Finding the best market for your export product in 2023

It doesn’t matter if you are a well-known and top brand in your own country, exporting products to a foreign market is a big challenge. The Ministry of Commerce and Industry of India has mentioned on its website that our nation has 53 concluded or in-progress agreements with countries or groups of countries for exports. This gives a more defined collection of countries for exporters to choose from to export their products. Determining a market for your export products would involve different factors such as the value of the product, its demand, market price, trade barriers, and many more. 

Here in this blog, we are discussing with you the ways through which you can find the best markets where you can export your products in 2023. 

Factors to determine the best market for exports in 2023

Product 

The choice of product for your export business is the most vital factor in deciding the export market. You must know to choose a market keeping in mind the demand for your export product. Your export product must be capable of meeting the requirements of your consumers. Before choosing an export product, you must also have a look at its history and performance in the recent few years.

Let us take an example to understand this in a better way. The USA has been our country’s biggest customer since 2017 for various Indian exports. In 2017, around 45-50% of precious metals, textiles, machinery, and pharmaceutical items were exported to the USA. So if you are planning to start an export business for such items, then the USA would be a good market choice. 

Performance of the selected market 

You might think that a particular country might have a great market for your export product and it would bring you a lot of profits. But before finalizing a market, you need to have a closer look at it. What is the performance of that market during recent times? Has it seen any growth? You must always consider a market that has been developing exponentially, even if it is a smaller one. 

As per the traditional technique, one would always choose the first option, which is a country that explores a large market but you must consider the second one. It is because market performance is better in the latter and it would lead to earning more profits in the future. Making the right choice of the first market would eventually lead to a better selection of the second one. Moreover, you should also always make sure to keep a check on future market performances while considering the market options for your export product. 

Competition in the market 

When you start an export business, you will come across competitors selling the same products in the market, or emerging suppliers who are likely to develop the export products on their own. When there would be too much increase in the competition, you are likely to face an effect on the share of your market and a reduction in sales & profits. Moreover, you may also end up losing the first-mover advantage. Therefore, when you start to export a product, it is very important for you to even gain knowledge about your potential competitors’ market share and performance at the global level. 

Demand certainty of your product 

When you achieve a clear idea that there are no internal suppliers who could fulfill the demand then you could be sure that the demand for your product will keep growing in the future. Demand certainty is a very vital element for your export business as it ensures that your export products will be purchased in the future, maintaining the growth and sustainability of your business in the long run. Always remember that the right market to export to is one that offers higher margins of profits. 

Trade barriers 

Planning to start an export business? Do not forget to consider the barriers that you will have to come across to enter a specific foreign market. The accessibility of a country to international trade has been a significant issue for exporting products, especially considering the recent multinational geopolitical atmosphere of protectionism.

The various trade barriers that may arise while initiating a foreign trade business are tariffs & trade restrictions, licensing requirements, unexpected prohibitions, logistical matters, and many more. This is where the role of having bilateral and multilateral agreements come in, where governments of various nations can agree to make trade more convenient by taking up different measures such as mutual infrastructural development and regulatory relaxations.

The political and economical environment 

Before starting an export business, you must analyze the legal practices, safety and environmental regulations, commercial laws, and all the other essential things of the country where your targeted market is located. This is important for ensuring that doing business with that particular country does not cause any harm to your business interests. There are possibilities that various unexpected political scenarios, confusing ideologies, and economic stress in a country can harm your export business in the long run so you should thoroughly research all these factors when exporting products to that country. 

Relative Profitability 

It is not just the per-unit selling price that determines the profitability of a product. Even the volume of sales and the incidental expenses play a role in it. If you are planning to export your product to a particular targeted market, then you must evaluate the price that consumers are willing to pay and the demand for the product in that area. 

By doing this you will get a clear picture of how much product you must send to a particular market and at what price. Also, analyze your likely earnings from the market. Other factors that might slightly affect your profitability are distance, time, and effort required for logistics, travel costs, tariffs, etc. 

Incentives

The country where you are planning to export your product may even have incentives to welcome the inflow of some distinct items to cover up the domestic scarcity. Our Indian government also offers promotional schemes on specific products & services through the Merchandise Exports from India Scheme with the motive to gain incentives from key exports to certain markets. This can be a big benefit for export businesses if they know how to use it correctly. 

Some pro tips and warnings that you must keep in mind while finding the best export market in 2023 

Pro Tips 

• The best way to finalize any market for exporting products is by conducting thorough research and collecting accurate information. You must try gathering information as much as possible from various trusted sources. 
• Consider multiple market options and compare all the parameters of these markets before coming to any conclusion. 
• Another important thing that you must keep in mind is to finalize logistics very carefully before selecting any market for export. 
• Connect with a good consultancy and learn about various export schemes such as the EPCG Scheme to enjoy export benefits. 

Warnings 

• As a beginner, you must always identify and evaluate all the local costs before finalizing any market for your product. It is important to do so because they will be expenditures that are going to be incurred irrespective of where you ship your products. 
• During the initial stage of your business, you cannot manage to ship to a large number of countries, no matter how tempted they are. It is always the best idea to start small with a couple of targeted markets, and then work hard to increase your geographical expansion from there.

Conclusion 

Being an exporter, you will have 195 countries in the world for you to choose as buyers. But dealing with each of them would be completely different ways. It is easier to export products to certain countries with whom your country’s government has signed a multilateral or bilateral trade agreement. These agreements reduce the trade barriers that exist between the countries.