Writing this post after experimenting with exports for a couple of years now, I now understand why Indian businesses are yet to be their best and get international. These reasons are not complicated and only requires an in-depth analysis of a company and its product or service. I want you to question yourself on the coming questions and figure out your own international journey.
Q1: Is my product/ service export worthy?
While we are often clear about we are building and selling in India, it is often a scary affair to think of exports. Global demand, quality standards, cross border transportation and international Finance are some of the top thoughts that bundle our heads. We seriously start doubting our product/service and its worth.
Let us take a case where an imaginary company "KelaChips Pvt ltd.(KCP)" sells banana chips domestically and now wants to go global. This is the first thing they should do:
Goal 1: Re-position
KCP will start with an extensive analysis of the Banana chips industry covering the demand, supply, CAGR and competition, both domestic and international, gathering data from gov. databases (https://tradestat.commerce.gov.in/eidb/default.asp) & trademap based on their HS CODE (Every specific product or service will have a HS CODE).
They will then specifically focus on the statistics of top domestic competitors that export, study their market reports extenstively and their export sales data.
The next step for KCP will be to prepare a comparison sheet with metrics like product features, pricing, certifications etc with the top domestic competitors.
Based on the comparison, they should analyse what they need to add in their bundle of offer. For example, a key competitor might be having an ISO certification that is mandatory to export.
They must refer the Agro industry export promotion council (APEDA) which can help them answer many regulations related querries.
Finally, A target market has to be chosen for their product and a Go-to market strategy has to be made based on strategic positioning of the company & their competitors to ensure that they are filling an important gap in the chosen international market. Let us assume KCP identify France as their target market.
Q2: But how will I promote & market my products abroad?
While we all want to market our products abroad, we often don't know the marketing & distributing channels that are extremely important to understand before we plan our marketing. Our marketing might be appropriate for our fellow indians but will our international customers really understand and give a chance to your product/service?
Let us see what "KelaChipa Pvt Ltd.(KCP)" needs to do to market their products in France :
Goal 2: Re-brand
Before jumping in the target market of France and testing the waters, KCP will re-brand their product based on suitable analysis of their consumer preferences of French customers.
They will prepare a company profile, pricing sheet for all product types while considering international currencies and their price differences.
They should not spend too much time tinkering with the pricing & quality in the intial 3-6 months as it is very difficult to understand foreign demand before they actually start get enquiries.
Now, they need to Identify distribution channels for their product. Banana chips are sold through retailers(Indian stores & foreign stores), global e-commerce(Amazon FR) and local e-commerce(For eg. Auchan)
To get to those distribution channels, they first need to have a solid web presence that will make them look legible in the eyes of international clients & customers.
This web presence will be made by executing a digital marketing plan (Website promotion, Social Media, Blogs, SEO) that would help them get inbound leads who approach them directly.
Finally, they should go full force in following a prepared outbound marketing approach. This, in simple terms means, reaching out to the potential leads through calls, emails and trade fairs.
The duration for the complete marketing package should ideally be between 30 - 70 days before they start getting 10+ enquiries and eventually land a customer after 100 - 120 days.
Q3: OK but I don't know any procedures. Will that stop my exports?
Some of us have already reached the level of getting export enquiries and even recieved purchase orders but are still skeptical of exporting. The reason being the complicated procedures that come along with the process. It can be daunting to think of arranging every stakeholder to complete an order but with patience and proper understanding, it can be easily managed.
Let us see how KCP executed their export order from France.
Goal 3: Execute
After sending the samples of Banana chips to a supermarket in France and getting approval, KCP needs to calculate the export price and for that KCP will have to discus freight prices with the current transport companies & CHAs(Custom house agents), calculate their own cost prices, add margins and come up with a price that would help them enter a foreign market.
KCP will also need to decide on the incoterms that will decide the payment terms (advance, LC etc) and delivery terms between them and the importer.
Post this, KCP will send a pre-forma invoice or a confirmation email with the pricing for the potential quantity required by the supermarket. (Kindly note that this is not the main invoice and can not be used in the international arbitration court)
Once this price is accepted by the importer, they will send a purchase order. This purchase order will inform KCP about what product and in what quantity does the supermarket requires the product from KCP.
After recieving the purchase order, KCP will have to arrange transporation, finance, and insurance with multiple stakeholders.
Post this, they will have to execute the export order, recieve the payment(depending on the incoterm) and settle the regulations stipulated by the RBI.
Kindly note that there are many more detailed steps to be followed for executing a succesful exports and these are a summary of the entire process.
I know this will sound overwhelming if you have not done any exports. And that is why I am here to be your export consultant. Innoveo exports has a very simple mission - To be the export marketing department of every client. We are a start-up supported by IIM Ahmedabad that aspires to give indian businesses the professional edge that other MNCs and large businesses have over you.
The purpose of this post was to help you start thinking in the direction of exports. Once your curiosity is aroused, we will sit together, plan your entire exports journey and give our 100% collectively to ensure your global journey begins. And do not worry about our pricing, we have a very clear pricing model. Check it out here.
Reach out to me on +91-9840397958 or Email at vaibhavsharma@innoveoexports.com
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