In the next five years online retail sales will grow by 12% annually, eventually outstripping ‘bricks and mortar’ retail sales. UKTI’s new e-Exporting Programme aims to help UK businesses benefit from this booming market
E-exporting is a branch of e-commerce that focuses on the exporting of a physical product. It is a great option for a wide variety of UK companies as it means that businesses can get their products to consumers across the globe without having either a physical presence in the country or using a distributor. This reduces overheads which, in turn, increases profit margin.
If you are looking to broaden your consumer base to the non-domestic market, then it is imperative that you find online channels through which to do this. If you are a retailer who doesn’t export then, unfortunately, you have catching up to do. As many as 70% of UK retailers use the electronic marketplace to sell to consumers across the globe. The UK has one of the largest online distribution networks in Europe, and, by 2018, the sector is estimated to be worth somewhere in the region of £60 billion.
It is a growing area, with an estimated 3 billion new consumers set to come online in the next two years. There is also an expectancy among consumers that the brands they like and read about will be available to buy online.
There is a strong desire for British luxury brands online, especially when it comes to fashion and accessories. E-exporting enables immediate satisfaction of consumer impulse, which can translate into a purchase in a matter of minutes.
Another advantage of e-exporting is that it a good way to feel out a market. If, for example, you find that you are exporting a great deal to a particular country through online channels, it may give you an indication that it might be a good idea to concentrate further energies there, either by finding a distribution partner, opening a physical store or focusing more advertising revenue in that jurisdiction.
According to a McKinsey study in 2013, there is a particularly large demand for UK products in the following areas: Men’s and Women’s Apparel, Footwear and Accessories, Health and Beauty, Sport and Outdoor, Home and Garden, Electronics, Giftware and Jewellery, Food and Drink.
UKTI’s e-Exporting Programme
UKTI plays a pivotal role in supporting British businesses that are looking to expand their business beyond the domestic market. Their comprehensive network of industry specialists and advisers provide businesses with advice and practical help on exporting.
UKTI has developed an e-Exporting programme that augments existing UKTI services and helps enhance the opportunities available to export-ready businesses.
Having a website that has the potential for online sales is the baseline when it comes to international sales. If you want to reach the widest number of consumers possible, it is imperative to access e-marketplaces. E-marketplaces such as Amazon are sites that get a huge amount of traffic and where site algorithms introduce new consumers to your product based on their purchasing of similar types of products.
While you may be able to think of a few, UKTI has identified approximately 400 globally. It has developed relationships with each marketplace, and has entered dialogue into how the interests of UK businesses can be supported on each site. UKTI is now signing cooperation agreements, which will help fast-track UK products to these marketplaces.
Global e-marketplaces are fast gaining traction online and have the potential to be lucrative for the UK retail trade. For example Tmall, China’s biggest e-marketplace, receives over 100 million unique visitors per day and is set to overtake Amazon as the biggest site of its kind in the world by 2015.
UKTI wants to increase the volume of UK businesses trading through these portals. If you look at companies such as Burberry, ASOS, Karen Millen, Marks and Spencer, Barbour and Fred Perry, they already have an extensive presence on these online marketplaces. Your business could be next.
How can UKTI help my business?
Digital advice is available through UKTI advisors who can help match your business to the
correct e-marketplace based on your sector, product and target consumer base. There is also the chance to make your own connections through meetings and face-to-face events with key executives from these global marketplaces.
Businesses can also enjoy access to UKTI’s e-Expertise Bank. As part of this resource, industry experts will provide advice on how to establish a successful and profitable presence on an e-marketplace to their peers.
Tangle Teezer Limited has worked with UKTI since the company launched in the UK in 2008. The brainchild of London based hair colourist Shaun Pulfrey, the Tangle Teezer® is a hairbrush with a unique design that glides through wet or dry hair, flicking tangles apart with no tugging or yanking.
The company took part in UKTI’s Passport to Export initiative to prepare them for export, and the Overseas Market Introduction Service to research and find distributors for the German and South African markets.
Shaun Pulfrey, Chief Executive Officer of Tangle Teezer Limited, was interested in expanding the company into the Chinese market. The company generated online sales through its own webshop and secured distribution deals with some of the most prestigious department store groups in China and Hong Kong.
However it was difficult to increase sales via the traditional retail route. This was due to a long supply chain combined with high duties and shipping costs. The company was keen to increase market share, but realised it would need to do it through other means.
The company attended market briefings by UKTI and seminars run by the China-Britain Business Council (CBBC), UKTI’s official trade service delivery partner for mainland China. It learned that online retail was big business in China, with more than 260 million Chinese consumers shopping online every day. Chinese consumers like British goods and fashion and beauty items, so Tangle Teezer® was the perfect crossover product.
In February 2014, Tangle Teezer® attended a seminar in London organised by UKTI. The company met directly with Chinese representatives, including TMall, who were in the UK looking for local brands to feature.
“From the CBBC seminars and UKTI briefings that we attended and our own research, we were certain that there was incredible scope for selling to the emerging Chinese consumer,” says Pulfrey. “The question was how to tap into that potential, without making a huge investment. It was a lovely surprise to find the TMall representatives at the UKTI event. They assured us that they were committed to protecting the IP of brands they sell, and told us that their international brands department would guide us through the process of setting up a Tangle Teezer® Official Store on the website. Four weeks after our chance meeting at the UKTI event, we were up and running.”
Within that timeframe of four weeks, the company sold more units than it had sold over the previous 12 weeks. According to current forecasts, sales are now set to triple in China year on year.
The company also discovered Hot Pot Digital, a digital marketing agency that specialises is the Chinese Consumer market and has offices in London and Beijing at the UKTI event.
Shaun believes that involvement with UKTI helped his company to fine tune its approach to the new market. “The use and influence of social media on buying decisions surpasses anything we have seen in the UK. If a young Chinese consumer wants information about a product or brand, they will use their smartphone. Thanks to the support we’ve had from UKTI, the CBBC and our other contacts, we have approached China in exactly the right way. We’re making real headway and if things carry on like this, this is set to become our biggest international market by the end of 2015.”
Getting started can initially be daunting, but you can access assistance to help you with registering your trademark and website, landed cost calculation, packaging, shipping and payment queries. Your UKTI advisor can also help with tax registration, and give advice on marketing and other related
You can find out more about UKTI’s e-Exporting programme via the following routes:
- Visit Gov.uk/e-exporting to find out more about the programme
- Phone or email your local UKTI office to organise a meeting with an International Trade Adviser