The majority of small and medium-sized businesses across major European markets are missing out on the financial benefits of exporting, and are losing out on estimated average additional revenues of €647,000 a year, a recent FedEx study revealed.
Conducted by Harris Interactive and commissioned by FedEx Express, the European SME Export Report surveyed over 2,000 senior executives in SMEs in four EU markets, France, Germany, Italy and Spain. It showed that more than 6 out of 10 (62%) SMEs are currently not exporting even though over three quarters (78%) recognise the potential of international markets and customers.
According to the study, the exporting SMEs seem to be reaping significant financial benefits from their international activities. Thus, fast-growing SMEs recording 11% growth or more are twice as likely to export compared to SMEs that experience no growth or even a decline in revenue terms. The exporting SMEs are also more optimistic about their revenue prospects over the next 12 months, with 60% expecting growth compared to 48% of non-exporting SMEs.
While most SMEs expect more growth in international than domestic revenue, only 23% across the four EU markets have strong ambitions to grow their international base. In line with this, the SME export market growth is projected to be steady, with 50% of European SMEs anticipated to export in five years’ time compared with 38% today, rising only to 55% in a decade.
David Binks, President Europe, FedEx Express, commented: “Our research shows that SMEs across Europe are missing out on additional revenue, lacking in confidence to think beyond their own country borders, largely because they perceive the barriers of trading internationally to be too great. Many are reluctant to explore lucrative export opportunities because they are concerned about the practicalities of ensuring they get paid and handling queries and returns without a presence in-market as well as lacking technical know-how around legal processes such as customs procedures.”
While small and medium-sized businesses are widely acknowledged as having a major role in driving growth, opening new markets and job creation, the report highlights clear differences between the individual markets. For example, exports are something common in Spain where almost half (47%) of SMEs are internationally active, followed by 41% in Italy. French and German SMEs, however, show lower exporting levels at 32% and 31% respectively.
In Germany, the internationally active SMEs (31%) export within Europe, especially focusing on the neighbouring countries Austria, Switzerland and France, followed by the Netherlands and Belgium. More than half (59%) of the companies also export to the markets beyond Europe, which is far lower than the corresponding share in the other markets surveyed.
Thomas Preuss, Managing Director Sales at FedEx Express Germany, said: “Our research shows that SMEs in Germany miss out on additional revenue as they perceive the barriers of international trade to be too big. At FedEx, we are working with SMEs to eliminate these barriers. With our Online Small Business Centres and access to more than 3,000 global trade experts in our network, who can share their experience in terms of customs regulations, documentation and packaging, we make it easy for SMEs to make business on the international terrain.”
In France, the majority (94%) of the exporting SMEs (32%) export in Europe, especially to the major European markets including Germany, Italy, Spain and Switzerland, followed by their close neighbours – the UK, Belgium and the Netherlands. 68% export beyond Europe, with the Unites States ranging at the top, ahead of China.
In regional terms, the SMEs in Eastern France export more than those from the other regions, including the Paris metropolitan area, with 37% in the north-east and 35% in the south-east, compared to only 33% in Paris, 32% in north-west and 23% in the south-east of the country.
When asked about their trump cards in exporting, the French SMEs first cited the product quality (57%), innovation (40%) and the positive image of the French economy (34%).
