While global ecommerce is booming, and start-ups eager to take advantage of new online marketplaces providing direct access to consumers, increasing complexity and issues surrounding export logistics are significantly stifling trading opportunities for UK SMEs.
The culmination of unprecedented events, including Brexit and the Covid-19 crisis, have pushed current exporting operational models to breaking point, with industry lacking the logistical foresight or workforce to alleviate this strain.
This has had an extremely detrimental impact on small businesses. Findings from a survey of 1,000 UK SMEs by Enterprise Nation and GS1 UK, highlight how a third have suffered damaged or lost consignments when exporting goods and 40% cite complex paperwork as problematic for their business.
In addition, the cost of trading overseas has risen exponentially to unsustainable levels for these starts-ups, with 41% experiencing expensive and slow shipping and a third having unexpected charges or duties added to customer costs. This has driven down profits and consumer appetite for these products.
These logistical barriers have worsened at a time when UK businesses no longer see international trading as one of their primary concerns preventing growth. Instead, many are confidently trying to seize global opportunities for export following the rise of direct-to-consumer online marketplaces and social channels; three quarters (75%) now say exporting is a viable opportunity early on in their growth journeys and over half of businesses are already exporting products.
It is therefore a considerable shame for industry that UK entrepreneur export ambitions are currently being held back by these logistical barriers. GS1 UK and Enterprise Nation are calling for increased industry support from all key stakeholders and government to tackle this. This includes improving awareness of the initiatives available to this cohort.
Emma Jones, Founder of small business network and business support provider, Enterprise Nation, says: “What is clear is that the Government mantra ‘exporting is good’, has finally hit home and is being wholeheartedly embraced by the UK’s entrepreneurs – interestingly even those at very early stages see exporting as an important route to success.”
Jones adds: “But while they have nailed how to market their products and services to overseas customers and handle currency and payment, they need more support to build good logistical skills and capabilities that will ultimately cut shipping time and costs. The missing piece in their armoury is literally delivering the goods.”
Sarah Atkins, Chief Marketing Officer and Membership Director at GS1 UK, says: “It’s clear size does not matter when it comes to exporting and it is no longer the territory of the big boys. It’s really good news that start-ups and micro firms now see international trade as a key driver of success and their customer-centric marketing prowess is opening global doors.
She adds: “What we need to see now is a shift in emphasis of export support for small firms, from marketing and awareness to more technical elements such as finding and working with efficient delivery partners, ensuring labelling is watertight to avoid unnecessary delays and clearer guidelines specifically aimed at smaller businesses from Government. We also need to see the Government operating in a new ‘transparency and assist mode’ so we can make the progress we need to see.”
Overall, the SMEs surveyed emphasised how it is the lack of transparency and clarity that primarily needs to be addressed in order to improve their navigation of the exporting process. 58% feel that there needs to be clearer guidelines for small businesses, with just under half also citing expert advice and greater access to overseas market information as other helpful tools to increase trading sales.