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Doing Business with the United States: Opportunities for Uzbekistan

This is a presentation slide deck used by WCC International team during the videoconference organized jointly by the American-Uzbekistan Chambers of Commerce in Washington DC and Chamber of Commerce & Industry of Uzbekistan in Tashkent. Topics included:
- US Uzbekistan Bilateral Trade in Numbers
- Market Entry Strategies for Exporters and Investors
- Market and Customer Research techniques
- International Marketing: Product localization and adaptation
- Price Adjustment to local market demand
- Customs Clearance, Logistics, Distribution and Fulfillment
- Global E-Commerce for Entrepreneurs in Central Asia

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Doing Business with the United States: Opportunities for Uzbekistan

  1. 1. WE HELP BUSINESSES BUY & SELL ACROSS BORDERS HASSLE-FREE Doing Business with the United States: Opportunities for Uzbekistan February 23, 2018 Washington DC, United States American-Uzbekistan Chamber of Commerce Hosted By:
  2. 2. Exporting: Direct vs Indirect Licensing and Franchising Joint Venture Strategic Alliance Direct Investment WCC International, Inc. I 10411 Motor City Drive STE 750 I Phone (+1) 301.202.8586 I www.wccinternational.com I office@wccinternational.com Foreign Market Entry Strategies
  3. 3. $690 mln $570 mln Source: The Observatory of Economic Complexity, MIT Media Lab https://atlas.media.mit.edu KAZAKHSTANRUSSIA $1,21 bln $1,88 bln $703 mln The top export destinations of Uzbekistan (2015) TURKEY CHINA SWITZERLAND MAIN EXPORT COMMODITY: - GOLD - NATURAL GAS - COTTON
  4. 4. IMPORTS FROM UZBEKISTAN $11,828,956 $30,620,498 $9,715,446 U.S.- Uzbekistan Bilateral Trade in Numbers Source: Foreign Trade Division, U.S. Census Bureau 2017 YTD-SEP20162015 U.S. EXPORTS TO UZBEKISTAN 2017 YTD-SEP20162015 $93,666,486 $317,880,066 $137,962,928
  5. 5. What did the United States sell to Uzbekistan? 2016 AGRICULTURAL PRODUCTS $470,783 CHEMICALS $4,772,570 FOOD & BEVERAGE $411,071 ELECTRICAL EQUIPMENT, APPLIANCES & COMPONENTS $2,700,636 TRANSPORTATION EQUIPMENT $250,661,794 SPECIAL CLASSIFICATION PROVISIONS, NESOI $25,486,850 COMPUTER AND ELECTRONIC PRODUCTS $16,657,309 MACHINERY, EXCEPT ELECTRICAL $10,095,629 Source: Foreign Trade Division, U.S. Census Bureau
  6. 6. What did Uzbekistan sell to the United States? 2016 WORKS OF ART, COLLECTORS' PIECES AND ANTIQUES $1,176,152 BEVERAGES, SPIRITS AND VINEGAR $208,764 CARPETS AND OTHER TEXTILE FLOOR COVERINGS; APPAREL ARTICLES AND ACCESSORIES $145,100 COTTON, INCLUDING YARN AND WOVEN FABRIC THEREOF $2,078 EDIBLE FRUIT & NUTS; CITRUS FRUIT OR MELON PEEL, CERTAIN ROOTS & TUBERS $2,489,134 COFFEE, TEA, MATE & SPICES, OIL SEEDS, ETC. $1,636,578 MACHINERY & PARTS (REACTORS, BOILERS, ETC) $1,104,854 INORG CHEM; PREC & RARE- EARTH MET & RADIOACT COMPD $21,902,892 Source: Foreign Trade Division, U.S. Census Bureau
  7. 7. Why Uzbekistan? The Government of Uzbekistan aims to attract $30 billion of investments to the oil and gas industry through 2021, thus, offering export opportunities for gas extraction, transportation and processing technologies. External demand for food products produced in Uzbekistan creates export opportunities for suppliers of food processing and packaging technologies Uzbekistan is developing its transportation infrastructure, including interconnections with major transcontinental corridors. The national railway company intends to modernize its fleet of locomotives. Uzbekistan is open to look into business partnership opportunities with U.S. companies in any sectors of economy, including energy & agriculture.
  8. 8. Why the United States of America? The United States is world renowned for high-quality, innovative goods and services, best business practices and superb customer service The United States is a world leader in an industry-specific business problem solving and launching turnkey business operations around the globe The United States is known for excellence in education, training and capacity building for public and private entities The business ecosystem of the United States enables all businesses access to investments and facilitates development of new products United States is a world leader in product innovation, manufacturing, branding and marketing, and a highly skilled workforce.
