By Frank Lavin
The domestic market in Asian mega cities like Shanghai is a growing option for export businesses.
With the threat of a double-dip recession looming, many American businesses probably are not thinking about expanding into foreign markets. But in the fight to stay afloat in an uncertain economy, exporting globally is a prudent strategy for businesses of all sizes. The Asia-Pacific region is a particularly ripe target for American exporters – Department of Commerce statistics show that U.S. exports to the region have grown by 89 percent since 2001. American businesses are increasingly focusing on Asia, especially China. In all likelihood the Asian marketplace will serve as the driving force in world commerce and U.S. business should act accordingly.
As the old adage goes, the best defense is a good offense, as Peter Cohan and I argue in our new book, “Export Now”, excerpted below:
“Every company needs to think about exporting. It is no longer safe to remain content in your home market. Sooner or later, you are likely to face threats from foreign entrants. You need to find a way to take the offensive and enter new markets… your business will need to develop a culture of flexibility and innovation. This does not mean that every day you will generate a new product, or that every new market will require a new approach. However, markets, customers, and opportunities differ, and a wise business knows how to take advantage of these differences. Trade will create more winners than losers, but there are likely to be losers, including companies that cannot adjust to a more competitive environment, companies whose entire approach to trade is defensive, and companies that are unable to experiment. These companies run a higher risk of failure than their counterparts.”
In the last decade U.S. exports to China increased 468 percent while exports to the rest of the world grew by only 55 percent. Last year more than 450 million Chinese customers shopped online through market sites demonstrating that the Chinese domestic market is increasingly viable. The bottom-line is clear: How U.S. and multinational export businesses approach their trade strategies in Asia will shape their overall success in the face of economic downturn.
Frank Lavin served as the U.S. Undersecretary of Commerce for International Trade and U.S. Ambassador to Singapore. He is the founder of Export Now.
