for rapid e-commerce expansion in the very near future.
In fact, in both China and Southeast Asia, mobile commerce is king. In China, a majority of digital consumers use mobile platforms, and in Southeast Asia, as the Bain report discusses, consumers are “technology leapfrogs,” having skipped the PC revolution and moved straight to smartphones. U.S. businesses of all sizes, then, must pay special attention to developing an e-commerce strategy with a strong mobile component.
Another consideration for companies looking to Asia: Not all products are created equal. Some retail business sectors are doing much better in certain countries in the region. For instance, in Southeast Asia, total online consumer activity may be low at this point relative to the number of connected individuals, but some sectors are thriving. Twenty-four percent of all clothing and footwear, and 18 percent of all travel are purchased online in the region. The bottom line is that it is critical to research online purchase trends and outlooks by sector.
In fact, understanding the specific economic and social circumstances of each country is key, and an important place to start your research is with the International Trade Administration’s Export.gov initiative. The site includes valuable market intelligence about each country in the Asia Pacific region, including China, Hong Kong, Singapore, Japan, South Korea, Thailand, Malaysia, Indonesia and the Philippines (and more).
Is your company engaged in trade in Asia? Let us know on Twitter @DHLUS.
View the complete survey results below:
1. Of all global markets, which region of the world is the top priority for your business in 2017?
2. In regard to international trade, what is your company most concerned about as we enter 2017?
3. Which technology innovations would you like to see more developed for widespread use?
Above graph, left to right: Online streamlined customs documentation requirements and procedures, none of the above, more objects/appliances connected through the internet (IOT), self-driving cars/ delivery vehicles, drone delivery, other, robotics driven by big data technologies.
4. What is the top area of focus to drive sales for your business in 2017?
5. Which international shipping sustainability measure is most important to you?