New research reveals that small and medium sized British businesses are increasingly turning to international markets against a backdrop of difficult domestic financial conditions. According to a survey by DHL Express, nearly two thirds (60%) of exporters said they plan to grow sales internationally over the next year, with over half (55%) stating that economic conditions in the UK affected how much their business exports to international markets. Only one in 10 said they don’t plan to grow their exports.
This suggests that for the UK, trade deals have taken on new significance in the aftermath of Brexit, with agreements offering a way for UK SMEs to diversify their revenue streams and thrive in an increasingly competitive market. The general mood among exporters is positive, with 83% of exporters feeling confident about expanding into other markets, with the top five target markets being:
- Hong Kong
Of the SMEs aware of the UK’s new Free Trade Agreements (FTA’s) such as the ones with Singapore and Australia, over half (52%) are planning to grow exports in the new markets.
Despite the growing confidence among small business exporters, some challenges remain. The top three barriers to growing business through exporting were identified as; new costs post-Brexit such as custom charges, understanding the regulations and customs of each market, and undertaking the paperwork and logistics required to export. However, many of these issues can be reduced or removed under an FTA.
The research also explored the ways in which small businesses are seeking out international sales and revealed that social commerce is opening doors. While currently only a small proportion of businesses are selling overseas via social commerce platforms – such as Instagram Live Shopping and Tik Tok Shopping – this looks set to grow, with the research indicating that soon one in four businesses will be leveraging these platforms for global transactions.
Ian Wilson, Chief Executive at DHL Express UK said: “Despite the ongoing backdrop of economic turbulence, it’s positive to see that small businesses are showing such resilience by looking for other opportunities to grow profits. The opportunities presented by new trade deals to smooth the path for exports, as well as the power of social media to enable these businesses to become global brands, is really exciting.
“For any uncertainty or concerns around the challenges of exporting internationally, businesses can be reassured that working with a trusted logistics partner will be able to provide the insight and expertise needed to succeed. We hope to see more trade deals in the years to come and will continue to support our small business customers along the way.”