Reaching Out to Global Markets It may be faster and easier to grow in existing markets, but eventually everyone wants to find a new opportunity. Finding the right partners is as important as finding the right market. Growing Your Market Most U.S.-based companies have their greatest customer base in the NAFTA region or traditional markets 78% When it comes to growth, the strongest results are closest to home, but Asia comes in second for expected growth 66% US, CANADA, MEXICO US, CANADA, MEXICO 22% CENTRAL, SOUTH AMERICA 12% ASIA 21% EU 9% 21% ASIA 6% EU 13% AUSTRALIA/OCEANIA 4% 10% MIDDLE EAST/AFRICA 6% CENTRAL, SOUTH AMERICA MIDDLE EAST/AFRICA 3% AUSTRALIA/OCEANIA NON-EU EUROPE 16% ALL OF THE ABOVE 0% NON-EU EUROPE Path of Least Resistance 31% ENTER NEW MARKETS 69% Given a choice, most companies would grow in developed markets rather than take on the burdens of an emerging market GROW MATURE MARKETS Why? What Risks? Transportation resources below expectations 24% Difficulty finding qualified logistics providers 24% Telecom/Info services below expectations 18% Customs clearance is complex and slow 15% Trade finance and funds flows are complicated 12% Difficult to understand export compliance (1-5 scale) Disruption of flow of goods 3.3 Cybersecurity data integrity 3.2 Financial 3.0 Regulatory/ compliance 9% 2.8 Security of product/ intellectual property Infrastructure issues were viewed as impediments by 42% of companies 2.7 Disruptions in the flow of goods and data, and the security of data were among the greatest perceived risks in new/emerging markets Coping With Challenges Partners make a difference in global markets, especially new markets or emerging markets where infrastructure, culture, and other challenges can be a barrier to success Working at a distance 35% 29% 18% We maintain inventories outside the market and ship into new markets We keep limited regional inventories and replenish into new markets It is difficult and confusing trying to manage from a distance Most company strategies position product outside or near the target market, in part, because it is difficult to manage distribution operations from a distance Working in the market Local distributors are helpful but visibility and control are lacking Local distributors are helpful but visibility and control are lacking 34% We use logistics service providers to manage inventories and distribution in new markets 16% 28% 21% The network of local distributors is effective Banking on relationships A strong trade/ logistics partner with experience in the market Internal experience and “institutional knowledge” 44% 28% Networking to find solid providers in the new market Government programs and in-country resources 24% 4% 68% of companies tap strong local partners to keep things flowing and provide visibility into new market operations 68% Bottom Line With all of the complexities of expanding into or entering new markets, does it pay? Yes, the benefits outweigh the cost No, the benefits aren’t worth the cost 38% 47% The jury is still out 15% SUMMARY: There are barriers and challenges to entering emerging markets, but there are resources to help with these frustrations. The right logistics partners with the right resources and expertise can help alleviate a majority of these pressures and help companies expand their supply chain. Source: Sept – Oct 2015 MHL Survey, Emerging Markets UPS: FROM FIGURING IT OUT, TO GETTING IT DONE, WE’RE HERE TO HELP. © 2015 United Parcel Service of America, Inc. UPS, the UPS brandmark and the color brown are registered trademarks of United Parcel Service of America, Inc. All rights reserved.