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Data Analysis21

Britain’s digital businesses vital in quest to hit trade targets

New research released by eBay has revealed that the continued growth of Britain’s digital small businesses will be vital to the Government reaching its trade target of £1 trillion exports by 2020.

Data contained in eBay’s Small Business Exports Index shows that of the 200,000 small digital firms trading on its UK marketplace:

 

  • 93% fulfilled overseas sales in 2015, with each exporting to an average of 20 different territories
  • This compares to just 28% of businesses without an online presence
  • These British online businesses have an annual growth rate of 12 per cent

 

Chancellor George Osborne laid out his trade target at the 2012 Budget, but the latest ONS data puts UK exports at £515bn in 2015.

eBay’s study found that small digital businesses are keen to tap into global trade routes beyond the continent; as 52% see “lands of opportunity” rather than risk in new markets. But businesses are currently avoiding an over-reliance on Europe as an exports hub; only one in three (32%) small digital firms consider Europe to be a key market.

The top five most popular destinations for British exports via eBay are to the United States and Australia, followed by European countries like Germany, France and Italy.’

The Index also found that an expansion of overseas trade features in 13% of small digital business’s 2016 strategies, with two thirds pinning growth targets on successful foreign sales.

 

Kit Glover, Director of Professional Selling & Cross Border Trade at eBay said:

“More small online businesses are expanding into new markets with increasing vigor and we’re seeing growing numbers of micro-multinational businesses emerging. These are agile businesses capable of selling to a global audience, without the infrastructure of a traditional exporter.

This creates a domino effect of job creation across different sectors, from manufacturing and services to procure more products, to logistics and delivery firms shipping more goods. This is good news for small business, and good news for Britain.”

Recent success stories include Oliver Margasson, owner of electrical goods specialists Electrolve, which exports to 127 markets from its headquarters in Grimsby, North Lincolnshire. Margasson said:

“Operating from our Grimsby warehouse, the business benefits from strong transport links and courier services; the kind of agile infrastructure from which we can quickly source and sell our products internationally.  With consumers around the world getting wealthier, and governments investing in better internet access, our international trade has grown to account for 60% of total sales.”

Despite many success stories, small business owners are also calling for more Government support to make exporting abroad easier. Two thirds (63 per cent) want more help than is currently provided, while one in four (27 per cent) are put off exporting due to delivery and logistical challenges, and a further one in ten (13 per cent) by language barriers.

 

Lesley Batchelor, Director General of the Institute of Export, said: ‘Many small businesses are often put off from exporting by difficulties ranging from tariff codes to cultural issues and language barriers. But to realise the Government’s ambitious target of £1 trillion exports by 2020, many more small and medium size businesses in Britain need to start selling their wares abroad.

That’s why we’ve set up Open to Export, a government-backed scheme that aims to make the process as easy as possible for British entrepreneurs. I’m optimistic that with a little help, our small businesses can help the UK grow into a true export powerhouse. To paraphrase Einstein, first we need to learn the rules of the export game, and then we can go out and play it better than anyone else.’

 

Kit Glover’s top-tips for small online retailers exporting overseas:

 

  1. Take advantage of cool Britannia

The UK has an excellent reputation around the world when it comes to retail. UK brands and businesses are held in high esteem, so use this to your advantage. Make it clear where you’re based and capitalise on selling the best of British – for example, British fashion is in particular demand.

 

  1. Streamline payment

Distance is no object with globalised exporting, but if customers can’t pay for their goods easily, they won’t buy from you. Make sure you accept international payment methods such as credit cards and payment platforms like PayPal.

 

  1. Be ship-shape

Consumers are looking for speedy delivery (10-14 days), low cost, and reliable shipping services. eBay sellers can enroll for free into the Global Shipping Programme; international postage charges and any applicable customs charges are automatically shown on listings, and paid by buyers.  Parcels can simply be posted to the UK Shipping Centre using your usual postage service along with a tracking code, and parcels can then be tracked by both buyer and seller.

 

  1. Leverage language

In the European market, language translation and local online platforms are key to engaging foreign audiences. eBay’s International Growth Programme, in partnership with translation service WebInterpret, is one way to translate listings into other languages.  While shared languages, such as the US, Australia and Canada make entering these markets easier, remember to consider how consumers abroad search for your products – replace colour with color, for example.

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