  9. 9. Access to industry-specific knowledge Access to foreign capital Freedom of Contract and Law Access to business & political risk insurance “Halo Effect” protection in domestic investments Benefits and advantages of having U.S. business partner
  10. 10. International Finance Institutions: U.S. Government financial Institutions: U.S. Accelerator & Incubator Programs: Your Potential Business Partners in U.S. and beyond
  11. 11. OPIC’s presence in select businesses of Uzbekistan
  12. 12. • PESTEL factors – Political – Economic – Social – Technological – Environmental – Legal • Individualistic Society vs Collectivist Society • Differences in ways of doing business • Culture, Language and Social attitude • Intracompany culture Marketplace: Opportunities and Challenges
  13. 13. Why You? & Why Your Product?
  14. 14. Supply vs. Demand
  15. 15. Supply vs. Demand
  16. 16. WCC International, Inc. I 10411 Motor City Drive STE 750 I Phone (+1) 301.202.8586 I www.wccinternational.com I office@wccinternational.com Primary Market Research Secondary Market Research - Interviews with potential customers - Surveys and Focus groups - Talks with prospective buyers - Talks with intermediaries - Statistics / Data - Official & Scientific Publications - Specialized database - Internet Blogs, Books, etc. Tools and Methods for Market Research
  17. 17. Atlas Media MIT Lab https://atlas.media.mit.edu/ Useful Links for Market Research http://databank.worldbank.org/ https://www.cia.gov/library/publications/the-world-factbook/ World Bank’s World Integrated Trade Solutions: http://wits.worldbank.org/ International Monetary Fund: http://www.imf.org/en/Countries/ http://www.nielsen.com/ http://www.eiu.com/ http://www.pewinternet.org/
  18. 18. Embassies, Consulates Government Bodies Buyers / Sellers Distributors, Agents Trade Associations Research & Marketing Centers Diaspora / Ekspats Suppliers and Manufacturers Who can help you to find a market for your products?
  19. 19. Trade Shows Government Agencies Internet presence White Paper Referrals Webinars Product demos Search Channels Trade Missions Social media Where & How to find the Buyer?
  20. 20. Select International Trade Events in the U.S.
  21. 21. Organic and Natural RTD and RTE food items Fruit and vegetable juice Food condiments and additives Jams and preserves Dairy products Summer Winter Herbs & Spices Sweets and Pastries
  22. 22. 1 Source: The World Bank: https://data.worldbank.org GDP per Capita / Country Comparison (2016 est.) Tajikistan $2,985 Kirgizstan $3,557 Uzbekistan $6,525 China $15,559 Turkmenistan $16,908 Russia $25,331 Kazakhstan $23,162 European Union (ave.) $35,632 United States $57,638
  23. 23. USA $5.30 (0%) Eurozone $4.47 (-15.8%) China $2,92 (-45%) Turkey $3,01 (-43%) Russia $2,28 (-57%) Ukraine $1,70 (-68%) Last update: July 30, 2017 The Big Mac Index
  24. 24. Premium pricing Penetration pricing Value/Economy pricing Psychological pricing Geographical pricing Product line pricing Product / Service Pricing PAY AS YOU GO $0.99 vs $1.00
  25. 25. WholesalerSupplier Manufacturer Distributor Retailer Consumer B2B B2C WCC International, Inc. I 10411 Motor City Drive STE 750 I Phone (+1) 301.202.8586 I www.wccinternational.com I office@wccinternational.com Where are you along the supply chain?
  26. 26. Direct sale Sales through retail channels Retailer B2B B2B B2C B2G Direct Business to Government sale Sales & Distribution Options Wholesaler Supplier Retailer Consumer Consumer Government Consumer Supplier Supplier Supplier
  27. 27. Why You? & Why Your Product?
  28. 28. Freeze drying solution for small farms
  29. 29. U.S. businesses can help you find: ü Machines, Components and Spare Parts ü New, Used and Refurbished Equipment ü Maintenance, Service and Tech Support, ü Education and Training Packaging and Processing Solution Providers
  30. 30. Value Proposition Right price Right quality Right quantity Consistent supply Satisfactory terms What do foreign buyers expect from your offer?
