Global Sources' 2009 Importer Survey: Changing buyer behavior creates challenges, opportunities for China suppliers

Global Sources

2009-02-19 15:49 3442

57% of importers to buy more from China this year

3,000 major buyers control two thirds of U.S. total annual imports

HONG KONG, Feb. 19 /PRNewswire-Asia-FirstCall/ -- Despite falling consumer spending worldwide, many international buyers plan to increase imports this year, particularly from China. Concerns over supplier stability and changing product requirements are driving up the frequency of buyer communication with suppliers, and a small group of major buyers remain in control of the vast majority of imports in developed markets such as the U.S. These and other findings are highlighted in the 2009 Importer Survey, completed this month by Global Sources (Nasdaq: GSOL).

(Logo: http://www.prnasia.com/sa/200708071747.jpg )

"Close to 50% of surveyed buyers expect to maintain or increase their total import value in 2009," said Global Sources' COO, Craig Pepples. "We see a slight decrease in average price per item, and we know today's buyers require more flexibility in terms of order size. But China remains at the center of their sourcing plans, with 57% of surveyed buyers expecting to increase or maintain their total value of imports from China in 2009, as compared to 2008."

Among surveyed buyers:

-- 26% say they will increase spending on imports in 2009;

-- 20% expect to keep import spending flat; and

-- 54% indicated they will spend less on imports.

Survey results also show that:

-- 32% of buyers plan to increase total import volume in 2009;

-- 18% will keep import volume flat; and

-- 50% expect to decrease purchasing volume.

"Buyers indicated their biggest concern in 2009 is declining consumer spending (21%). This was followed by supplier-side concerns, including difficulty in finding quality suppliers (16%), increasing prices (15%), and concerns about supplier stability (15%)," said Pepples.

The survey also indicated that buyers are reviewing all their options and sourcing more cautiously to reduce risk.

Among surveyed buyers:

-- 42% said they are making more inquiries to new and existing suppliers,

as compared to 2008;

-- 29% are making about the same number of inquiries;

-- 29% are making fewer inquiries.

Buyers are also using a wide range of methods to find suppliers:

-- 40% use sourcing websites and search engines;

-- 39% attend trade shows and other face-to-face sourcing events;

-- 16% use trade magazines;

-- 5% use research reports.

Surveyed buyers also indicated that the most effective ways for suppliers to win orders are to improve product quality (18%), provide better prices (18%) and accept smaller order sizes (14%).

Pepples said: "As buyers change the way they source, suppliers must also change the way they operate to win orders.

"Buyers are submitting more inquiries than ever before, as indicated by the Survey. Metrics from Global Sources Online ( http://www.globalsources.com ) confirm this. Buyers sent about 18 million inquiries to suppliers in the fourth quarter of 2008, up 119% from the same period a year earlier.

"With buyers looking at more options for each purchase, suppliers must work harder to win the order. They must submit more competitive bids and lower minimum order requirements. Moreover, as more cautious buyers use a wider range of channels to find products, suppliers also need to promote themselves across more of these channels to get buyers' attention."

A small number of buyers control developed markets

"The 80/20 rule applies in many markets," said Pepples, citing a related study of the U.S. import market in 2008. "A small group of buyers control the vast majority of market share. This is good news for suppliers if they focus their promotion on influencing those critical buyers who control the market."

Key findings of the U.S. import market study include:

-- the top 3,000 importers accounted for two-thirds of all imports into

the U.S. by volume and value in 2008, according to U.S. Customs data;

-- 60,000 importers account for 75% of all U.S. imports by both value and

volume.

Pepples said: "This is the first-ever report giving such in-depth analysis of the U.S. buyer universe and it supports what we have been telling our suppliers all along. In today's challenging times, it is even more important for exporters not to waste time and energy influencing those without real buying power."

Complete results of Global Sources' 2009 Importer Survey are available for download at http://www.corporate.globalsources.com/MEDIA/DOWNLOAD/Global_Sources_Importer_Survey_09ENG.ppt . (Please copy and paste the full URL to an internet browser for proper viewing.)

About Global Sources

Global Sources is a leading business-to-business media company and a primary facilitator of trade with Greater China. The core business uses English-language media to facilitate trade from Greater China to the world. The other business segment utilizes Chinese-language media to enable companies to sell to, and within Greater China.

The company provides sourcing information to volume buyers and integrated marketing services to suppliers. It helps a community of over 790,000 active buyers source more profitably from complex overseas supply markets. With the goal of providing the most effective ways possible to advertise, market and sell, Global Sources enables suppliers to sell to hard-to-reach buyers in over 240 countries.

The company offers the most extensive range of media and export marketing services in the industries it serves. It delivers information on 4.3 million products and more than 196,000 suppliers annually through 14 online marketplaces, 13 monthly magazines, over 100 sourcing research reports and 11 specialized trade shows which run 32 times a year across 11 cities.

Suppliers receive more than 53 million sales leads annually from buyers through Global Sources Online ( http://www.globalsources.com ) alone.

Global Sources has been facilitating global trade for 38 years. Global Sources' network covers more than 69 cities worldwide. In mainland China, Global Sources has over 2,800 team members in more than 44 locations, and a community of over 1 million registered online users and magazine readers for Chinese-language media.

Global Sources Press Contact in Asia

Camellia So

Tel: +852-2555-5021

Email: cso@globalsources.com

Global Sources Press Contact in U.S.

James W.W. Strachan

Tel: +1-480-664-8309

Email: strachan@globalsources.com

Global Sources Investor Contact in Asia

Investor Relations Department

Tel: +852-2555-4777

Email: investor@globalsources.com