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 trading activity in which domestic goods and services are sold and sent abroad for the purpose of obtaining profit.

Another opinion said that the meaning of export is an economic activity in which there is a process of selling and sending a product (goods or services) from within the country to another country 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 of the goods with different terms and conditions in each country.

Also read: Definition of Import

Understanding Export According to Experts

Several experts in the field of economics and business have explained what export is, including:

  1. Marolop Tanjung

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

  1. Amir M. S

According to Amir M. S (2004: 1), the definition of export is an effort to sell commodities in Indonesia to other countries, by expecting payments in foreign currency, as well as making commodities in a foreign language.

  1. Roselyn Hutabarat

According to Roselyn Hutabarat (1996: 306), the meaning of export is a trading activity by means of removing goods from within the country outside the Indonesian customs area in compliance with applicable regulations.

  1. Bambang Triyoso and Susilo Utomo

According to Bambang Triyoso and Susilo Utomo (2004), the definition of export is a trading system by way of removing goods from within the country to abroad in compliance with applicable regulations. Export activities include all goods and services sold by a country to another country, including goods, insurance, and services for a certain period.

  1. J. Winardi

According to J. Winardi, the definition of export is all products (goods and services) that are sold to residents of other countries, plus services provided to residents of that State in the form of transportation of capital and other things that support the export.

Also read: Understanding Logistics

General Export Destinations

Basically, export activities are based on the awareness that no country in the world can truly be independent and need one another. A country exports its products to other countries that need certain products and cannot fulfill the need for these goods.

The following are some of the export destinations made by a country or company:

  • To get a profit or profit 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 domestic export product prices.
  • To maintain the stability of foreign exchange rates against domestic currencies.

Also read: Understanding Distribution

General Export Benefits

The export activities of a country are closely related to the level of economic growth in that country. The higher the export activity of a country, the better the investment climate and economic growth will be.

The following are some of the benefits of exports that can be obtained by a country:

  • Expanding the market for 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 the country’s foreign exchange earnings so that the country’s wealth will increase.
  • Opening up employment opportunities, export activities will also have an impact on the number of jobs for the community. Exports of Indonesian products to other countries will increase domestic production activities which of course require a lot of labor.

Also read: Understanding Infrastructure

Types of Exports

In its implementation, 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 advantages of this method are a centralized production process in the country of origin and good control in the distribution process. While the weaknesses are the existence of trade barriers and protectionism from export destination countries, as well as higher accommodation costs for large-scale production.

  1. Indirect Export

The definition of indirect export is a method of selling 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.

Read also: Economic Growth

Examples of Indonesian Export Products

Indonesia is one of the countries that frequently exports to other countries. The following are some examples of Indonesian export products to other countries:

No. Export Products Country of origin Country of destination
1 Palm oil is used to produce cooking oil, fuel and industrial oil. Indonesia India, China, Pakistan, Bangladesh, United States, Netherlands, Spain, Italy, Egypt, Malaysia (source: Katadata.co.id)
2 Textiles, including in terms of fiber manufacturing (upstream), weaving and dyeing (medium), 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 (latex), rubber sheets (sheet), chunks, crump rubber, and its derivative products. Indonesia United States, Japan, China, India, South Korea, Brazil, Canada, Germany, Belgium, Turkey (source: Katadata.co.id)
4 Cocoa, the products exported are cocoa beans, cocoa powder, and their 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, UK, Belgium, Canada (source: Katadata.co.id)

Also read: Supply Chain Management

This is a brief explanation of the meaning of exports, the purpose, benefits, and some examples of export activities carried out by Indonesia to other countries. Hopefully this article is useful and adds to your insight.

 

 

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