Three experts give their views on international trade, covering topics ranging from the most popular export markets to the importance of visiting trade shows.
A recent Confederation of British Industry survey shows SMEs that export are 11 per cent more likely to survive than those that don’t, with a separate UKTI study showing that those who do are 34 per cent more productive.
The research shows Europe is still the biggest export market among UK SMEs (79 per cent target EU), followed by USA (40 per cent), then the BRIC countries (Brazil, Russia, India and China) with 24 per cent exporting there. America is particularly high among manufacturers – over half (51 per cent) of those who took part now export to North America.
Peter Woodd, CEO at IDT Systems, a systems provider delivering 3D and 2D surface decoration solutions, says his business started exporting because the company’s technology can be sold on to businesses at the point of distribution.
‘We are in the mobile accessories business, so we go out to markets in developed and developing countries that use mobile accessories. IDT Systems has a wide outreach in South East Asia, Europe, the United States, Canada and South America, and are in the final stages of closing a deal in Africa,’ he adds.
The company exports 95 per cent of production globally to 54 countries with an annual turnover of £6 million.
Approaching international trade
But what are the key things to consider when approaching export trade? Woodd says, ‘When going into international markets, businesses need to be aware of the different cultures, but also remember to be present in them and not just active.
‘The number one thing that should be done is to communicate the value of the joint venture or strategic alliance. The only way to develop sales overseas is to partner and you can find partners by being there, in the marketplace and at a trade fair. Take the small stand option. Speak to people. It should be an exciting adventure and not seen as a challenge.’
Woodd says that there needs to be more efficient communication of the benefits of exporting to businesses in the UK.
‘If businesses aren’t exporting, sales opportunities are naturally limited. Exporting is not as difficult as you might think. It’s only the unknown that’s challenging, but you just have to go for it and do it.’
At almost every international trade show, there is a UK contingent who you can speak to who will be able to give your business plenty of support and advice, Woodd continues. ‘They are the ones who will be able to introduce you to the right commercial organisation for your business and find that partner.’
Richard Currie, director of public affairs at UPS argues that companies involved in international trade are better for the economy.
‘During a downturn, small businesses – or large – focus on cost-cutting and tasks that are vital to day-to-day survival. But the most resilient businesses strike a balance between navigating current storms and developing strategies for growth,’ he says.
‘In any economy, new geographic markets offer businesses opportunities to create new revenue streams – and studies reveal businesses that export are more productive and employ more people.’
A time for British exports
With growing business opportunities across the globe and a heightened focus on the UK as a global centre for business and a key trading partner, never has there been a more important time for UK business to make its mark on the international marketplace, Currie continues.
‘British businesses have the opportunity to capitalise on the rapidly expanding economies of the emerging nations. But until now, the potential for UK companies to export their products to these markets has remained untapped.’
To be successful in international markets, UK companies must break down the barriers that have been holding back their export efforts, says Currie.
‘And it can be done. By working with trusted logistics partners on the ground, reaching out to organisations such as UKTI and LCCI and taking advantage of the resources that are available, businesses of any size can develop truly global supply chains to help smooth their entry into distant new markets.’
If a business is to take advantage of these opportunities, it’s first advisable that they study the current trade trends. By paying close attention to countries that are showing an increase in imports they can make sure the trend is consistent, and not just a one-off surge.
Currie explains that ‘At UPS we have a dedicated page on our website where visitors can get information on the fast-growing international markets, as well as everything else they might need to know to ship with confidence.’
Next, businesses need consider and plan for their target market’s domestic infrastructure, beyond just the transport route to the country itself. This is where a third party supply chain expert can help plan how long it will take to get your products from the factory to the shop floor.
Currie also recommends developing a robust pricing strategy that will cover any additional costs such as import duties, taxes and fees, and making sure the workforce in place has the skills required to make the transition a success.
‘Remember, the number of consumers with a disposable income is growing rapidly around the world, especially in new, emerging markets. The resulting demand for premium products have the potential to give UK businesses, with their reputation for quality, a competitive edge over other exporting markets. We need to make the most of it!’ Currie concludes.
Lucy Fox, general manager of cloud Solutions at software company Exact says that While exporting is not an option for all, it does present huge opportunities for those who can do it.
‘Just like tackling the domestic market, SMEs who are considering exporting their goods or services should plan for any international presence. They need to ensure they analyse their target marketplace and competitors thoroughly, that they understand the business and financial implications of selling overseas and set appropriate goals accordingly,’ she says.
‘Selling to new markets can help grow revenue streams and generate new jobs, as well as diversify risk in case of adverse economic conditions.’