Whether you’re new to exporting or have been in the business for decades, there are serious advantages to researching prospective markets. The international trade landscape is constantly changing, and countries we currently deem dependable partners can quickly become burdened by conflict, natural disaster, or economic pitfalls, indirectly affecting our own export success.
This is why exploring market compatibility and casting a wide net is so important. If one market takes a major hit—for instance, those still catching up after the pandemic—you want to be ready to switch gears and push for advancement elsewhere.
There are several factors involved in discovering market compatibility for your product or service. Here’s what you will want to know about global markets before initiating the export process:
Export Market Potential
It’s best to estimate the value of something before throwing it on stage to perform. Finding the export market potential of your product involves “multiplying the number of buyers in the market by the quantity purchased by the average buyer, by the price of one unit of the product”.1 By doing this, you’re getting pure, quantitative data that allows you to rank different markets by revenue success. You’re also finding plenty of crucial demographic information that can come in handy when the time comes to begin selling.
Country Economic Performance
It’s vital to look at a country’s GDP, GDP per capita, inflation, and median income as well.1 These numbers tell us what sort of opportunities there are for business expansion and how the population is most likely to spend their income. How it all matches up to the economic states of other markets may be an eliminating factor.
Demand and Market Size
The information that can most accurately tell you how your product will perform in a certain market is how similar products perform—especially if your product isn’t B2B targeted. For example, if you’re looking to export farm equipment, you’ll want to see how other farm equipment manufacturers are faring. Then, you’ll want to factor in how you will do as a competitor. Which leads to our fourth research point…
Competition
Strong competition is a good thing, but too much of it may leave no extra room for your business. After determining whether or not there’s a high, consistent level of demand for your product in a certain country, find out what can set you apart from the other manufacturers.2 If you can’t determine whether or not there is a unique angle to your product that the others lack, you may want to look to export elsewhere.
Local Regulations and Requirements
Not every market follows the same rules, meaning what works domestically could cause some serious delays overseas. You should know all the potential legal hurdles and regulatory practices before dealing with a new country.2
There’s a storm of possibilities to consider before you try your luck in a new market, but you’ll be grateful you did your research when you avoid the risks associated with trying to sell in the wrong place. As though exporting isn’t hard enough, lack of knowledge in the markets you enter can complicate the process tenfold.
Market compatibility research ensures you don’t crumble the minute you go abroad or expand your exports. With global business experts on our team, the NDTO can ensure the same thing! If you’re ever in doubt, give us a call.
1How to evaluate international market potential? (kompass.com)
2Maven: Going Global: 5 Things to Consider When Bringing a Product to a New Market