2 September 2021
There is no question that 2020 was an unprecedented year for global trade. Modern society was embracing global economics, and the world had never been more connected. Then came the COVID-19 pandemic, and exporters watched in horror as consumer demands changed and government shutdowns disrupted international supply chains.
Yet, there is reason to be optimistic as not all global trade trends in 2021 have us worried. The world health crisis and the economic uncertainty it brought seems to be bringing us together in ways previously unthought of.
In the digital age, it seems that globalization is such a powerful force that not even COVID can stop us from working together for the prosperity of all nations. Keep reading as we explain the trends in the global marketplace and how KOMPASS can help you stay ahead of the curve.
1. COVID-19 Pandemic Impact Continues
Although early signs of the vaccination effort in Europe and the United States point towards a possible turnaround to the virus threat, the situation in Asia and South America has escalated. The pandemic is far from over, but after a year of global trade chaos, exporters are finding ways to get back to business as usual.
Leading the recovery is technology. Technology product sectors, particularly medical equipment and personal electronics, saw steady growth in 2020. This trend is fueled by a need for implementing remote working strategies as we continue to isolate ourselves from physical contact.
With travel bans in place, B2B trade executives are trading in their international business trips for virtual trade missions (VTM). Video chat and virtual conferences keep the conversation going. Online databases and research tools can keep export businesses connected and expanding their brand despite a lack of physical meetings.
2. Outsourcing Supply Chain Management
Managing supply chains is hard enough without taking away in-person and in-house collaboration. Export companies utilize the supply chain as a service to free up valuable human resources for developing market share (SCaaS).
An export business that outsources supply chain logistics can keep a vital local presence to replace their international teams. Many exporters say the outsourcing relationships forged in 2020 will continue into 2021 and beyond.
3. Climate of Supply Chain Risk Assessment
Supply chains were hit hard in 2020 with many difficulties. Governmental restrictions on imports and exports created a vacuum that has proven challenging to maneuver for many manufactures. Factory shutdowns followed, and like dominoes, entire product sectors shut down or run at significantly reduced capacity.
Thousands of businesses worldwide were forced into bankruptcy. Those that survive look to strengthen connections with their assisting supply chain with new contract stipulations. The global trade crisis is, in a way, creating new network connections as exporters look to mitigate risk.
In other words, out of a need to find mutual solutions, exporters reach out to government trade agencies, transport, and shipping companies and seek new B2B relationships to ensure growth.
KOMPASS understands the needs of exporters in these challenging times. We offer real solutions for global scale expansion with our EasyBusiness B2B database. Our clients have access to vital information on over 49 million companies in +70 countries.
4. Improved Communications
In times of crisis, people generally come together. In global trade, we are seeing a trend towards improving B2B relationships through transparency. Exporters are keeping their customers close and reaching out to offer assistance in any way they can.
Explaining difficulties and company needs is essential to keeping trade talks open. Customer relations management has always been essential, but managing B2B relationships is of the utmost priority in 2021.
Exporters are scrabbling to provide solutions for their customers as they keep them updated on supply delays and other setbacks. Kompass Data for Salesforce streamlines CRM by providing your sales team with up-to-date and accurate information about the companies you serve.
5. Greater Flexibility in Logistics
2021 will be a year of innovation in international trade. With the illusion of stability in the old ways of trading dissolved, exporters and the companies they serve are more open to exploring new ideas. The lean and mean logistics model where companies seek first to reduce costs and pad margins are being replaced with an urgency to diversify into new markets.
We are likely to experience a wave of technology integration such as transportation management systems (TMS). Exporters are investing in better data management and analysis. They justify the short-term costs of upgrading systems with the long-term goals of staying competitive in a rapidly changing global marketplace.
6. Exports Back on the Rise
With 2021 comes renewed hope for struggling export businesses. After ten years of solid gains in increased trade worldwide, 2020 saw global trade not increase but decrease by 5.3% (according to the World Trade Organization). As shocking as this number is, some economists predicted a drop of 10% in international trade or more at the start of the pandemic.
The WTO predicts that trade will continue to increase in 2022 and beyond, that is if vaccines can finally change the course of the pandemic. There is understandable concern that hot spots like India and Brazil will be the norm for some time, and vaccine-resistant strains may emerge, further extending the global health crisis.
KOMPASS: Your Global Trade Partner
The global economy may very well be in a recession, but global trade will rebound better than ever. Companies that move quickly to innovate and expand their influence will come out stronger on the other side.
Information is power for change. That is where KOMPASS comes in. Our expertise with exporters worldwide improves visibility and access to the new customers you need to expand your companies reach in the global market. Find the right Kompass solution for your business in four easy steps with our KOMPASS Solutions Finder.
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