By William Gaviyau
International trade has been evolving rapidly in recent years, with new trends and challenges emerging all the time. In 2024 and beyond, it’s important to keep up with the latest developments undergoing marked transformation, especially if involved in global commerce or planning to enter new markets. This is fuelled by the challenging economic and geo-political environment, evolving commerce models, the rise of digitisation, the pivot towards sustainable business practices, and innovative approaches to financing among others. Below, are some of the most important trends in international trade and their implications for businesses.
Sustainability
Sustainability is no longer just a talk and ignore issue. Regulators, consumers, policymakers and industry bodies are demanding that companies adopt sustainable practices and reduce their carbon footprint. Failure to do so could result in companies being subjected to even tougher rules on sustainability.
Conscious consumerism has been on the rise, with people valuing ethical sourcing, fair trade practices, and environmentally friendly products. The demand for transparency and sustainability is driving businesses to adopt responsible practices and ensure their supply chains adhere to ethical standards.
The message is, act now, or else you will be required to do so on somebody else’s terms! This, trend is reflected in the rise of initiatives such as the United Nations Sustainable Development Goals, which aim to promote sustainable economic growth and social progress around the world. Additionally, this is not only good for our planet but also presents new opportunities for sustainable entrepreneurs.
For exporters from Zimbabwe and other businesses, sustainability presents both challenges and opportunities. On the one hand, it requires them to invest in new technologies and practices that can reduce their environmental impact and improve their social performance. On the other hand, it can also create new market opportunities, as consumers and businesses seek out sustainable products and services.
E-commerce driving global trade growth
One of the biggest trends in international trade is the rapid growth of e-commerce, which is transforming the way businesses buy and sell goods across borders. The global e-commerce sales are projected to reach US$4.9 trillion by 2025, up from US$3.5 trillion in 2019. This growth is being driven by factors such as rising consumer demand for online shopping, the increasing availability of internet access and mobile devices, and the expansion of digital payment systems. The largest players in the market are Alibaba and Amazon among others, with Amazon establishing its presence in South Africa this year.
Businesses are leveraging digital tools to streamline operations, enhance efficiency, and foster better customer experiences. For Zimbabwe exporters, e-commerce presents both opportunities and challenges. On the one hand, it allows them to reach new customers and expand their market share without the need for costly physical infrastructure. On the other hand, it requires them to adapt to new digital technologies, such as online marketplaces and payment systems, and to compete with other businesses from around the world. Also requires them to adapt to new technologies and develop new skills and capabilities, such as data analysis and cybersecurity.
Data privacy and cybersecurity
As companies become more reliant on digital technologies to conduct business across borders, the importance of data privacy and cybersecurity is increasing. There have been many high-profile data breaches and cyberattacks, which have resulted in the loss of sensitive data and damage to company reputations.
To mitigate the risks of data breaches and cyberattacks, businesses need to invest in cybersecurity measures, such as firewalls, encryption, and employee training. They also need to comply with data privacy regulations, such as the European Union’s General Data Protection Regulation (GDPR), which requires companies to protect the personal data of EU citizens. In South Africa, they have the Protection of Personal Information Act (POPI Act), which governs data protection and privacy in South Africa.
For Zimbabwe businesses, this trend requires compliance with the target export market`s relevant data protection and privacy regulations to mitigate against the associated risks.
Trade in Services
While goods have traditionally dominated international trade, the importance of services is rapidly growing as a means to both respond to domestic supply shortages and export diversification. Digital services, such as software development, graphic design, and consulting, can now be exported globally effortlessly. Furthermore, the COVID-19 pandemic has expedited the growth of remote work, making service exports even more significant in the future.
There is also a shift in favour of services as they become an increasingly important part of global trade over the next decade, with trade in services growing 60 per cent faster than the trade in goods in the past decade and now accounting for US$5.1 trillion out of the US$17.3 trillion which makes up global trade. Any country can tap into the trade potential of services, but not every country can become a services hub across sectors.
Regional Trading Blocs
The world has witnessed an increase in the formation of regional trading blocs, such as the European Union and the African Continental Free Trade Area. These agreements foster regional integration, increase market access, and streamline trade processes. As more countries come together for economic cooperation, the dynamics of international trade are likely to be reshaped.
With this positive economic development, there has been a growing backlash against globalization and free trade, as some countries seek to protect their domestic industries and jobs from foreign competition. This has led to the imposition of non-tariff barriers, such as restrictive requirements, which can make it harder for businesses to export their products and compete in foreign markets.
To navigate this trend, businesses need to stay informed about the latest trade policies and regulations and develop strategies that can help them mitigate the risks of free trade. This may involve diversifying their supply chains, investing in new markets, or partnering with local businesses to gain a foothold in foreign markets.
In conclusion, international trade is a complex and dynamic field that is constantly evolving. By staying abreast of the latest trends and challenges, businesses in Zimbabwe can develop strategies that enable them to compete in the global marketplace and seize new opportunities.
