How to research a market

This guide is designed for both new exporters and those already exporting. Whether you're planning to enter your first market, or your fifth, good research is a critical step in your preparation for export success.

Of course the best way to 'get a feel' for a market is to actually go there. Meeting potential customers and partners, and checking out local competitors will provide invaluable market intelligence.

However, this should not be the first step in your process: you'll need to do plenty of research before you visit, to find out whether the market you're looking at will reward you for the significant investment required.

Where to start

A good first step in assessing the viability of an export market is to find out how much trade New Zealand already does with the country. Check short term and long term trends. Are spikes in demand due to seasonal factors or has there been a consistent rise in demand?

Start with the Statistics New Zealand website. It offers detailed New Zealand export data. It's also worth looking at the trade other countries do with your target market. For example, if you are looking at exporting to Taiwan, have a look at trade that Australia does with Taiwan.

Demographics

Demographics can also provide valuable information about potential customers and their spending patterns. Statistics such as the population make-up, per capita income and spending patterns can be important indicators of the market potential for your product or service.

Good sources of demographic information are the websites of national statistics agencies, where you can generally access population estimates and projections by state, ethnicity, age etc. A list of national and international statistical agencies is maintained by Statistics New Zealand.

Public information vs paid market research

Sites like Statistics New Zealand, Austrade, the WTO, United Nations and the OECD are just a few examples of the many free public information sites offering valuable trade data.

Commercial resources can be even more useful, but usually involve costs such as subscription and association fees. However, you'll end up spending far less than you would if you hired a research team to collect the data first-hand. Using commercial information makes sense when you are seeking detailed analysis, such as 'key demographics', 'market buoyancy', 'purchase frequency' and so on.

Another good source of market information is from the education sector. Higher learning institutions are frequently overlooked as viable information sources, yet there is more research conducted in universities and polytechnics than virtually any sector of the business community.

Digging deeper

Learn from people in your target market

Contact people who are already exporting to your target country. This may sound obvious, but would-be exporters often fail to talk to those already in-market. You may be surprised to know that many successful exporters are happy to give advice to those starting out. Plus, they have the potential to give you more useful information than every other type of research combined. 

If you'd prefer not to go the direct route, try using tools such as Twitter and LinkedIn, which allow you to follow business leaders in your chosen industry or market.

Networking events

Some of the best sources of information are networking events and workshops run by New Zealand Trade and Enterprise (NZTE). These events can be particularly helpful as some of the best advice comes from experienced exporters. To find out more, contact NZTE or your NZTE customer manager.

Export New Zealand also runs training and events throughout the year, which are good opportunities to learn and network with other exporters.

It's also a good idea to get in touch with KEA or your local Chamber of Commerce or industry association.

Competitors and partners

Another topic that should be investigated is the number of competitors selling similar products or services in your target market. Are they succeeding? Who are they selling to? Are they local or international companies?

In most countries, public companies are required to publish regular reports and financial information. In addition to disclosing the company's financial performance, these documents may also contain valuable insights into company strategy, market share, product innovation, and planned expansion into new markets. While private companies are not required to disclose as much information about their financial activities, you can often find out information about them in local business directories, and by monitoring coverage in business newspapers and journals. Google Alerts is a great tool for doing this automatically.  

As well as researching your potential competitors, it is just as important to research any companies you are considering doing business with. One simple check that you can undertake is to determine whether or not the company is registered with the relevant national or state agency. For example, in the United Kingdom the Companies House provides a free search for company names and information.

Taxes and duties

Before you start exporting, you should be aware of any tax compliance issues in your chosen market. Different countries have different tax laws, and there may be several levels of tax jurisdiction (e.g. federal, state, and local) within individual countries. Taxes are often based on income, or on the sale or use of a good or service.

For advice on tax laws specific to your market, searching for the national revenue agency website is a useful way to begin your research. Several international accounting and auditing agencies such as PricewaterhouseCoopers and Deloitte also publish general guides to tax compliance and corporate tax laws for specific countries.

One factor that may influence your decision about which market to go into is the rate of duty, if any, that applies to your product in different markets. In order to determine the duty rate that applies to a particular product, you will need to know the Harmonised System (HS) code that applies to it. Information about the Harmonised system (including a list of codes) is available on the Statistics New Zealand website. 

Professional customs brokers with knowledge of your market can also help with tax and duty enquiries – search online or review the CBAFF member directory to find a broker who can assist.

There are several databases online that provide information on tariffs for different countries.

