In this special report we analyze the ways to access foreign markets. Various entities and companies detail the work philosophy for a successful export and describe the keys so that the task undertaken is not frustrated.

According to a report by the Fundación Pro Tejer, during 2006 exports of textile products registered a rise of 1,2% regarding the year 2005, reaching a value of 490 millions of dollars. The 38% of exports went to MERCOSUR countries, mainly Brazil – 142 million dollars – mainly in the items “cotton fabrics for towels”, “woven plies for tires” e “polyester yarn”. Then came the European countries (25%), with Germany and Italy in the lead for shipments of “worsted wool tops” and “dirty wool”. During 2006, the highest percentage of exported products corresponds to raw materials, followed by garments and yarn, and to a lesser extent tissue, knitted fabrics and garments.

And about clothing , the Argentine Industrial Chamber of Clothing (CIAI), based on data from the National Institute of Statistics and Censuses (INDEC) and the General Directorate of Administration )DGA), reports that clothing exports grew exponentially: on 2001 the dollar figure was US$ 31.797.759, while during 2006 reached US$ 79.600.744.- The most important destinations were Chile, Uruguay, Spain and Brazil and to a lesser extent Mexico, Paraguay, United States, Venezuela, Peru, Colombia, Ecuador, Bolivia, Italy, Japan and France. The main products sold: t-shirts, cotton undershirts, cotton pants, cotton shirts, sweaters, panties, bras, baby clothing, among others.

This x-ray of what is can be superimposed on what could be. Many entrepreneurs express their desire to export, but for different factors they see entrepreneurship complicated. According to a survey by the Fundación Pro Tejer, The main reason why Argentine companies do not export is the lack of information about business opportunities and the lack of knowledge about the export activity. In a second instance, the reasons are low international prices, tax costs, the price of supplies, salary cost, bureaucratic or regulatory obstacles, lack of financing and high tariffs in potential destination markets. Let's see what paths the specialists propose to overcome some of these drawbacks.

Problems and solutions

Sandra Felsenstein, founder and director of DINKA, company dedicated to representing and marketing exclusive products of Argentine designers abroad, This raises the main problem: “Being small companies, the same people who design, handles production and marketing locally and does not have the time or energy to deal with legal issues. Exports are a delicate subject that deserves the dedication of a lot of time, effort and knowledge. That is why complications arise when small companies want to constantly market their products abroad.. Another key issue is the issue of quality and compliance, essential points when looking at the external world.”

alexander vicchi, degree in Foreign Trade from Bairexport – Network of Exporters of Buenos Aires, opinion about the elements that companies must consider in order to export : “Clothing manufacturers are not oblivious to the common problem of all manufacturing SMEs when it comes to exporting. The main obstacles have to do with internal limitations of the firm, and they are often the ones that go unnoticed by the employer. The most important is the lack of formal strategic planning. Then the lack of scale appears, management structure and capabilities, difficulties in its relationship with the different factors of production (providers, external workshops, human Resources, financing) and weaknesses in commercial management (lack of clear positioning, poor image and communication).”

When planning a path, Vicchi bets on “the possibility of developing your own and exclusive sales network , either through own points of sale (which implies a high capital requirement) , or through franchises, which is difficult both in the investor search stage and from the point of view of the support and control that must be carried out once in operation. Although it is not easy and it takes a long time, this path seems ideal for exporting SMEs, who cannot even think of installing brands through massive advertising abroad, not only for not having the necessary funds, but because the scale of production and the marketing structure will never allow them to satisfy a demand at the levels necessary to amortize the investment”.

From Bairexport they also understand that “to generate an export policy in the medium term, companies should consider planning as a key to reduce or solve the restrictions posed by the other variables. Usually, entrepreneurs have some ambiguous goals and an intuitive roadmap but, by not putting it on paper, Many times they do not analyze whether what they plan to do is compatible with the scarce resources they have.. It is typical for the small businessman to travel abroad to promote his products and, when returning, the day-to-day urgencies of the local market prevent you from following up on these contacts and complying in a timely manner with the commitments assumed. Thus, the investment made with the trip is automatically transformed into a loss due to the lack of a minimum structure, to which the traveling entrepreneur can delegate the operational task of developing new business opportunities.” Therefore, For Vicchi, the first step for an SME that is thinking of exporting should be “become aware that being a successful exporter takes time (a couple of years is a reasonable time to start seeing results). after that, A prior diagnosis of the company's aptitude for export will make it possible to define a list of duties or tasks that must be carried out as a prior or simultaneous step to market development actions abroad.”

