Definition of Export: Definition, Purpose, Benefits, and Examples of Exports

What is meant by export ( export )? In the economic and business fields, the definition of export is a trade activity in which domestic goods and services are sold and shipped abroad with the aim of making a profit.

Another opinion said, the meaning of export is an economic activity in which the process of selling and sending a product (goods or services) from domestic to other countries in large quantities.

In general, export activities are carried out because domestic needs have been met and there are requests from other countries. The process of export activities must go through customs in the sending and receiving countries with terms and conditions that vary in each country.

Also read: Definition of Imports

Definition of Exports According to Experts

Some experts in economics and business have explained what exports are, including:

1. Marolop Tanjung

According to Marolop Tanjung (2011: 63), the definition of export is the release of goods from Indonesian customs areas to be sent abroad by following the applicable provisions, especially regarding customs regulations.

2. Amir M. S

According to Amir M. S (2004: 1), the notion of export is an effort to sell commodities in Indonesia to other countries, by expecting payment in foreign currencies, as well as making commodities using foreign languages.

3. Roselyn Hutabarat

According to Roselyn Hutabarat (1996: 306), the meaning of exports is trading activities by removing domestic goods from outside the Indonesian customs territory by fulfilling applicable regulations.

4. Bambang Triyoso and Susilo Utomo

According to Bambang Triyoso and Susilo Utomo (2004), the notion of export is a trading system by removing goods from domestic and abroad by fulfilling applicable regulations. Export activities include all goods and services sold by one country to another, including among goods, insurance and services for a certain period.

5. J. Winardi

According to J. Winardi, the meaning of exports is all products (goods and services) sold to residents of other countries, plus services provided to residents of these countries in the form of transportation of capital and other things that help export.

Also read: Understanding Logistics

General Export Purposes

Basically, export activities are based on the awareness that every country in the world can not be truly independent and need each other. A country exports its production to other countries that need certain products and cannot meet the needs of the goods.

The following are some export destinations carried out by a country or company:

  • To obtain profits or profits in the form of foreign exchange.
  • To get a higher selling price.
  • To penetrate or open new markets in other countries.
  • To create a conducive business and economic climate both nationally and globally.
  • To control the price of export products in the country.
  • To maintain the stability of foreign exchange rates against domestic currencies.

Also read: Definition of Distribution

Benefits of Exports in General

A country’s export activities are closely related to the level of economic growth in the country. The higher the export activity of a country, the better the investment climate and economic growth.

The following are some export benefits that can be obtained by a country:

  • Expanding the market of local products, Indonesia’s export activities are one way to increase the market share of domestic products.
  • Adding foreign exchange, transactions that occur in export activities will increase foreign exchange earnings so that state wealth will increase.
  • Opening jobs, export activities will also have an impact on the number of jobs for the community. Indonesian product exports to other countries will increase domestic production activities which certainly requires a lot of labor.

Also read: Definition of Infrastructure

Types of Exports

In practice, export activities can be divided into two types. According to N. Gregory Mankiw, export activities can be divided into two types, namely:

1. Direct Export

The definition of direct export is a way of selling a product (goods or services) with the help of an intermediary or exporter in the export destination country. In practice, sales occur through distributors or company sales representatives.

The advantage of this method is the centralized production process in the country of origin and good control in the distribution process. While its weaknesses are trade barriers and protectionism from export destination countries, as well as greater accommodation costs for large-scale production.

2. Indirect Exports

The definition of indirect export is how to sell goods through an intermediary / exporter in the country of origin, then sold by the intermediary. In practice, export activities are carried out through export management companies and export trading companies.

The advantage of this method is that production resources are concentrated and do not have to handle export activities directly. While the weakness is the lack of control and knowledge of operations in other countries.

Also read: Economic Growth

Example of Indonesian Export Products

Indonesia is one of the countries that often exports to other countries. The following are some examples of Indonesia’s export products to other countries:

No. Export Products Country of origin Country of destination
1 Palm oil, used to produce oil for cooking, fuel, and industrial oil. Indonesia India, China, Pakistan, Bangladesh, United States, Netherlands, Spain, Italy, Egypt, Malaysia (source: Katadata.co.id)
2 Textiles, including in the case of making fibers (upstream), weaving and dyeing (intermediate), and processing of apparel (downstream). Indonesia United States, Japan, Germany, China, South Korea, Australia, United Kingdom, Belgium, United Arab Emirates (source: Katadata.co.id)
3 Rubber, exports in the form of rubber latex (rubber), rubber sheet (sheet), chunks, crumb rubber (crump rubber), and derivative products. Indonesia United States, Japan, China, India, South Korea, Brazil, Canada, Germany, Belgium, Turkey (source: Katadata.co.id)
4 Cocoa, the exported products are cocoa beans, cocoa powder, and processed products. Indonesia United States, Malaysia, India, China, Philippines (source: Kumparan.com)
5 Coffee Beans, various variants of coffee from Indonesia are also well-known export products in various countries. Indonesia United States, Germany, Malaysia, Italy, Japan, Russia, Egypt, United Kingdom, Belgium, Canada

 

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