Last month City Grump suggested, in the wake of the Greek crisis, that the UK should leave the EU. As a loyal British subject, head of an international company and based in Berlin, I take a different view on this than some UK-based people: leaving the European Union (EU) would be a disaster for UK ecommerce and internet brands who want to compete in a global market.
It would leave isolated and in danger of being squashed by global players. A large, single market is crucial for new companies to scale and compete.
Ever wondered why the global internet market leaders come out of the US and increasingly China? It is because each can get big in a single big market. This makes businesses more investable and scalable from day one; from there each can position for global dominance.
An American company grows up in a market of 277m internet users, a Chinese company 644m and a UK company 57m. So there is a limit to how fast and big a UK company can scale. However, if a business wakes up and sees itself as a European company, as Spreadshirt did, it is looking at a market of 399m internet Users. From there Spreadshirt was able to use its scale to attack the US market. On from there we find ourselves in Canada, Brazil, Australia and now looking at Asia. Without the EU scale this would never have happened.
Open borders provide a huge opportunity in several different ways:
For ecommerce entrepreneurs, this is a huge opportunity. Some 399m Europeans are easily reachable with marketing and delivery services; with a similar legal basis and taxation system. Yes, we speak multiple languages, but translation is easily managed and relatively cheap. And yes there are different currencies but the heartland of the EU is covered by the euro and great services have evolved to help with currency and payment management. These problems are not hard to solve.
The freedom of goods to cross borders is a must for ecommerce; but so is the freedom for people to move. Our EU HQ has people from 20 nationalities and without them we would not be able to be so international. For us and other ecommerce businesses, it means the freedom to employ the right person for the job.
Today Berlin is a major tech hub and a centre for new ideas, attracting talent from across Europe, and the home of exciting new startups and established businesses. As an Englishman here, I have benefitted from the EU’s freedom of movement, as have many people who now work in continental Europe permanently or find it easy to travel for work into countries which were once even behind the Iron Curtain.
Read more about Berlin:
- London top for startups, but has Berlin nipping at heels
- Why Berlin is set to surpass London as Europe’s startup capital in five years
- The top 6 European cities for startups in 2015 and the companies to watch
Contrary to the general myth about the EU, I think it may have reduced red tape in many areas; particularly for retailers. We have perhaps forgotten how slow and difficult it could be to bring products into a country or export them. Data protection, consumer rights and even employment is largely getting easier in countries that treat the EU directives sensibly.
As we do almost half our business outside the EU, Spreadshirt can see the difference. We really notice the lack of restrictions within Europe when we have to deal with Swiss taxes or Norwegian customs, for example. And some of the laws we deal with vary across the US and Brazil would take a whole book to describe the problems.
In the end the UK companies and population suffer from not really using the benefits of being part of the EU. UK Internet companies are already be in danger of having to grow up in a small island territory and never get to a globalising level. Leaving the EU would seal this fate. Worse they will be eventually be wiped out by those of us who did grow in bigger territories when we arrive in the UK.
As a loyal royalist “Brit”, England fan and early London internet entrepreneur (I started in 1996) I am already sadly watching London struggle to maintain its place as a top Internet city. But the industry I love is now facing a real danger of being isolated. The British should make more of their opportunity to scale quickly and operate in a larger market. The EU has a lot to offer ecommerce entrepreneurs; it’s time to take advantage of that.