APEC Tariff Information 

EU Customs Tariff Database (TARIC)

US International Trade Commission Tariff and Trade DataWeb

Quotas

Some countries operate quota restrictions on certain export commodities, with exports in excess of the negotiated quota often attracting prohibitive tariff rates.

Quotas relating to primary goods such as meat, wool, veal, and other food products are most relevant to New Zealand exporters. Detailed information on the operation of the beef and veal tariff quotas are available from the New Zealand Meat Board. The dairy quotas in many instances provide specific quota volumes for New Zealand products. These New Zealand-specific quotas are administered by Fonterra under the Dairy Industry Act.

A good source of information about quotas and quota rates, which covers a wide range of agricultural products and countries, is the OECD's Agricultural Market Access Database (AMAD).

Customs documentation

Most countries are extremely vigilant about import documentation being complete and accurate. Inaccurate and incomplete documentation may result in delays or even seizure of your goods. It is therefore important that you spend a little extra time on your paperwork to ensure a problem-free Customs clearance. The best source of information on required Customs documentation and compliance is often the relevant country's Customs or border control agency.

Freight forwarders are also a good source of guidance on the documentation required to get products into your target market. You can read more about working with freight forwarders here.

Product liability

Markets that have particularly litigious business conditions - the United States is a good example - may expose your exports to potential product liability, especially where they may cause personal injury. In some jurisdictions, the cost of defending your product in court may often higher than settling out of court, so it is important that you are aware potential product liability issues that may arise before you enter a new export market.

There are a number of sources for product liability information. These can include government organisations, commercial publications, or newsletters published by law firms. 

Overseas Market Access Requirements (OMARs)

All markets have different levels of ‘openness’, which determine how easy it is for exporters to access them. These levels can change with economic, social and political fluctuations.

The New Zealand Government continually works with its overseas counterparts to form agreements that allow our exporters the greatest level of access possible to world markets. These agreements are what we call OMARs, which form a guide to the current requirements of countries that you need to meet when you export.

It is your responsibility as an exporter to check that you comply with both New Zealand requirements and any relevant OMARs, so make sure you check for any changes regularly. The Ministry for Primary Industries is a good place to start. Their online information includes an OMAR finder for food and wine exporters

AME Info (Middle East) - A database containing 300,896 companies, indexed according to the North American Classification System.

Customs Brokers and Freight Forwarders of New Zealand (CBAFF) – this association represents professional customs brokers and freight forwarders in New Zealand. You can contact CBAFF or search their directory to find members with expertise in your target market.

CIA World Factbook - Profiles for over 100 countries with statistics including population, age structure, ethnicity and religion.

Doing Business - The World Bank’s Doing Business profile of the world market including information on standard business procedures such as time taken, cost, number of processes, and so on.

Dun and Bradstreet - Access the financial information, company history, management, and legal information.

Europages - A business listing that covers over 900,000 companies in 35 European countries.

Federation of International Trade Associations (FITA) - A worldwide directory of trade and professional associations.

General Administration of Customs of the People’s Republic of China, English site 

The Government of the Hong Kong Special Administrative Region of the People’s Republic of China, Customs and Excise Department

The International Trade Centre Trade Statistics - Provides a Trade Map for product trade flows up to the 4-digit level. All of these are based on UN Comtrade Statistics. Trade Map covers yearly trade data for 220 countries and territories and all 5,300 products of the Harmonized System.

The International Trade Centre World Directory of Importers' Associations - General sources of information on in-market trade-related organisations.

Kompass - A business listing of 1.8 million companies in over 75 countries.

United Nations Commodity Trade Statistics Database - Allows users to search import and export data statistics for commodities by country of destination and origin.

United States International Trade Commission - The latest US import / export trade data. Site requires free registration. 

Websites of National Statistical Offices from the WTO - Here you will find an alphabetical list of links to National Statistics Offices’ websites, which typically will hold demographic and other information about these markets.

World Customs Organisation - A global list of national customs agencies from the WCO that provides customs procedures, information on duty rates, and more.

World DataBank - One of the World Bank’s products, which provides access to data on development indicators around the world, including many topics that will be of interest to exporters comparing one or more markets with others. The World DataBank allows you to view data in table, map, or chart form, or to download it.

World Economic Forum, Global Competitiveness Report - Global Competitiveness Report for each market.

World Intellectual Property Organisation (WIPO) - Provides intellectual property information by country, found within Country Profiles.

World Trade Organisation Trade Profiles - The WTO provides brief country profiles highlighting merchandise trade figures, top five exports and imports, major trading partners and basic economic indicators.

World Trade Organisation Tariff Download Facility - Provides, among other things, a strong tariff analysis section. Registration may be required for this free site and its information.

 

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