Siddharth Shankar had a long-held passion for the originality and craftsmanship of British made consumer goods. After attending university in the UK, he put his passion into business practice and launched Tails Trading, a company that solely deals with British SMEs and offers their unique products to the Asian market.
Real Business sits down with the 27-year-old entrepreneur to talk about his business and why Britain still has so much to offer the international market despite Brexit.
Company: Tails Trading
What events led you to start Tails Trading?
I came to this country to do my MBA, Brexit had just happened, and the industries were uncertain about was going to happen.
We had a lot of SMEs that used to come to our school, and we recognised that these people had great products to offer.
My business partner is from China and I’m from India. So we know our own markets really well.
So we asked these businesses simple questions, such as why didn’t they export to our markets? We know there is a demand there, they love British goods, and you have a great, high-quality product.
After several discussions about our idea we can to two conclusions as to why there weren’t more great British SMEs exporting their goods abroad.
The first was the risk appetite, and the second was resources. For these SMEs dealing in these new markets with such an alien jurisdiction was too much for them. That’s when we saw a space for our idea.
At that time the UK was at it’s lowest exporting number, after the referendum result, so we thought, wow, this the perfect opportunity to start our company.
How vast is the array of products you offer?
In terms of our portfolio, we offer everything from boots to boats. We’re not only in one industry. It’s not about one brand, it’s about promoting an entire portfolio that is much, much bigger.
Did the uncertainty around Brexit affect your business?
I wouldn’t say it affected us negatively. The opportunity to start the business came about because, at the time, the UK was at it’s lowest exporting ebb.
However, Brexit was definitely a catalyst that stimulated more interest in a business like ours.
So where we would have originally had to go out and look for brands and convince them to partner up with us, they were already half convinced because of the economic uncertainty that Brexit caused.
Where did your interest in British products come from?
I’ve always had a weakness for British made products. However, my business interest came from when I was working as an investor.
I was working across multiple industries in the Asian market, even then I could see the demand for quality British made goods.
I don’t think Asia is particularly strong at producing en-mass quality products. It’s not a natural quality there.
So there certainly is a demand for that considering the market’s increasing buying power. That’s when we knew there was room for us to start our company to put the two together.
There is a growing demand for quality goods and variety, and this demand has been rising steadily for the past twenty years.
This has, and continues, to be the case across all major emerging markets worldwide, not just in Asia.
What’s special about British products?
British goods are definitely high on quality. But they are also high on price. So it was about making it competitive enough to match the world market. British products have a lineage, they have a history.
When it comes to your suppliers, do you have a vetting process?
Yes, apart from our legal arrangements which enforce performance clauses like timely production and quality control, before we onboard the brands, we also undertake a TEV report, which is a technical economic viability report.
We start by looking at the numbers, and ask, can these founders produce those items? Can they keep up with the demand?
These reports are very deep and are only circulated internally. No one else sees them, they are really just for us to see if working with these brands are going to be worth our while.
Your business partner is from China, do you also cover that market?
We cover Pan-Asia, that’s broadly classified as the Middle East, the Indian Subcontinent, South-East Asia, Greater China, and East Asia.
This classification is done via how porous the borders are for the countries in this region in relation to marketing activities.
So if we launch something in mainland China, for example, we ask, does it have any bearing in Hong Kong or not?
When it comes to Asia, if we remove Russia and North Korea, there are only two restricted major markets in the region. That’s India and China, and both countries have rules that favour nationals when it comes to importing and exporting goods.
Not only do we know the markets well, and have good reputations in and around those markets, we also understand the rules. For example, if you’re looking to import a product into China, you might be looking at a waiting period of 6-8 months at the holding docks if you’re a foreign company. But if you’re a national trying to import it, it’s only 1.5 weeks.
There is a very competitive speed to the market. Bigger European brands such as Zara are known to partner up with local parties to speed the process up.
Where do you see your company in a decade?
I would expect all my brands to be fully launched and functional. Asia has a population of 4.6 billion people, that’s a huge market. So numbers that look really big here in the UK, are not that big over there.
This would include an average cash-flow of at least £10-12 million per brand. We would be looking at 300 brands, so that would put us at a valuation of £4-4.5 billion yearly.
We want to do a lot of things, but the top of this list would be integrating a lot of the logistical processes in-house to reduce costs, but overall, I would like to see Tails Trading become a globally established partner for SMEs wanting to get into Asia.
As we grow, we would also like to help our SMEs expand their businesses, as it’s pretty difficult for them to get the necessary funding from backs at the moment.
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