  31. 31. • Channel • Inventory • Logistics • Distribution • Advertising • Sales Force • Publicity • Sales promotion • List Price • Discounts • Credit terms • Bundling • Brand • Packaging • Functionality • Services PRODUCT 4 PLACE PRICE PROMOTION The Marketing Mix Concept - 4Ps
  32. 32. Value to Your Customer Value to End Customer Price Accessibility Service Intellectual Property Novelty Unique features What do you need to show to your customers?
  33. 33. Consumer eye-tracking research shows that the STANDCAP Pouch performs significantly better than rigid packaging in attracting and keeping shoppers’ attention. Product Innovation and Product Appeal A leading brand experienced a sales increase of 69.7% when offering an existing product in the STANDCAP Pouch. A Package Can Increase Sales by 69.7%?
  34. 34. Unique U.S. Products: Export of Goods and Services
  35. 35. Unique U.S. Products: Export of Energy Solutions POWER STORAGE 5 FULL HOURS 25 KW MODULES · 20 YEARS
  36. 36. Unique U.S. Products: Export of On-Demand Training Governments I Libraries I Universities I Corporations I Business Associations LEARNING SOLUTIONS FOR:
  37. 37. Unique Products: Export of Goods GREAT FOR: - SMALL FARMS - BREWERIES & WINE CELLARS - DAIRY, POULTRY & MEAT - RESTAURANTS & GROCERY STORES - FLORAL, PLANTS, NURSERY, ETC.
  38. 38. Export of Services vs. Export of Goods Export of Services Construction, design, and engineering Banking and financial services Insurance services Legal and accounting services Computer and data services Educational Services Services in support of Product exports Export of Goods Food & Beverage Durable Goods Nondurable goods Agriculture Computers & Electronics Oil Gas and Minerals
  39. 39. Distributor/SF Support program New Account Discounts Participation at trade shows and advertising programs within their network Quarterly, Semiannual & Annual Discount programs (pass-onto-consumer) Support to sales agents and sales brokers within distributors' network Retailer/Rep Support program New Account Discounts Participation in In-store and online sales promotions Participation at special programs/events, CSR fundraising projects, etc. Organization of In-store and Out-of-store demos and other promo activities Marketing & Sales Support for Distributors / Retailers
  40. 40. Distributor Support Program (Sample) •Offer free goods or cash equivalent necessary for a new distributor; •The amount is negotiable (assumptions should be included) New Distributor Allowance •Distributor Ad Program •Trade Show Program: Distributors may require you to participate at their trade shows 1 or 2 times a year Advertising •Plan once a quarter for a O/I program with 15-25% off and request that it be passed on to the retailer. Off Invoice Allowance Program •Some sort of contest or "spiff" for the salesmen •Depends on what distributor will allow you to do. Distributor Salesmen Placement Program •When distributor accepts your products you hire sales brokerage firm that works with a retail company where your products have been presented. Sales Broker Fee
  41. 41. Retailer Support Program (Sample) •Slotting as this is sometimes called. Once you are a vendor in any part of a chain operation, you are a vendor in all of their regions. New Vendor Allowance/Free Fill •You should have a website for your product or service you offer to consumers and digital advertising program Website and Internet Marketing Program •Very effective means of attracting attention to a product in a crowded category. Other options include shelf signage and pieces that define your shelf position Ads: Special Retailer Designed Communication Device •Price reduction to "club" or "special" members Scan Program/Promotions •In-Store Demos to reach potential consumers by offering samples. Discount Coupons (digital and paper-print coupons) and In-Store Advertising, Club Card Programs, Customer mailer program, etc. In-Store Demonstrations
  42. 42. Direct Mail Campaigns Retractable Banners Sale SheetsProduct Demos Booth Setup Product demo stand Marketing Collateral for Trade Shows and In-Store Promos Shelf danglers, tags, etc
  43. 43. Product Localization & Adaptation Product Naming Text and Graphics Culture Region Language Symbols, icons and colors Numeric, date and time formats Container size (if applicable) Legal and other requirements
  44. 44. • Purchase potential in foreign markets – Customer segment: B2C, B2B, B2G New P2P – Demography: population, age, gender, – Spending power, PPP – Foreign government as a Buyer – Foreign Government as a Business Partner • Infrastructure for product shipping, warehousing and delivery to customer – Geography – Logistics – Technical parameters: electricity (220V vs. 110V) – Differences in packaging, size and weight – (1 Litr / 33.8 Fl.oz. / 1 LBS / 540 Gr) Marketplace: Opportunities and Challenges