Among these preliminary tasks, it stands out “preliminary market research, what should you tell us, based on our strengths and weaknesses, in which segments and markets there are opportunities available to our SMEs. From there come the goals and objectives of our project. Then it remains to define the strategy and action plans that will be developed to achieve them.. Subsequently, we must not forget the constant monitoring of these actions to control compliance with that plan.”
The products

A question that any company that wishes to cross borders asks itself is whether or not its product will have a chance of entering the foreign market.. Para Sandra Felsenstein, Argentine products “are accepted for design and workmanship”. and explain: “They look here for typical national items or designs that stand out from the conventional.

We are no longer as cheap as before, therefore, the price is not always very competitive when adding export expenses - import in the country of destination, freight and other associated expenses. The important thing is to find the market niche for each product, and that they be places where they value what stands out to each designer, namely, that the differential value is quoted”.
For Alejandro Vicchi, the spectrum of possibilities is wide: “There are opportunities for all sectors, to the extent that there is a differentiating factor, which can be in the design and quality of the products or in the business model. Usually, the export of fashion garments and accessories shows an excellent performance in recent times, but there are also opportunities in other niches, as sports and leisure clothing”.

Regarding the modalities for accessing the markets, Vicchi claims that yes “In the country, the business model is based on sales through own stores or franchises, It is very likely that it should be operated in the same way abroad. It is increasingly common for designer clothing or clothing with a well-constructed brand identity to be exported through its own marketing networks., reaching the consumer directly. In this type of franchise, the franchisor earns primarily by supplying the merchandise to the premises, not for the canon or the value of the key (O “fee” Of income). Can be done through representatives (master franchise) who deal with managing the relationship with franchisees in their area of ​​operation. In other cases, the creator of the franchise deals directly from Argentina with the retail franchisees abroad.”

Around the product that we are going to export, Felsenstein also considers vital “the quality of the proposals. AND, on the other hand, punctuality and fulfillment in deliveries are fundamental, in addition to perseverance. The same as satisfying the buyer with orders without having problems of lack of merchandise and lack of supply of raw materials.”. As a preliminary task, the director of DINKA points out that “First of all, it is essential to test the product well locally.. And then remember that whoever matters wants to obtain an important differential, either economic or product. But something very significant is not believing that because you sell products abroad you can increase prices disproportionately.. Do not forget about all the associated expenses that increase costs in a significant way.”

Analyze the markets

How to choose the best destination for our exports? Alejandro Vicchi claims that “depends on the business model. In general, fashion SMEs go to the main consumption centers, but we must not forget that they are more competitive markets, who everyone wants to sell to, and doing business there can take a lot of time and money. It should be borne in mind that in all Latin American countries there are consumer niches with high purchasing power and they are markets where there is not so much variety of quality offers, therefore, Argentine products are in more advantageous conditions. Additionally, our country is considered in the region as a relatively advanced and more sophisticated nation, unlike what happens in developed countries. Since SMEs can produce few quantities, its scale can be optimal to meet these niches with quality and good price. And the distances and travel costs allow you to react quickly and travel as many times as necessary to meet the evolution of the business.”.

Once the target market to which to direct efforts has been decided, begins analysis of other factors. Vicchi lists the main: “import tariffs, that can leave our products out of price and technical standards, to keep in mind if the product will require any certification or adaptation to enter the market (can be a private label)”. Another fundamental issue is “analyze demand trends, consumption patterns (climate, habits) and consumer tastes, which can be seen by the garments that are currently being marketed by the competition and see issues such as concentration, nationality, property, Location, among others.

Vicchi also highlights that it is very important to know how the seasonal seasons work, when do they start and how far in advance do merchants decide to purchase new collections.
Likewise, it is necessary to inquire about the events and publications of the sector in order to be able to analyze the demand., the competition and obtain useful data for the penetration strategy.”

International fairs

The importance of attending international fairs is a topic that no one discusses anymore. This is highlighted by the ExportAr Foundation: “The concentration in the same place and in a short period of time of importers, traders, dealers, agents, representative, and more, gives the entrepreneur the possibility of maximizing the number of contacts with potential buyers with less dispersion of efforts and lower cost, a fact that is enhanced with a multiplier effect as a result of the visit of foreign businessmen who come from other countries and regions of the world to learn about new trends”. In this sense, the entity offers an alternative for entrepreneurs: “After the definition of the commercial policy of our country by the Argentine Chancellery, based on the accumulated experience and the suggestion of Argentine diplomatic representations abroad, and its intersection with the specific demand formulated by various productive sectors of our country, we elaborate the “Official Participation Calendar in International Fairs” in which those considered most relevant for the export sector of our country are selected. For it, we contract the space to the organizer of each event and we carry out an international tender for the assembly of the Argentine Pavilion, with bases in accordance with a hierarchical presence that allows showing the companies of our country in accordance with the market in which they are presented. Firms registered to exhibit pay the 60% of the total cost of participation, Fundación ExportAr absorbing the remaining cost by virtue of the Argentine trade promotion strategy that aims to conquer markets for companies in our country.”

