With many UK companies now looking towards expansion into foreign markets, RBS has been researching the main trends in international trade over the past year. The findings have made interesting reading for anyone thinking of trading abroad, and may help improve your trading strategies.
In research conducted amongst 518 key decision makers within UK companies, it was found that over two‑thirds of UK businesses believed that now was a good time to increase overseas trade and that export activity would be key to the growth of the UK economy. In fact, the survey showed that over one third of businesses have now been prompted by the weak pound to consider exporting.
- Over two-thirds of businesses believe that now is a good time to increase overseas trading, and that export activity will be key to the growth and success of the UK economy.
- Over 50% believe that UK organisations are not sufficiently aware of the opportunities for exporting,
or indeed are realising the potential value to be had from such activity.
- Just over one-third of businesses have been prompted by the weak pound to consider exporting.
Barriers to international trade
There will always be barriers to exploring new markets, however the research has shown that difficulty finding international customers and lack of knowledge are seen by almost half as the main barriers to trade. Furthermore between a half and two thirds have concerns about not getting paid, operating in markets they don’t understand, controlling risks and a general lack of knowledge about international trade.
- Whilst 57% of all businesses believe their product or service would sell abroad, over two-thirds believe that some businesses will be put off by the complexity and risk of exporting (particularly outside of Europe and North America). Over two-thirds believe that there is a need for specialist export knowledge, and over half that businesses are ill informed in respect of funding.
- 74% are confident about their organisation’s domestic trade activity. Confidence declines to 52% in relation to trade with Europe and North America, and to 32% for emerging markets in general and 30% for Asia.
- Not surprisingly, exporters have higher confidence in their organisation’s trade markets excluding the domestic market.
- Larger and global businesses are significantly more likely to be confident in exporting to Asia. Those in the engineering sector are significantly more likely to be confident regarding export activity in Europe and/or North America and Asia.
Exploring new markets
If you’re considering expansion overseas, and don’t feel fully confident about the prospect of success, don’t worry – you are not alone. 74% of companies are confident about their organisation’s domestic trade activity, but that confidence declines to 52% for trade with Europe and North America, and to 32% for emerging markets. While this lack of confidence is present among UK businesses, it need not be. Help and support is available to assist in making the leap overseas.
Although Western Europe is the best understood export market, Asia is perceived to present the most opportunity for UK businesses. Approximately two thirds of businesses agree that Asia represents a new market opportunity.
Surveys show that over one third of businesses have now been prompted by the weak pound to consider exporting.