  45. 45. Food Safety Certificates and Standards
  46. 46. Ingredients, Packaging, Labeling and Dating Requirements Best if Used by: September 12, 2017 Sell by: September 12, 2017 Best if Used by: 09/12/2017 Not Recommended Two Piece Wine Label
  47. 47. Ugly Product names
  48. 48. Common mistakes companies always do in exporting
  49. 49. The Federal Alcohol Administration Act (FAA Act) l State laws and regulations Laws & Regulations on Food, Beverage and Alcohol l US Code of Federal Regulations, Chapter 19 CFR l US Tariff Act of 1930 The Bioterrorism Act of 2002 The Federal Food, Drug and Cosmetic Act Fair Packaging and Label Act Nutritional Labeling Education Act The US Harmonized Tariff System (HTSUS)
  50. 50. Limits on sales at grocery stores, online or direct Restrictions as to mailing, importation, marketing, distrib. l Sales and Excise Taxes, Duties, etc. Laws & Regulations on Food, Beverage and Alcohol The three-tier system of alcohol distribution Federal Basic Permit (plus ABC license) Certificate of Age and Origin (Natural Wine Certificate) Certificate of Label Approval Requirements (COLA) Proper marking for products Manufacturer and Importer Registration with FDA Prior Notice with FDA
  51. 51. Landed Cost of Imported Products Shipping Customs Risk Overhead Landed Cost Crating Packing Handling Freight Duties Taxes Tariffs Brokers fees Harbor fees Customs bond Insurance Compliance FDA Exam Fees Quality Safety Purchasing staff Due diligence cost Travel Exchange rates L/C charges Bank Interests – Certificate of Origin – GSP Certificate (if applicable) – Other documents (depends on goods entered) • Import/Export Documents – Power of Attorney (CBP) – AWB / Bill of Lading – Commercial Invoice / Consular Invoice
  52. 52. GTİN General (Product) Liability Insurance, UPC and Bar Codes UPC EAN
  53. 53. Intellectual Property Rights in Exports (TM, SM, Trade Secret, Patent, ®) l Types of Intellectual Property l Product Design, Trade Secret (Formula) ü Company’s brand image expressed via its trademark Export plan and strategy as a “trade secret” Brand Confusion and Brand Dilution Hard to enforce if it is unprotected P
  54. 54. Private Label vs Brand Name Brand owned by • Producer • Manufacturer Private brand owned by • Retailer • Supplier
  55. 55. Brand Dilution vs Brand Confusion
  56. 56. Geographic indicators: Cognac vs Brandy
  57. 57. Open account Other forms of payments? Cash in advance Letter of Credit Progress paymentsEscrow payments Export credit insurance Export factoring Forms of Payment in International Trade - Pay-As-You-Go - Mobile phone (SMS) - Scratch cards, etc.
  58. 58. • What distribution and delivery medium do you use? • Work experience, capacity and client base of the intermediary? • Product sales via e-commerce platforms: Direct-to-Consumer, Fulfillment and Dropshipping B2B: B2C: Product distribution and delivery to a customer E-Commerce platforms Distribution and delivery platforms
  59. 59. Merchant Account Solution
  60. 60. Merchant Account Solution Merchant Account allows: ü Accept local and global payments ü Connect your local bank account ü Track expenses, bills and sales taxes ü Customize and create unlimited invoices and estimates ü Add partners, investors and other collaborators ü Prepare accounting and bookkeeping reports ü Integrate various payment options like PayPal and Stripe
  61. 61. TIME TO ASK QUESTIONS Q/A WE HELP BUSINESSES BUY & SELL ACROSS BORDERS HASSLE-FREE WCC International, Inc. 10411 Motor City Drive, STE 750 Phone (+1) 301.202.8586 office@wccinternational.com www.wccinternational.com
  62. 62. WE HELP BUSINESSES BUY & SELL ACROSS BORDERS HASSLE-FREE Thank You for Your Attention! WCC International, Inc. 10411 Motor City Drive, STE 750 Phone (+1) 301.202.8586 office@wccinternational.com www.wccinternational.com

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This is a presentation slide deck used by WCC International team during the videoconference organized jointly by the American-Uzbekistan Chambers of Commerce in Washington DC and Chamber of Commerce & Industry of Uzbekistan in Tashkent. Topics included: - US Uzbekistan Bilateral Trade in Numbers - Market Entry Strategies for Exporters and Investors - Market and Customer Research techniques - International Marketing: Product localization and adaptation - Price Adjustment to local market demand - Customs Clearance, Logistics, Distribution and Fulfillment - Global E-Commerce for Entrepreneurs in Central Asia

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