At Bairexport, presence at international fairs is also considered fundamental: “It is not only important to offer there own products, otherwise, and before that, to explore the market in situ. Attend the main events of the sector in the region, country or city of interest will allow the entrepreneur to know the main competitors as well as the demand trends, namely, which is equivalent to carrying out a market study on the ground. SMEs are less likely to hire market research consultants, partly because it is difficult for them to identify consultancies that know the business and offer good quality services at a cost they can afford. So the trips make it possible to cover that need in a reasonably efficient way.”

visit and be visited

Trade missions are an activity that can also be very useful to promote an exportable offer. Alejandro Vicchi describes that “An example is the delegations of SMEs that travel together coordinated by an institution, to meet with potential or buyers or representatives. In some cases, missions are heading towards sector events (como a Fashion Week), other times they include Show-rooms or parades set up ad hoc to exhibit the products of the members of the delegation., and on other occasions it is simply about interviews with counterparts of interest, based on an agenda previously arranged by the Argentine embassy in that destination”. In any case, Vicchi points out that “the advantage of a trade mission lies, first, that institutional support can be jointly managed, events, technical assistance and travel cost reductions that would not be achieved on an individual basis. Additionally, when integrating a group of entrepreneurs there is the possibility of exchanging experiences, useful data and collaborate with each other to get the most out of the experience. The idea is a sectoral trade mission, but when it is not possible, joining a multisector can be equally useful.

The other side of the trip abroad is the rounds of international buyers or reverse missions. For Fundación ExportAr this alternative “It has become an attractive and economical trade promotion tool for SMEs and in particular for those that see a trip abroad or contact with importers as an obstacle.. During this year we have already organized eight rounds, of which more than 350 local businesses and 55 foreigners.”

Regarding the mechanism of contact, the entity suggests: “Since those interested in local products come to the country for a short time, and they will have one meeting after another that does not exceed 40 minutes, it is transcendental that this meeting be as productive as possible”. And to achieve it, list some requirements: ” in the foreground, we suggest working on the product so that it is in accordance with international quality standards, price, etc. Then we recommend working on who the buyer is, to increase the chances of reaching a mutually agreeable agreement during the meeting. It is important to know the situation of our products with respect to national and international competition. For this, it is necessary to make a comparative analysis of our product or service from a critical and realistic perspective., analyzing the raw material, tradition or history of the company or product, image of the country or sector, the position of the company within the national market”.

From these premises, the round of buyers “It is an excellent opportunity to start the relationship with potential buyers. to open a relationship, not to close a contract. This way, the time you have will be more fertile.”

DINKA also analyzes this mechanism as very positive. But Sandra Felsenstein points out that “It is important to select the participants very well so that certain possibilities of commercialization can materialize.. Additionally, The seller's subsequent contact is crucial so that the buyer sees the interest and perseverance in maintaining consistency in the commercial relationship”.
The most coveted destinations

Access to the most powerful markets is always an attraction for exporters, but the task will be hard. From Bairexport they analyze it in this way: “It must be borne in mind that the United States, the European Union and Japan are the most sought-after markets due to the volume of demand and purchasing power, and this leads to companies from all other countries wanting to sell to you. In consecuense, importers constantly receive offers from all corners of the planet, and they tend to be extremely demanding in the relationships they establish.” And they exemplify even more: “It is very common that when an exporter requests a meeting with a distributor located in the European Union, he wants to know some specific data in advance to decide based on that if he wants to receive the visitor or not.

Traditionally they want to be informed of estimated prices of the products already placed at the place of destination, delivery time from the issuance of the purchase order to its receipt at the buyer's warehouse and, if appropriate, if the product is already enabled for free sale or meets the technical requirements (as CE standards). depending on this answer, the communication may end at that point with a final refusal or your interest may be aroused and you may request a meeting”. Vicchi adds that “In general, buyers analyze all proposals received, they begin to negotiate and thus determine which product lines they are going to work with in the following season. If they consider that they already have enough proposals to select, or if they already completed that process, it is difficult for them to decide to give an interview to a bidder who did not arrive at the right time. This does not mean that one should be discouraged. The important thing is to have reasonable expectations, determine – according to the business model – what is the strategy and what is the profile of the indicated counterparty. Definitely, To access these markets, the effort required is proportional to the result you want to achieve.. Advance preparation and the ability to do ongoing contact follow-up over a set period of time, that can reach two years, are always key aspects that define whether the development of a market ends up bearing fruit.