In search of new customers? Why UK businesses are expanding their horizons

New research from the Spring 2019 Santander Trade Barometer shows that British businesses are willing to look outside Europe for new trading opportunities. But they face important challenges that range from dealing with red tape to identifying the best routes to market.

British businesses are shrugging off current domestic uncertainty and preparing to scour the globe for new customers, our research indicates. Naturally, whatever future trading relationship is eventually negotiated with the EU, the bloc will remain a vitally important market for UK businesses. But our latest Trade Barometer statistics show there is now a significant willingness to seek new growth opportunities outside of Europe. Asked what plans they are making to deal with life after Brexit, a third of businesses (32%) in our survey say they are looking beyond Europe for new customers. This is now the second most popular form of Brexit contingency planning, up sharply from ninth place in the previous Winter 2018 edition.

Global potential

Among businesses that don’t currently trade internationally but which expect to expand abroad at some point over the next 12 months, the rate is considerably higher. 58% of this group intend to seek new business outside the EU in response to the current political and economic uncertainty. Among businesses that already trade overseas, North America is the single region where future growth potential is seen to be highest (cited by 19% of respondents). But almost as many companies – 17% – expect Asia-Pacific, which includes potentially valuable markets such as China, Japan and Australia, to deliver the most growth over the next three years. Some 14% of businesses expect the eurozone to generate the largest share of their international growth over this period. As for individual countries, 31% of current international businesses say they expect future growth to be delivered by operations in the United States, followed by Germany (18%), China and Australia (both 17%).

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Exporting effectively and efficiently

So how do businesses give themselves the best chance of success when entering new markets? Certainly, working in collaboration with a trusted partner with a deep knowledge of the local market can be of huge value in tackling unfamiliar territories – establishing contacts and helping exporters deal with a host of bureaucratic issues ranging from tariffs to intellectual property protection. But making the right decision about the most suitable route to market is also crucial. In many growing markets, especially in advanced manufacturing, this may require a joint-venture with a local company so well directed introductions will be crucial. On the other hand for other sectors, we also believe ecommerce has an increasingly important role to play in helping first-time as well as existing exporters reach new customers in a way that does not require them to make the commitment of creating a physical presence in their target market. Our latest figures show that a third (33%) of businesses already use ecommerce as part of their international trading strategy. But there is considerable scope for this proportion to grow. The key is to match growing demand in these markets with your targeted supply, and choose the export path with trusted advisors which will most help your business grow.

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