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Digital solutions challenge small-scale exports

 Digital solutions challenge small-scale exports
22 de Fevereiro de 2019   |   Technology

Investing in websites and digital strategies is one of the means for small and medium-sized companies in Latin America (LA) to increase their sales to other countries.


Despite this, only 56% of the region's businesses sell their products through the Internet, which in turn is the main channel for 73% of companies that import from Latin America. The information is from UPS's latest survey, the Business Monitor Export Index (BMEI) Latin America 2018.


The study, released yesterday, heard 2,082 exporters and importers from the United States and Latin America, including Brazil, in addition to 16 foreign trade experts.


According to UPS president Nadir Moreno, investing in digital websites and solutions is not only important for raising revenue, but also for expanding the company's productivity gains.


UPS research shows that the company's website is the primary channel (61%) used by customers to contact Latin American exporters. Second are the fairs (27%), followed by social media platforms (26%).


The BMEI 2018 also shows that 36% of businesses that invested in online advertising and SEO [Search Engine Optimization] reported increased sales. However, the use of digital tools is little used by Latin American business, especially when compared to the United States.


While only 12% of US exporters do not sell any product online in Latin America, that number is 48%.


Logistics
In assessing their main competitive advantages, excluding price and product quality, 26% of exporters cited logistics services. Among the companies that increased their online sales, that number rose to 41%. Shortly thereafter, flexible payment options (19%) and after-sales services (19%) were the most cited.


However, Moreno believes that there is still much to go forward. According to her, the small ones still find difficulties in choosing the best mode of transportation to dispatch goods and in the time to organize for the bureaucratic procedures.


She explains that companies often do not give detailed information about the merchandise in the tax notices and other documents, something that ends up delaying the process of boarding and disembarking.


"The insufficient and incomplete information of the merchandise worries a lot", emphasizes Moreno. She explains that, generally, what is missing is the description of the commodity; technical specifications; tax classification; Weight; value.


Moreno emphasizes that these data need to be well discriminated in the company website and be the same as those reported in the invoice. This is important not only for the speed of the logistics process, but also for guaranteeing the sale, since insufficient data on the site is one of the main complaints of importers in online transactions.


Means of Payment
Regarding financial flows, the UPS survey shows that US exporters are more accepting credit cards and PayPal, for example, than Latin American entrepreneurs. Even so, the levels of penetration of the digital means of payment are low even in the USA.


While in the United States, most customers (39%) pay for credit card purchases in Latin America, bank transfers are the main means of payment used (74%).


In the US, 21% use PayPal, in the past that in LA, that percentage is 5%. However, BMEI 2018 highlights that the overall impact of online buying and selling on transaction costs is minimal: 57% of exporters and 50% of importers say there is no change.


In addition, 28% of exporters and 34% of importers reported an increase in transaction costs, highlighting the fact that the use of the digital environment is not necessarily cheaper.


 

Source: DCI – DIÁRIO COMÉRCIO INDÚSTRIA E SERVIÇOS


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