High Tech

How high-tech companies can succeed in emerging markets


Take advantage of expert global infrastructure and trade know-how.

High in the snowcapped mountains bordering Mongolia and Siberia, Chinese teams of elk hunters use smartphones to track their prey. That means technology is everywhere, and growing fastest in emerging markets.

Africa, the Middle East and Asia are prime markets for high-tech companies looking to expand.

"Over the next decade, about one in every four new consumer dollars will be spent in China alone," says UPS's Alan Amling, vice president of global logistics and distribution marketing.

High-tech companies are on top of this trend, and two out of three global high-tech companies say they're either in emerging markets now or plan to be within the year, according to the fourth annual UPS Change in the (Supply) Chain survey of high-tech logistics executives. Based on robust growth rates, Africa, the Middle East and Asia are in the crosshairs, Amling says. He points to four ways UPS can help customers:

1. An expanding global network

Most recently, UPS doubled its contract logistics capacity in Dubai, with a 159,000-square-foot multipurpose hub to support trade with India, Africa, Europe and China. Earlier this year, two additional facilities were brought online in China, expanding UPS's capacity there as well.

UPS also has the world's largest network of field stocking locations (FSLs) for companies that need to keep inventory or replacement parts close to the customers they serve. Last year, UPS averaged one new location a month throughout Africa and the Middle East.

"If you are a company selling high-end servers or X-ray machines or security equipment, you simply cannot sell into a market like Africa unless you have the capability of servicing those items quickly," Amling says. "That's where having more than 950 FSLs around the world can give our customers a competitive edge."

2. In-country expertise

"What sets UPS apart is that we have people in place with in-country experience to help navigate trade regulations, which vary dramatically and change all the time," Amling says.

For example, each province in China has a different set of rules governing how goods can get into or out of that province.

"It's the same for countries in Africa," Amling says. "If you want to expand into Ghana, and you don't have a facility there or people there, UPS can either act as the importer of record or facilitate that process."

The ability to leverage UPS's established infrastructure and trade management expertise is particularly valuable to smaller high-tech firms. "You can grow without having to take on the added risk of building new buildings, hiring people or taking on partners in markets you're not as familiar with," Amling says.

3. Customs brokerage and paperwork

There's a lot more to customs brokerage than filling out forms, and it's easy to run afoul of ever-changing regulations: Industry export penalties are up 64 percent for noncompliance. What's more, it's easy to "leave money on the table" by not taking advantage of all duty free/duty defer opportunities available.

UPS is the world's largest customs broker, and can help ensure your products are cleared and able to get into the country, Amling says. UPS can make sure you're paying the applicable duties and taxes and that all your goods are coded correctly so you are not paying more than you need to pay.

"Our expertise around customs brokerage and trade management is a real differentiator for customers," Amling says.

Two solutions that streamline customs compliance are UPS TradeAbility®, a suite of web-based tools you can use to manage and track international trade, and UPS Paperless® Invoice, an electronic commercial invoice that reduces customs holds on international shipments by up to 56 percent.

4. Product life cycle management

When customers need repairs or replacements for their high-tech devices, they want the return procedure to be fast, easy and simple. The process is called "reverse logistics," and UPS is expert at it.

Amling points to the UPS partnership with Jabil Aftermarket Services as one way UPS customers can boost quality, reduce costs and improve service to end users. Jabil has 51 repair sites in 21 countries and handles millions of electronic device repairs per year – 6 million mobile phones alone.

"The story goes deeper than that," Amling says. "It's really about product life cycle and the end of life." You cannot simply dispose of electronics, because of strict environmental regulations in most countries. "UPS and Jabil can help not only with refurbish and repair, but with recycling and parts harvesting as well."


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