Latin America represents new opportunity for Canadian exporters, says UPS survey
For the automotive sector, Colombia, Costa Rica and Peru have the highest percentage of importers looking for new suppliers and the most marked tendency toward digital integration
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MISSISSAUGA, Ont.—Up to 47 per cent of Latin American importers are looking for new international suppliers, which suggests an opportunity for Canadian exporters to find new buyers, according to the 2017 UPS Business Monitor Export Index Latin America (BMEI) report.
The study focuses on the purchasing behaviors of small and medium enterprises (SMEs), a segment representing more than 90 per cent of companies in Latin America. It reveals insights about importers that will help exporters sell and supply products to this growing sector.
The nine countries included in the survey include: Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Mexico, Panama, Peru and the United States.
The study found Brazilian importers are the most proactive in seeking new suppliers, with only five per cent indicating they do not contact new suppliers but rather wait to be contacted. Importers in the U.S. were the least proactive, with 31 per cent indicating they do not contact potential suppliers.
In the industrial manufacturing sector, 45 per cent of companies surveyed indicated that they import raw materials and basic inputs for production. Some 56 per cent of industrial manufacturing importers looking for new suppliers use internet search engines to contact them, and 34 per cent said potential suppliers contact them directly via email. UPA says this means online communications are a viable channel for exporters to reach out to new potential customers.
For the automotive sector, Colombia, Costa Rica and Peru have the highest percentage of importers looking for new suppliers and the most marked tendency toward digital behaviour.
“The BMEI study provides importers and exporters with a deeper understanding of the purchasing dynamics of SMEs in Latin America,” said Jose Acosta, president of Public Affairs, UPS Americas Region. “The SME sector in the Americas is playing a significant role in the region’s economic growth and global trade.”
The 2017 BMEI, a UPS study conducted in conjunction with the RGX Global Export Network, surveyed 2,170 importers from the industrial manufacturing, automotive, apparel and high-tech industries regarding the factors that influence their purchasing behavior about the products they buy.
The study highlights the importance that importers place on the quality of the products they buy, which is as critical as price, but the automotive industry in particular places great value on other key considerations.
“The importance of logistics and shipping solutions provided by the vendor, as well as flexible payment terms, are two elements that must be considered by exporters to address these markets,” said Craig Rayner, vice-president of automotive, UPS Canada. “Canadian exporters in this sector would be well served to initiate trade activities in markets with existing trade agreements in place and, where possible, a local industry that is open to international competition.”
More study insights
• Industry fairs and trade shows were cited as the most frequently used channel for finding new suppliers at 28 per cent, followed by trade missions at 21 per cent.
• 21 per cent of respondents indicated they expect potential suppliers to contact them, which reflects an opportunity for proactive Canadian exporters to present focused and well-researched business proposals via email or telephone.
• Importers indicated the top two attributes influencing their purchasing decision were quality (97 per cent) and price (87 per cent) followed by seller services, such as, flexibility in payment terms and after-sales services.
• The high-tech sector has the highest level of online purchasing activity in the buying process. 50 per cent of respondents reported completing purchases completely online.
• In the apparel segment, exporters looking for new markets to develop should consider the U.S., Costa Rica and Chile. These countries had the highest percentage of respondents looking for new suppliers.