Is Now The Time For Businesses To Expand Beyond The EU?
The UK’s exit from the EU came as no surprise to businesses – Brexit negotiations had been well documented in the four years prior – however, the outcome remained uncertain until January 1st 2021. Even when eleventh-hour deal was finally agreed on 24th December 2020, just one week before the Brexit deadline, businesses had precious little time to prepare their operations.
As such, the immediate aftermath of Brexit proved problematic. Businesses struggled to understand complex administrative changes, whilst border delays and visa issues led to staff and resource shortages.
Unsurprisingly, such challenges dented business confidence. So much so, in fact, that research conducted by One World Express in January 2021 revealed that a quarter (25%) of UK organisations were not confident that they would survive until the end of the year. However, as the year progressed, business leaders grew accustomed to post-Brexit practices and confidence began to grow.
“Over two thirds (67%) of companies said that having a British brand or UK-based operations have enhanced their organisation’s reputation and demand within international markets.”
Looking beyond the EU
Inevitably, with the additional complications to commerce, trade between UK and EU businesses declined within the first few months of Brexit. ONS trade figures for January 2021 revealed that UK exports to EU countries had declined by 40.7% compared to the previous year.
However, while trade with EU countries declined, those ONS figures highlighted that exports with non-EU countries remained steady; January 2021 even saw a modest year-on-year increase of 1.7%.
So, in the aftermath of Brexit, UK businesses began to consider trading opportunities beyond the EU. In fact, a recent survey conducted by One World Express amongst 752 decision makers within UK businesses found that, of the 61% of organisations already operating abroad, or planning to expand internationally within the coming 12 months, more than six in ten (62%) claimed that Brexit had encouraged them to expand their business beyond the EU.
Such confidence regarding entrance into markets beyond the EU is warranted – One World Express’ aforementioned research found that 68% have experienced an increase in international demand for their goods or services. Indeed, almost two thirds (63%) of exporters claim that markets beyond the EU are more likely to pay a premium for their business’ product or service.
One of the key reasons for this growing demand appears to be the fact that British products have an international reputation for quality. Over two thirds (67%) of companies said that having a British brand or UK-based operations have enhanced their organisation’s reputation and demand within international markets.
Given the lack of confidence at the beginning of the year, these statistics are certainly encouraging. They suggest that “Brand UK” holds weight within international markets, in spite of the immediate post-Brexit turmoil. However, relying on branding and reputation alone is not enough to guarantee international success. Other considerations must be made if a business if going to expand into new, international markets.
A strong strategy
As is the case with any change to business operations, preparation is key. Given that almost a third (32%) of exporters still don’t have a clear international expansion strategy, there are some vital points that must be addressed.
A key starting point is to conduct thorough research. Understanding the market, target audience, and international culture is key to market entry. Doing so will enable a business to tailor marketing towards their specific audience and will enhance the chances of success with new customers.
Secondly, it is key to forge connections within new markets. These could be distributors, popular eCommerce marketplaces, or mentors who understand the new market. Encouragingly, many UK businesses understand the importance of forging connections and partnerships; according to One World Express’ research, 72% of UK exporters have already done this.
Finally, businesses must develop a strong logistics strategy. From transparent tracking systems and returns management to shipment software, there are numerous services available to meet the needs of each specific business. And if in doubt, decision makers would be wise to consult a logistics expert, who can help organisations to develop a sustainable strategy to ensure the quality of the courier matches that of the company’s goods or services.
It’s certainly promising to see the confidence of UK businesses’ growing following the aftermath of Brexit. And there is certainly strong international demand to warrant such confidence. That said, businesses should not depend on branding alone. Adequate preparation, from research and business connections to logistics strategies, is vital – and consultants are always on hand to aid their expansion as necessary. And in doing so, companies will undoubtedly increase their chances of success within international markets.
Atul Bhakta is the CEO of One World Express, a position he has held for over 20 years. He also holds senior titles for other retail companies, underlining his vast experience and expertise in the world of eCommerce, trade and business management.