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B2B buyers value offline relationships despite online tilt, survey finds

Jul 18. 2019
UPS, a prominent logistics operator, has canvassed views among B2B buyers in Asia.
UPS, a prominent logistics operator, has canvassed views among B2B buyers in Asia.
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Business to business (B2B) buyers in Asia do much of their purchasing online and rely heavily on offline relationships while seeking out solid after-sales service, a survey by UPS has found.

The 2019 UPS Industrial Buying Dynamics Asia Pacific Study, which surveyed more than 3,400 industrial purchasers globally - including 600 from companies across China, Japan and Thailand - offers region-level insights and specific market-level traits that can help B2B businesses better connect with buyers in Asia.

“What we see in Asia is that business relationships are not one dimensional – online channels are popular, but so too are more traditional forms of buying, and this presents a real balancing act for those who want to sell in this region,” said Sylvie Van Den Kerkhof, vice president of marketing at UPS Asia Pacific region. “The data suggests that businesses wanting to work in Asian markets need to ensure that their e-commerce and bricks-and-mortar operations are both optimized and integrated, while ensuring that post-sales services, such as returns, offer a seamless experience for buyers.”

Where in other regions, shifting demographics have a much bigger role to play in purchasing behavior, to be successful here in Asia, a recommended approach is to consider buyers by job responsibility, rather than nationality or age demographic. As the study shows, Asia is a region of tremendous complexity –one where all buyers are focused on the targeted demands of service for their organizations.

The report found strong indications that online buying is set to increase, with Asian buyers saying they plan to use this channel more within the next five years. Amongst those that prefer making purchases online, Japanese buyers purchase online at a higher rate (31 per cent) than buyers in both China and

Thailand (both at 14 per cent). Meanwhile, in Thailand, companies with higher budgets report that in the next three to five years, they are more likely to move purchasing online; and in China, mobile online purchasing is seeing stronger growth than in other Asian nations.

Notwithstanding the anticipated increase in online purchases amongst Asian buyers, the report also indicates that speaking over the phone or in person happens more frequently in Asia than in the United States or Europe. Asian buyers especially value establishing a relationship in person before purchasing online – this practice is most pronounced in China, where winning trust before doing business is a key part of the deal-making process.

As a region, Asia is similar to the rest of the world in terms of how much its buyers source from domestic suppliers - 67 percent of all B2B purchases in Asia come from domestic suppliers, versus 73 per cent in the US and 64 per cent in Europe. However, there is one outlier in the region: Japan, where buyers source 90 per cent of all goods domestically. This may change in the near future, however, with the country having recently signed a series of free trade deals - most notably with the European Union. When asked what they considered to be the barriers to making international purchases, the top three factors listed by respondents in Asia were longer transit times (60 per cent), customs delays (55 per cent), and issues with returns (45 per cent).

Globally, post-sales support continues to emerge as an important component of industrial buying, consistent across different categories of buyers and industry segments. However, the research found Asian buyers, in particular, value all post-sales services more than buyers do in other regions. These include services such as general returns, pick-up services for difficult-to-ship products, and the provision of ready-made packaging and shipping materials for returns. In China and Japan, the post-sales service that matters most is on-site maintenance and repairs, and in Thailand, returns rank most highly.

“As the Thai government’s focus on developing innovation and technology has driven a shift towards a more value-based economy, we’re seeing a transition in Thailand’s manufacturing scene. The growth of high-value industries will place greater emphasis on the need for manufacturers and distributors to prioritise value-added services.” said Russell Reed, managing director of UPS Thailand. “The study highlights the importance that Thai industrial buyers place on returns. This is just one of the many areas that UPS has been able to provide strong solutions for in order our customers differentiate from competitors. These insights will enable us to provide more comprehensive and effective solutions for Thai manufacturers seeking to capture more regional or global growth opportunities.”

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