British businesses are ambitious for international growth and see exporting as key to their success, according to new research released today.
The study from the Alibaba Group, in partnership with Institute of Export and International Trade found nearly half of their annual revenue is generated from exporting goods overseas. Over seven in ten of business owners surveyed anticipate their export sales to increase1 in the next 12 months, with almost a quarter saying they expected a “significant increase” in sales.
Beyond the economic benefits, the research indicates that these exporting businesses are also more resilient, with just over four in five saying exporting had made their business stronger. 82% of respondents said exporting had fuelled innovation within their companies, while 79% of businesses said3 they had increased their headcount as a result. Some 79% said3 exporting had relieved the pressure of doing business in the UK.
When it comes to export markets, British businesses surveyed are looking close to home. Nearly three in ten regard the UK’s nearest neighbours in the European Union as their top export market. Looking to future growth, North America, Asia and China present the biggest opportunities.
Despite the positive outlook, many businesses who export or have exported in the past perceive challenges that could stand in the way of their export ambitions. Nearly a quarter cited supply chain and logistical issues as the biggest barrier, followed by increased paperwork and red tape and competitive pricing. Economic uncertainty and lack of cultural awareness/familiarity with the overseas market complete the top five potential barriers to export.
A significant number of UK SMEs are yet to begin selling overseas – nearly a quarter of those surveyed do not currently export.3
For businesses focused on international growth, more than seven in ten of those surveyed are currently using online marketplaces to boost their export sales. Three in 10 started working with online marketplaces during the pandemic, with the pandemic providing a strong impetus for businesses to adopt digital tools.
Roland Palmer, General Manager of UK, Nordics & the Netherlands, Alibaba Group, said: “The big picture is British businesses believe export is integral to their success and recognise that international markets represent their best chance of transforming their business potential.
“Our research suggests significant opportunities can be found in overseas markets, enabling businesses to accelerate growth and mitigate risk at home. However, it’s vital businesses – especially SMEs – get the support they need. At Alibaba, we’re focused on levelling the playing field when it comes to unlocking opportunities on the global stage.”
Marco Forgione, Director General, Institute of Export and International Trade (IOE&IT) said: “This research confirms what we have long known – that exporting firms are more sustainable, profitable and resilient – but also sheds light on some of the many challenges that prevent businesses from exporting at all or exporting as much as they could.
“The whole trade community needs to work together to combat and reduce these challenges. IOE&IT is committed to promoting trade as a force for good and doing all we can to help every business start or expand its export activity, regardless of size, sector or home market.”
New research shows UK exporters are optimistic about prospects for growth in next 12 months