How local manufacturers, SMEs can penetrate new export markets

photo

Showgoers admire shoes at a recent expo in Kigali. Rwanda is promoting consumption of local products to support industries and help reduce its growing import bill. / Apollonia Uwanziga.

rwanda continues to look for new export markets besides encouraging local consumption under the Made-in-Rwanda campaign initiated by the Ministry of Trade, Industry and East African Community Affairs and the Private Sector Federation (PSF).

These are some of the initiatives that seek to widen the country’s exports, support local manufacturers and help reduce the growing import bill, as well as give the Made-in-Rwanda products a competitive edge in the local, regional and global markets. This, however, challenges the private sector, particularly manufacturers to understand market trends and improve their production capacity and quality supported by the good investment and business environment in the country.

Manufacturers should have knowledge about the trading systems in target markets to promote their products effectively and also be able to negotiate better prices.

Benjamin Franklin once said, “Failing to prepare, you are preparing to fail” and one will never get a second chance to make a first impression. Therefore, it’s crucial for Rwandan manufacturers to understand this to be able to penetrate and access new export markets in a competitive manner.

In today’s fast-changing world, market entry is facilitated by knowledge on the prevailing market trends and dynamics, skills and competitive products. That’s why strategic marketing and making of informed decisions, which are in line with market demand, could further support the Made-in-Rwanda goods, locally and in other markets.

The drive, that targets to boost and stimulate local production, consumption and support the industrial sector, will play a key role in the country’s import substitution and trade diversification approach promoted by its domestic market recapturing strategy.

The campaign could ride on the back of the various bilateral agreements concluded between Rwanda and other trading partners to expand the domestic value chain and tap into opportunities presented by these nations.

Already, this has contributed to a reduction in the country’s trade deficit, according to central bank figures for 2016.

Rwandan manufacturers should, however, beware of that the marketing principles employed in the home market might not work in export markets.

When entering a market dominated by a monopoly, manufacturers must understand that they have a high chance of failing and be prepared to lose substantial amounts in sunk costs.

Therefore, one strategic response is to add value to products and form partnerships with local businesses in the countries as they understand the system. This will also help the local firm to devise ways of producing goods that are different from what provided by the monopoly in the targeted market (in a timely and accurate manner).

Companies must also ensure protection of their intellectual property rights, including copyrights, patents, trademarks, as well as put in place effective dispute settlement mechanisms with trading partners both domestically and in export markets. Most Rwandan products have not benefited from the opportunities presented by the bigger regional and international markets due to the intellectual property rights registration requirement.

The situation (lack of intellectual property rights registration) has exposed local producers to counterfeiters. In some countries, resorting to legal action over a commercial dispute can be futile because their laws do not support foreign exporters with unregistered trademarks.

Maximising regional and global opportunities

The East African Community offers local firms huge markets opportunities, and big local companies should take advantage of this market that boasts of 150 million people by offering a wide range of products and services. Small-and-medium enterprises (SMEs) can also exploit these opportunities by engaging in cross-border trade of say, agriculture produce, beverages, and general trade.

Though firms need to rethink their apathy toward advertising, and understand that the methods or media campaigns that have been successful in Rwanda may not work in other markets.

However, a good idea should be able to transcend borders. With the reduction of international trade barriers; globalisation and advances in technology, media consumption, and knowledge transfer have created ‘similar’ consumer tastes and preferences for different products, such as electronics, clothes and fast foods.

Technology and globalisation, being cultural tools, have therefore helped promote new practices among buyers with many now increasing using e-commerce platforms to buy products.

The development challenges local industrialists and suppliers to embrace these platforms to market their goods and services and build a sustainable revenue base over time in the target markets.

However, with the language and other cultural symbols also rapidly changing, manufacturer and marketers need to become skilled communicators to be able to address both the global and local market requirements appropriately.

In addition, local firms should improve their negotiation skills to benefit from regional and international trade. Rwandan traders and manufacturers should also put in place clearly defined goals and strategies, that are Specific, Measurable, Achievable, Realistic and Timely with an Evaluation and Review (SMARTER).

Besides, local manufacturers should consider and use profitably the already available platforms and initiatives provided by the government to boost production and market penetration, domestically, regionally and globally. By embracing advertising and marketing, market research, communication and study legal guidance, producers will find it easy to successfully expand locally and enter new and lucrative markets abroad.

The writer is a lawyer and a master’s student in International Trade Law and Policy at University of Lundi Sweden (coordinated by TRAPCA/EASMI).

rwakisetaherbert23@yahoo.com