Companies of all sizes could benefit from riding the e-commerce wave in China.
Fifty years ago, U.S. total trade equaled $50 billion. Today we import and export more than $4 trillion annually in goods and services.
“U.S. exports to China increased 115 percent between 2006 and 2015.”
A growing percentage of those U.S. exports are bound for China, as the number of Chinese middle-class consumers, along with their interest in U.S. products, continues to grow.
In fact, U.S. exports to China increased 115 percent between 2006 and 2015.
It’s hard to impress people any longer with China statistics, but if you’re a U.S. exporter – or considering becoming one – here are a few that you should pay attention to:
- Today China’s population of 1.4 billion includes 350 million middle-class consumers with a real desire for U.S. products and services. Think about that: China has a bigger middle class than the U.S. has people.
- China already represents one-third of total consumption in Asia. Over the next 20 years, the percentage is projected to grow to two-thirds.
- By 2030, 17 of the world’s 50 largest cities, as measured by GDP, will be in China.
So if you’re serious about competing and growing, you cannot ignore China. But when it comes to China, exporting challenges and the opportunities, like the country itself, can be significant.
Those challenges start with language and cultural differences but also include regulatory and trade barriers.
I’m well aware of the challenges and the opportunities because UPS has been in China for almost 30 years. But China and UPS have come a long way in the last three decades.
Today UPS connects more than 300 Chinese cities and the world with more than 200 weekly flights.
We have a full range of supply chain services. We built this infrastructure so we can help businesses large and small reach their customers in China – and anywhere else in the world.
“Today UPS connects more than 300 Chinese cities and the world with more than 200 weekly flights.”
From our vantage point in the conference rooms, shipping offices and distribution centers of businesses across the U.S., we see a growing interest in understanding and taking advantage of the China market.
When customers come to us with questions about China, our people encourage them to focus on two things: understanding customs and understanding culture.
To sell around the world, we believe companies must adopt a “native” philosophy and approach. In other words, they must learn and comply with the unique customs and trade requirements in each market.
They must be ready to adapt to local tastes and to give consumers in a particular market what they want, when they want it.
One way to determine what consumers in a market want is by partnering with local experts like Alibaba.
Companies also benefit by thoroughly researching the markets they want to enter to understand their future customers’ needs and preferences.
Navigating global commerce
We’ve helped make small businesses into big businesses for 110 years. Our goal is to make it easy for small businesses, tight on resources, to navigate the unfamiliar seas of global commerce.
That process starts by taking advantage of experienced UPSers around the world, as well as leveraging the extensive UPS network of facilities and transportation assets.
In just the last 24 months, we have expanded service offerings and improved transit times across 33 metropolitan areas and opened in 21 new metros, each with more than 1 million people. We also work with local partners and integrators.
Shipment visibility, or lack of it, worries many small businesses that are considering cross-border trade.
It certainly was an issue for one of our customers, Align Technology, a medical-device company headquartered in San Jose, California. Align Technology makes Invisalign, a clear polymer alternative to braces.
Align is a great example of the symbiotic nature of today’s cross-border trade. An orthodontist in China ships an impression of the patient’s teeth to Align in the United States. Align manufactures the plastic aligners and ships them back to the customer in China.
Since medical devices are not something you want to lose sight of at any point in the supply chain, we operate an integrated global network with package-level tracking detail that helps Align see where its products are every step of the way.
I once kept a map of the world in my office that showed the northern hemisphere below the southern hemisphere. As you might imagine, it was pretty interesting to watch visitors trying to find the U.S. in a world turned upside down.
The real point of that map was to remind our people it’s a big world out there, and the U.S. isn’t naturally at the center of it.
Today we see that reality more than ever in the growth of international trade.
Today we don’t need a map to show us that the world conducts business very differently than it did not so long ago. And it’s clear that global markets are going to keep changing, becoming ever more complicated and more competitive.
“Affordable, efficient trade leads to more trade, more jobs and more prosperity.”
Our business is to help our customers take advantage of the opportunities that global trade provides, especially in a rapidly growing market like China.
UPS CEO David Abney spoke on June 21 in Detroit at the Alibaba Gateway 17 conference, which attracted small business owners and managers who came to learn ways to tap into China’s growing middle-class market.
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