Marketing must analyze economic trends, the economic conditions of the target market, and whether the purchasing power of customers matches the positioning of their own enterprises and products.
1. Income
The income levels and distributable incomes of various countries vary greatly. Income not only affects purchasing power, but also forms consumption styles. Therefore, analyzing income levels is very important for cross-border e-commerce companies. However, income data often involves personal privacy and cannot be directly investigated. Therefore, per capita gross national product (GDP) is usually used to preliminarily judge the personal wealth of a country’s citizens. Relevant data can be found online. Among them, the Gini coefficient should also be paid attention to. The figure shows that the Brazilian Gini coefficient has reached 0.521, that is, the gap between personal incomes is huge. It can be inferred that Brazil’s national wealth is mainly concentrated in the hands of a few people, and the per capita purchasing power is not optimistic.
2. Exchange rate
For international trade and cross-border e-commerce companies, the exchange rate is an influencing factor that cannot be ignored. Because the cost of goods produced by a country is calculated in its own currency, when it is traded on the international market, the cost of its goods will definitely be related to the exchange rate. The high or low exchange rate directly affects the cost and price of the goods in the international market, and directly affects the international competitiveness of the goods. Taking my country as an example, in 1980, the RMB exchange rate against the US dollar was 1.534; in 1994, the exchange rate was unified, and the reference exchange rate of the RMB against the US dollar was set at 8.68; in 2005, the exchange rate reform began to appreciate: in 2014, the RMB exchange rate against the US dollar was 6.04; in January 2021, the RMB exchange rate against the US dollar was 6.5, and it has been fluctuating since then. The fluctuation of the exchange rate has brought great pressure to many export companies, and sometimes even the next order has already lost money. The exchange rate is the data that must be used to calculate the quotation. Because the current international payment currency is mainly US dollars, the exchange rate of the RMB against the US dollar should be mainly concerned. For authoritative exchange rate data, please refer to the RMB exchange rate midpoint announcement issued daily by the Monetary Policy Department of the People’s Bank of China. For cross-border B2B companies, you should also pay attention to the trend of exchange rate changes. You can refer to the RMB exchange rate midpoint chart issued by the Monetary Policy Department of the People’s Bank of China. The China Currency Network of the China Foreign Exchange Trading Center provides a more flexible query method.
3. Credit environment
Consumer spending is affected by savings, debt and credit availability. China has always been a country with high savings in the bank of its residents. In addition to the traditional idea of living within one’s means and thrift, it is also related to factors such as lack of personal investment drive and imperfect social security mechanism. On the contrary, many Western countries have high debt ratios and are accustomed to over-consumption. When enterprises start cross-border e-commerce, they must consider the credit environment of the target market and adopt corresponding market policies. For example, in the Indonesian market, due to the underdeveloped credit, consumers tend to pay cash on delivery.
4. Friendliness to foreign capital or foreign companies
Cross-border e-commerce may involve building overseas warehouses, so it is necessary to understand the local preferential policies, whether foreign capital is welcome to enter, and what conditions are given to foreign capital. In addition, it is also necessary to know whether there are restrictions on imported goods or whether tariffs are imposed. For example, Indonesia stipulates that items above US$75 must pay 7.5% tariffs, 10% value-added tax and 10% income tax, and value-added tax and income tax are levied on the basis of tariffs, resulting in a tax rate of 29%, while Singapore only needs to pay 7% consumption tax.