By Duncan Heron, VP, DHL Express UK
Over the last few years the UK’s SMEs have shown real resilience and adaptability as they flexed to accommodate challenging market conditions, regulatory changes and supply chain disruptions. And, despite the challenges, many still have ambitious growth plans and recognise the opportunities for expanding their reach and sales beyond the UK. For businesses thinking about taking their first steps into international markets, or for those wanting to grow into new ones, navigating the complexities of each market can seem daunting. With this in mind, tips to help avoid some of the most common pitfalls and smooth the path to successful international expansion.
Use the tools available to you
Smaller SMEs that want to explore international opportunities for the first time should consider starting via a marketplace. Users can decide where they’re willing to sell to but these borderless platforms provide access to many markets. In addition they provide the protection of upfront payments. As a business grows and gains knowledge and confidence with fulfilment of overseas sales, launching their own ecommerce site will become more accessible.
For businesses with established ecommerce sites, there are a number of tools widely available now that can help give a really in depth understanding of the potential growth markets. Online tracking tools can highlight where in the world website visitors are coming from, and if there are any potential areas for growth.
The extreme volatility of the last two years has been a cautionary tale from businesses that were overly reliant on a single sales market. The more markets a business is operating in, the smaller the ups and downs will seem, for example when exchange rates or economic outlooks differ for a particular country, so spread your risk with a presence in multiple countries.
Leverage experience from Brexit to go beyond Europe
Adapting to trading outside of the single market has brought its challenges, with Customs paperwork now required for trade between GB and the EU, but businesses who have been through it should feel confident to take that experience and be even more ambitious and global in their outlook. The knowledge they’ve gained will enable them to enter a non-EU market that might have previously felt too complicated. Businesses selling to France now have the experience to start selling to the US or India.
Know your markets
For SMEs particularly it is vital to try and understand the specifics of the export requirements to each new market you want to push into to make sure you can take advantage of any opportunities or softer targets. For example, the USA and Australia have high de minimis values, meaning the value of the goods below which no duties and taxes are collected is higher than elsewhere, making them relatively straightforward to export to and allowing goods to easily be competitive with those made locally. Conversely, in other markets with more complex tariffs on imports and duties and taxes, your product may no longer be competitive at the price you need to sell it at.
Likewise, understanding how your product will be received in each country will help you understand whether a market will be viable for you. For example, in countries with a large expat community, ‘home comfort’ products often sell incredibly well, so these will be markets worth exploring.
Show that you’re open for business
Once decided, it’s a good idea to make sure your shop window shows you’re open for business; a clearly visible banner on the home page will tell visitors from other countries right away that your goods are accessible to them.
According to our research 75% of internet users don’t make important purchasing decisions unless the product description is in a language they can speak and 98% of online shoppers prefer to pay in their local currency so it’s worth going that extra mile with translations, currency conversions or offering local payment platforms.
Demonstrate your sustainability creds
Sustainability remains absolutely crucial for the B2C market, and is growing in importance for the B2B market too, and shouldn’t be overlooked even by smaller businesses. Being clear not just about your ambitions for sustainability, but also what actions you are taking now, will be key to growing and retaining the customer base. In fact, Research shows that customers are more likely to be loyal to a company which supports environmental issues, which is a great opportunity for businesses to offer more sustainable shipping options.
Don’t try to do it alone
When it comes to building a successful international growth strategy, knowledge is power, and SMEs particularly can benefit from learning from the experience of their peers and the wider business community.
At DHL Express, we support our customers every day through website health checks, preparing shipping documentation and clearing goods through customs, providing tools to calculate duty and tax prior to moving goods across borders. With this support you have the confidence and capability to grow.