By Maggie Choo, Director at Alibaba.com EMEA
Setting up an exporting arm can be a profitable way of expanding your business, helping to spread risk and reduce dependence on the local market. Advances in technology have opened up a host of new export opportunities for UK businesses. Today, businesses are able to identify, connect and do business with companies that would have been far beyond reach just 10 years ago.
What’s more, from an economic perspective, now is the right time to embrace international trade. The Chancellor’s emergency budget earlier this year favoured exports and showed them to be of increasing benefit to the country’s economy. Although current import growth still outweighs exports, as the recovery in UK export markets strengthens and sterling’s past depreciation boosts UK export volumes, net trade is forecast to contribute positively to the UK’s growth. As a business category, export markets for UK goods are getting bigger and stronger as each month passes.
Large multi-site, multi-national businesses are already at home operating on the world stage. This, however, is not the reality for small to medium sized enterprises, many of whom may have little or no previous experience in overseas trading. A UK wide survey by Alibaba.com highlighted that 80% of small and medium sized businesses are failing to embrace the international business space with over one quarter (26%) incorrectly considering themselves too small to trade with partners from outside the UK. Small businesses still cite cultural and language barriers as the main inhibitors to their potential overseas trading success. These fears are outdated and inaccurate. As with all business strategies there is an element of necessary risk associated with exporting, but one which can be minimised by employing a level headed, thorough approach and an adherence to best-practice at every opportunity.
The truth is that the internet has shrunk the trading world and made it easier to do business regardless of cultural origin and native language, and export opportunities have never been more abundant or varied for businesses large and small.
By embracing international trade, producers of goods and services can move beyond the UK market, and take advantage of the 6.2 billion strong world market. Globalisation and increasing competition means that all businesses must look to diversify their marketplace to ensure long term growth. In fact, for many small companies, importing and exporting is becoming an essential cornerstone in achieving success.
Although it requires the development of skills and knowledge beyond those required to operate a domestic business there is a host of information and support available. UK Trade & Investment run courses to help companies assess whether exporting is a viable business option. It also offers supporting grants for businesses looking to establish a presence overseas. But interested businesses don’t even need to go that far. Global e-commerce platforms, like Alibaba.com, have transformed global trading practices by putting businesses in immediate contact with a world of buyers in every conceivable business sector. In just a few easy clicks, businesses can easily dip their toe in the export market to test the water with minimal resources and no initial investment at all.
What is important is that businesses research overseas markets before they start to market, promote and sell their products or services. Every overseas market is different and success lies in a clear understanding of the market. Although the fast growing emerging economies of Brazil, Russia, India and China are clear drivers of global commerce and could potentially offer a myriad of opportunities, businesses should also look closer to home and acknowledge important trade partners in Europe. For example, earlier this year David Cameron announced that Turkey was vital for the UK's economy, security and diplomacy and called for a step change in trade links between Britain and Turkey, setting out a target to double their value over the next five years.
As our economy continues to recover it is more essential than ever before that the Government supports businesses in drumming up new overseas deals with more focus on trading with countries such as Turkey and winning orders for British business overseas, attracting inward investment back into Britain.
No company is too small to take advantage of the global market — all can benefit by selling to an increased customer base. With austere times ahead it would be naive to think that the UK’s economic recovery is a given. Small businesses must focus on generating new revenue stream, delivering growth and creating jobs if they are to fulfill their important role in driving a lasting economic recovery. Embracing international trading and making a success in export markets is a clear way of doing just that.
For more information about Alibaba.com visit www.alibaba.com.