FedEx Express, a subsidiary of FedEx Corp. (NYSE: FDX) and the world’s largest express transportation company, announced the results of the ‘Export Competitiveness Index during COVID-19’ study. Commissioned with RGX, a leader in cross-border market research, the study measured the competitive performance of small and medium enterprises (SMEs) exporting from the Americas.
The study included interviews conducted with 1,200 exporters in the United States, Latin America and the Caribbean, with a maximum of 150 employees. The index ranks the companies on a variety of key indicators such as: the diversity and complexity of the markets they serve, the capacity to offer logistics solutions and financing, the level of support to international buyers, and whether they have an online presence that allows them to generate transactions or receive orders. These factors are key for companies to compete successfully in an international ecosystem, particularly in a time of crisis.
“Small and medium businesses have always been a key element to boosting the economy and growing international trade,” said Juan N. Cento, Regional President of FedEx Express Latin America and the Caribbean. “We engaged in this study to further understand the current challenges that exporting SMEs in our region are facing, and help them understand some of the areas they may want to prioritize and provide them with the tools to propel their future growth.”
The importance of the diversification in terms of the markets that small businesses serve and their ability to offer robust solutions online has become evident during the current health contingency stemming from the COVID-19 pandemic. In this regard, the study’s findings support the fact that there is a gap in cross-border electronic commerce across the Americas:
- 46% of the interviewed SMEs have a website that includes information about their products and services; however, they cannot receive online orders.
- 8% of the companies interviewed do not have a website.
- 77% of the interviewees cannot currently generate e-commerce transactions through their own website.
- 23% use B2B platforms to sell their products, but 48% do not use the internet for marketing initiatives.
Another factor of significant influence on an exporting company’s competitiveness is the ability to offer logistics solutions (that is, transportation to the destination market and delivery to the end user/consumer). The study reveals that 14 of the 15 SMEs surveyed (that obtained more than 80 points out of 100 possible) have available logistics solutions. This result underscores the importance of logistics as a key component of the service provided.
Financing options also ranked as important to attract and keep customers. In this category, SMEs in Brazil, Guatemala and the Dominican Republic demonstrated a higher financing capacity. Currently, 44 out of every 100 interviewed companies do not grant financing to their international clients which may be limiting their growth opportunities.
After analyzing ten key indicators, the study concludes that only 15, or 1%, out of the 1,200 companies interviewed achieved high scores and are well-positioned to export worldwide. For the complete findings of the study by RGX, please visit:
Spanish: www.rgxonline.com/es/ICE2020
Portuguese: www.rgxonline.com/ice2020portugues
English: www.rgxonline.com/eci2020
Study Methodology
The survey was conducted by RGX, a leader in the business segment of cross-border SMEs, and includes the results of telephone interviews with 1,200 small and medium-sized exporting companies (SMEs) with up to 150 employees in the Americas region, in 12 countries (100 SMEs per country) from five relevant industries in each country (Industrial Manufacturing, health care, Textiles and Clothing, Automotive and Perishables). The interviews were conducted between the months of November 2019 and February 2020.
Although the data was collected before the COVID-19 fully impacted the region, the results are relevant since they measure the export competitiveness, and show the many challenges that exporting SMEs in America have even before the environment of COVID-19. The findings of this study help companies to improve their performance and achieve international sales despite the worldwide recession.