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Figures from the Department of International Trade show that UK exports rose to £620.2 billion in March 2018 – a record high. It’s also estimated that 400,000 more UK brands and small business have the potential to export.
The government is keen to exploit this and has declared its desire to transform the UK into a “21st century exporting superpower”, especially post-Brexit when trade with the EU will become uncertain. This new strategy could boost total exports to 35 per cent as a proportion of GDP and, if successful, grow the UK’s economy.
Exporting to a new market requires a significant initial outlay of time, effort, internal resources and investment, so it’s crucial to research the market thoroughly before you commit to prevent costly mistakes.
Firstly, consider where there’s a demand for your product. Do your research on the regions where exports of your goods are on the up and where the political and financial landscape indicates that it’s likely to continue. For example, heavy industrial products are valued across emerging markets such as India, Thailand and Cambodia due to large infrastructure projects and a lack of their own heavy industry manufacturing.
Where have your competitors been successful in exporting similar products to? Study the Department for International Trade’s figures to see where there’s a growing demand for products within your sector. Then conduct in-depth research into issues such as the local culture, legal regulations, language barriers, the local network of individuals and organisations you’ll need to work with and the PR and marketing activity required. This will help you work out a realistic timeframe as well as the costs of entry.
You’ll then need to look at your manufacturing processes and see if these need to be changed in order to meet with increased demand. Consider your logistics, too: how will you physically transport goods to your new global marketplace?
Look at whether you want to use a local partner to handle distribution, or if it would be better to create a working relationship directly with distributors and retailers in your target country. If you choose the latter, you’ll also need to think about any language and cultural barriers you may come up against.
The intellectual property structure of each country varies hugely, so begin the necessary registration formalities as quickly as you can – it can take years in some Asian countries. This must all be in place before you can begin exporting your goods.
As some markets favour their national companies over foreign ones, it can be better to work with a local partner to support your exports. Before you enter into any agreements with such partners, carry out thorough background research and then set up clear and enforceable paperwork and responsibilities.
Setting up trade credit insurance is vital, as the average credit period and rates for importers or distributors on payment of goods varies globally. Each country also has a unique tax structure and payment methods, so you’ll need to consult a tax professional to make sure you calculate all this correctly.
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