According to the ICE Report, worldwide export figures fell by 7% in 2020, and the global economy is projected to rebound in 2021 by 7.6%, with consolidation expected at around 5.3% in 2022. In Confindustria’s estimates, 2020 recorded an overall decrease in Italian exports of 9.7%, marking the worst result since 2009. International trade has suffered the consequences of COVID-19 and, now, there is hope for a new shift in international exports after the years following that global crisis, where digitalization, sustainability and innovation will be the characterizing features.
Obviously not everything will be the same as before. The forecasts of economic recovery are linked to the pandemic trend, and the global implementation of vaccination programmes is a necessary condition for overcoming the health emergency.
The international context is undergoing radical and increasingly rapid change. In Asia, after eight years of negotiations, the world’s largest free trade pact was signed, the Regional Comprehensive Economic Partnership (RCEP), which involves the 10 economies of ASEAN as well as China, Japan, South Korea, Australia and New Zealand. Once in force, the agreement will eliminate customs duties for 65% of the goods shipped in the area (prospectively up to 90%) and make a decisive contribution to the development of local value chains.
Almost a third of the world’s population lives in the region, accounting for 30% of global GDP and contributing to global trade with a share of €9,300 billion. The signatory countries make up 8% of Italian exports.
Today, Italy is the eighth world exporter, with 2.9% of global exports. The destination areas see Europe firmly in the lead, and represent 67% of our cross-border traffic (€292 billion), followed by the Americas and Asia with almost equivalent values (around €58 billion). The presence of Italian companies in Europe is distributed for 19% in France, 18% in Spain, 17% in Germany, 13% in the United Kingdom, 11% in Northern Europe, 10% in Switzerland). In 2021, the outlook for Made in Italy products offers promising prospects for the food sector (+8.5%), furnishing (+8.4), electronics (8.2%), engineering (+6.8%) and fashion (+6.7%).
Digital innovation cannot be understood as a catchword valid at all times and at all latitudes. There are precise reasons not only to justify it, but to regard it as indispensable.
Until now, a large part of the national export was aimed at professional mediators (importers, distributors, wholesalers, and for some brands individual retailers) who bought to resell at a profit on the local market. Not many Italian labels boasted a direct presence across the border. Now, however, with the increasing digitalization of commercial trade, intermediation is decreasing, while direct contact with the end customer is growing.
Before the pandemic, in-person events were for Italian companies the effective means of promotion and distribution. However, the restrictions of the last eighteen months have accelerated and consolidated the verticalization process, namely the direct sale to an increasingly demanding consumer whose expectations are changing rapidly. It is unthinkable to consider offering innovative solutions to the market without an adequate presence and operational efficiency on e-commerce and social networks, and without valid information systems to support each process involved in the internationalization of the business.
Additionally, both the management and relations with existing and acquired customers go through digital platforms on specialized B2B marketplaces, or in one-to-one video meeting mode. To take two examples: at the beginning of 2021, Microsoft Teams had 115 million active users on an average day, 53% more than the year before. In Q4 of 2020, Zoom increased by nearly fivefold the number of customers with more than ten employees compared to the same quarter of 2019, multiplying its revenues by three and a half times.
The incidence of cross-border purchases is very high in Russia (74% of total e-commerce sales), in Northern European countries (30-45%) and in the United Kingdom (33%). In Europe, 18% of online purchases is made on European websites, but not of the own country. There is however an important point to be made: in Europe, as in the United States and Japan, the growth of digital commerce occurs in markets with zero or almost zero growth, with increased volumes and impact on national retail at the expense of traditional distribution channels.
Instead, in China and in countries that show a rising trend of newcomers with high spending capacities, the growth in consumption passes through e-commerce, considered the most important purchasing venue of choice, resulting in additional sales to those of the physical distribution, with much higher impact values. While China and India remain the obligatory destinations for Italian exports, they are joined by a number of other high-potential countries such as Indonesia, Turkey, Iran and the Gulf countries.
In 2020, B2C e-commerce worldwide was worth about $4.3 billion, almost 28% more than the previous year. In 2021, it is expected to grow by a further 14% and hit $4,891 billion. To date, it represents 18% of total retail sales, compared to 13.6% in 2019; a positive result considering that retail sales suffered an average global fall of 3%.
The Asia-Pacific region firmly holds the leadership of online shopping with 63% of the world share. Looking at the impact of B2C e-commerce sales on the total retail market, China is at the top of the world ranking, with a 44% share. Then follows South Korea with 29%, the UK 28%, Denmark 19%, Norway 18%, and the United States 15%. In terms of per capita expenditure of e-shoppers, there are 3.5 billion consumers in the world who buy online, spending an average of $703 per person per year.
In Italy, according to estimates by the Polytechnic University of Milan’s Observatory, the share of e-commerce sales on total retail is 8% and, in terms of per capita expenditure, our country is below the world average, with an annual expenditure per consumer of $619.
In this scenario, in order to ensure that Italian exports can excel on the international stage, technological consistency and continuity between the ‘inside’ and ‘outside’ world are indispensable. The bottom line is this: for obtaining what is desired from the outside, there is the need to work on the inside by accelerating every aspect of the digital transformation, as out there no one is waiting for us.
ICE report, April 2021
Confindustria, “Exporting the dolce vita”, July 2021
Ministry for Foreign Affairs, Import/Export Observatory, July 2021
Casaleggio & Associati, E-commerce report 2021
Polytechnic University of Milan’s B2C E-commerce Observatory