Import as a Source of Market Information

In markets with significant influence from international trade, a marketer can increase work efficiency by carefully studying import supplies.

Marketing actively works with analytical data. Competencies in the field of market research are highly valued by managers and allow for the implementation of a company's competitive strategy, regardless of the product it sells. However, collecting information from the market is a rather labor-intensive function, and the data obtained often does not meet the requirements of representativeness and relevance. The lower the quality of the data, the less effective the management decisions made will be.

This largely explains the fact that modern marketers are increasingly moving into the niche of analyzing online activity and paying less attention to working with the real market. This is not always justified, as online channels do not generate the main flow of consumers and revenue in all areas. This primarily applies to B2B and B2G markets. It is good if a significant volume of such a market is formed by import supplies.

What main goals can be achieved by working with customs databases and detailed study of import supplies?

Searching for Promising Niches for Import Substitution

In recent years, the topic of import substitution has been very popular among domestic businesses. This is facilitated by the state's foreign economic policy, fluctuations in exchange rates, as well as implemented support measures for import-substituting industries. The popularity of import substitution is largely related to the decline in real disposable incomes of the population and cost-saving in the corporate sector of the economy.

Finally, the popularization of import analysis from the perspective of finding promising niches for business development by some strategic marketing consultants is also important. However, they usually omit the fact that conducting such an analysis is quite simple for any medium-sized company with a competent employee on staff.

The logic of such a search is very simple – by reviewing customs databases, an understanding is formed of which product groups are currently imported into Russia in significant volumes. Then, the most interesting niches for a particular company are studied in a targeted and detailed manner. As a rule, these are segments where, in addition to a significant import component, the advantages and strengths of the enterprise can also be realized. That is, most often, organizations are interested in related markets, based on the product nomenclature. Less often, the proximity of sales channels or the coincidence of buyers is taken into account.

It is advisable to start by working with the website of the Federal Customs Service. In a special section, without any restrictions, one can download imports by HS codes, importing countries, periods, and regions of product entry. Such information allows for testing basic hypotheses about what is indeed imported in large volumes, from where, and into which constituent entities of the Russian Federation.

If the initial idea is confirmed, then it is necessary to subsequently turn to specialized companies to purchase customs statistics databases in the context of customs declarations. They contain detailed information about all movements of imported goods across the border, which allows obtaining data on product specifications and import prices. Consequently, an understanding is formed of what the market requires and at what price.

Next, the question should be addressed to production – if it can meet market demands in terms of price and quality, then the release of an import-substituting product may be justified. Moreover, we already know potential consumers and can roughly build channels for its implementation.

If the company does not have a competent analyst to conduct such work, then a third-party organization can be involved, but in most cases, this does not make much sense.

Selecting Suppliers to Improve Production Efficiency

This task is usually not assigned to marketing analysts, based on the fact that their area of responsibility is sales. However, this is a narrow understanding of the role of marketing. Strategic marketing should be engaged in increasing the competitiveness of the product as a whole, and therefore in issues of its quality and cost. If a company's product is superior to competitors in terms of consumer properties and has low production costs, then it can be sold in larger volumes and with a higher margin.

For markets where suppliers make a significant contribution to the formation of the product, both in terms of its cost and quality, it is extremely important to have exhaustive information about the market of the suppliers themselves in order to reduce their pressure and ensure more favorable supply conditions. If imports constitute a substantial share, then it will be extremely interesting to study import databases for the most important products.

There we can see the real import price of the product, and therefore understand the markups in the sales channels. Consequently, this provides an opportunity to conduct more balanced and substantiated negotiations on the price criterion. If our counterparty is not an importer itself but resells foreign goods for further sale, then the issue of shortening the sales channel and reaching the "first" importer, who is represented in the customs declarations database, can be worked out.

If our consumption volumes are sufficiently large and imports are critical, then the analytical work carried out will allow us to select alternative suppliers, compile a list of related products that can be used in production as a direct replacement or for developing the technological process for the future. Finally, we can contact a counterparty abroad and propose working directly with them.

Such work should be carried out quite regularly. This will allow controlling and moderating the appetites of suppliers and always having a "Plan B" in reserve. For advanced users, it can be suggested not to limit themselves to the analysis of Russian Federation import databases but also to study exports from those countries that import to us. Then it is possible to achieve exclusive working conditions with all the ensuing consequences.

Competitive Analysis in the Context of Foreign Products

This goal, although considered last, is usually fundamental for Russian manufacturers operating in a market with a high share of import supplies.

In this case, there is a clear understanding of which HS codes competitive products are imported under, which means it is necessary to regularly purchase the customs database from a reliable source and set up a system for operational processing of primary data from customs declarations.

For competitive analysis, we cannot neglect any information about imports. The assortment, volumes, prices, buyers and suppliers, logistics bases of supply, regions of import, and so on are all important.

Possessing this kind of information allows both assessing the overall market dynamics, calculating the shares of goods / brands and players, identifying concentration processes, and also tracking in detail the behavior of each of our competitors, as well as studying the work of sales channels.

For competitive analysis purposes, data must be updated regularly. Preferably monthly, but it should be kept in mind that current information is usually very expensive compared to similar information that is a year old. Therefore, one must be aware that such operationality is indeed necessary and can have a pronounced commercial result. It is important for large companies that have a significant share in oligopolistic markets with high (from one-third and above) dependence on import supplies. Otherwise, one can limit themselves to market analysis with a certain frequency and time lag, which will significantly reduce the cost of purchasing data without fundamental losses for business management decision-making quality.

Analysis of import supplies is technologically close to the study of exports but pursues different goals. If for certain reasons you need to analyze export supplies from Russia, then in this case you can count on information support from government structures, as the development of non-commodity and non-energy exports is a national project. In particular, on the website of the Russian Export Center, after free registration, information modules for analyzing exports both by country and by product items are available. However, commercial information in such reports is contained in a very limited amount, and to develop a market behavior strategy, it will be necessary in any case to refer to the content of customs declarations.