CN 07/17/19

Beijing

New research commissioned by UPS into Asian industrial buyers finds that despite growth in online business purchases, traditional offline relationships, face-to-face interactions and post-sales support weigh more heavily in purchasing decisions here than in other regions

UPS (NYSE:UPS) today released the results of its 2019 UPS Industrial Buying Dynamics Asia Pacific study, which finds B2B buyers here in the region are doing much of their purchasing online, and at the same time relying heavily on offline relationships and seeking out solid after-sales service. The study, which surveyed 600 industrial purchasers in companies across China, Japan, and Thailand, offers valuable 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 that want to sell in this region,” said Sylvie Van Den Kerkhof, Vice President of Marketing, 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.

Shifting Procurement Models
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 percent) than buyers in both China and Thailand (both at 14 percent). 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.

Sourcing Goes International
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 percent in the U.S. and 64 percent in Europe. However, there is one outlier in the region: Japan, where buyers source 90 percent 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 percent), customs delays (55 percent), and issues with returns (45 percent).

Post-Sales Services Secure the Customer Experience
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.

“Small- and medium-sized enterprises play a central role in supporting the Chinese market1, and industrial manufacturing SMEs account for 97.62 percent of the industry segment.” said Harld Peters, President, UPS China. “The growing preference for online B2B purchasing in Asia provides more opportunities for Chinese industrial SMEs to deepen their presence across the region. A standout differentiator revealed in the study, is the ability to provide clear and responsive post-sales service capabilities. UPS’s Smart Logistics Network, recent service enhancements and customs clearance capabilities place us in a strong position to enable Chinese industrial SMEs to deal with the demands or a changing manufacturing industry.”

About the UPS Industrial Buying Dynamics Study™

The 2019 study conducted by Burke, Inc. on behalf of UPS, is based on a survey of more than 3,100 respondents globally – including 600 in Asia – who purchase industrial parts, products, or supplies for use in 15 industries.

About UPS

UPS (NYSE: UPS) is a global leader in logistics, offering a broad range of solutions including transporting packages and freight; facilitating international trade, and deploying advanced technology to more efficiently manage the world of business. Headquartered in Atlanta, UPS serves more than 220 countries and territories worldwide. The company can be found on the web at ups.com or pressroom.ups.com and its corporate blog can be found at longitudes.ups.com. To get UPS news direct, follow @UPS_Asia on Twitter, UPS 中国动态 on WeChat, and UPS官方微博 on Sina Weibo.

1 http://www.xinhuanet.com/fortune/2019-01/29/c_1210050412.htm

2 China National Bureau of Statistics

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