More than a fifth (22%) of UK businesses – including a third (33%) of SMEs – do not export, but most of those that do say they expect their sales to increase in the next year, a new report suggests.
Businesses said that paperwork and customs rules (28%) presented the greatest challenge to trading abroad, followed by supply chain issues (26%) and concerns about late payments, according to the Alibaba Export Outlook Report, which questioned more than 2,000 UK businesses.
Almost half (48%) said exporting internationally would be viable for their businesses – but that they were concerned about the challenges of cross-border trade.
Most do export however, and of those that do, 78% say they expect their exports to increase in the next year, including 81% of those selling to businesses. Respondents say that fashion (33%) is the leading sector for their UK exports, followed by consumer electronics (24%) and toys (19%). Most (92%) exporting businesses work with online marketplaces to boost sales, and 68% say it’s a key part of their export strategy. More than half (54%) are making more of their international sales online for cost reasons, while 49% are selling online to reach more potential buyers.
Roland Palmer, general manager of UK, Nordics & The Netherlands at Alibaba Group, says: “While it can be daunting to enter a new market, the opportunity for UK businesses to ‘go global’ could have a transformative impact on their future growth. By trading internationally, businesses of all sizes are able to expand, potentially creating more job opportunities and economic growth.
“Once a business starts to export, they often find the benefits outweigh the perceived barriers and they grow in confidence. We’re focused on helping UK businesses of all sizes on their export journey.”
In a post Brexit-world, UK businesses surveyed say North America (42%) represents the biggest export opportunity followed by the Middle East (32%) and South/Central America 27% respectively.
Asked what support they would need, the largest groups of businesses say they’d like professional advice from an export adviser, more government support, and specific information about the markets they are considering (all 38%). Some 37% would like grants to support their costs while 36% want overseas marketing information.
Last week the UK Office for Budget Responsibility said it continued in its assumption that leaving the EU would result in UK imports and exports being 15% lower than if the UK had remained a member state. This week UK Chancellor Rishi Sunak said that UK trade had inevitably been affected as Brexit raised barriers – and that the UK’s poorer trading performance might be linked to the change in trading status.
“It was always inevitable if you change the exact nature of your trading relationship with the EU, that was always going to have an impact on trade flows,” Sunak told the House of Commons Treasury select committee.
