Small online retailers in the UK are looking beyond Europe to new overseas markets to increase their exports this year, according to a study from Royal Mail.
In general, international confidence is high among the UK’s small online retailers with over half (56%) of the 300 survey respondents aiming to increase international sales in both new and existing markets in 2016, according to Royal Mail’s annual tracker study into their ambitions.
Australasia has seen the most significant increase in interest as an export destination with 23% of small online retailers believing it holds the greatest opportunity for export sales growth, compared to just 5% last year. 20% plan to target the region in 2016 compared to just 7% last year. Asia has also increased in importance as an export destination; 26% believe it holds significant sales opportunities, up from 12% last year.
Europe remains the main target for exports: nearly half (48%) of SME retailers are aiming to sell their products in the Eurozone in 2016. This compares to just a third last year (30%). Meanwhile the USA is seen to present the greatest opportunity for UK small online retailers in the next five years by 30% of SMEs interviewed.
UK small online retailers are targeting new markets to capitalise on growing international demand for British products and services. 42% cite this as the primary reason for their expansion plans followed by 35% who said they based their export plans on how easy it was to ship and deliver to those markets.
Of those who sell overseas, nearly two thirds (57%) actively promote their international delivery service to attract foreign customers. A third only offer international delivery options at check-out and do not advertise beyond that, while another 10% will offer international delivery only if specifically asked.
When asked about their favoured international carrier, three in five (63%) said they used Royal Mail and Parcelforce Worldwide as their main carrier.
A lack of knowledge of international markets remains the main barrier to further export activity, holding back nearly 40%. However the complexity of shipping to international markets also deterred around a quarter (23%) of small online retailers from exporting.
To help UK SMEs break the barriers to exporting to China, Royal Mail last year announced the launch of its shop front on Alibaba’s e-marketplace, Tmall Global. Royal Mail’s Tmall Global site offers British retailers the opportunity to access the Chinese market while removing the logistical challenges that many companies would otherwise face. These can include the cost and complexity of accessing Chinese e-commerce sites, the challenge of providing local customer support service, as well as managing customs duties, documentation, shipping and logistics.
Richard Snowdon, Royal Mail’s International Director said: “Royal Mail’s annual tracker of small online retailers shows that there is a huge appetite for exporting among UK small businesses. But it also shows that over a third could be missing out on sales by not actively promoting their international capabilities to encourage foreign custom. We believe that 2016 could be the year that exporting becomes big business for small online retailers in the UK and we have a range of international delivery options designed to make this process as simple as possible.”
UKTI Chief Executive, Dr Catherine Raines, said: “We know that companies that export are more profitable, more productive and more innovative so I am delighted that over half of UK online SMEs are looking to increase their international trade in 2016. Our Exporting is GREAT campaign supports British businesses to trade overseas by helping them access real-time global export opportunities. The demand for British goods and services is out there, and we are delighted to work with partners like Royal Mail to ensure UK companies are supported on every step of their export journey.”
