UK small businesses were responsible for £11bn worth of export growth last year, as trading internationally on online marketplaces such as Amazon and eBay has become more popular.
Britain is moving closer towards its stated export target according to a report from international payments provider WorldFirst, which also reported that small business international sales figures could climb to £21.3bn by 2020.
The report dubbed small businesses selling on online marketplace iStreet” sellers, and found that 55 per cent of these have experienced growth in the last 12 months with 29 per cent experiencing revenue growth of 20 per cent of more. In addition, nine per cent saw total revenues from exports increase by more than £500,000.
Around 40 per cent of all businesses selling online are exporting, and a quarter of these businesses do so through marketplaces as opposed to hosting their own online shop. The EU is the most popular trading destination (86 per cent of businesses trade with the bloc), followed by the US (66 per cent of businesses).
However, although marketplaces facilitate easier exporting, some challenges remain.
More than one in five (21 per cent) of small businesses cite difficulties with logistics as the main barrier to exporting, and 17 per cent highlighted the risk associated with doing business across multiple currencies.
Jeremy Cook, chief economist at WorldFirst, said: “It’s well known that online sales are rising year on year and a key driver of that growth is a band of online sellers that are using marketplaces like Amazon and eBay to build high-growth, multinational businesses. Whilst these businesses are not on your local high street, they are making waves on the global iStreet that has in part replaced it. Marketplaces like Amazon and Etsy make it as easy for UK businesses to sell to customers in Berlin as Birmingham or Miami as Manchester.
“Marketplaces can be a relatively low-risk gateway to the world and these businesses are benefitting from this access to target new customers in new markets and they?re reshaping UK exporting in the process. Financial services providers have an opportunity to facilitate this trade and help this new wave of mini-multinationals to grow. These ambitious businesses need access to services that reflect their new, international business models, in particular making it easier for them to manage multiple currencies and handle cross-border transactions.
A report by FedEx earlier this year revealed the top UK SME export markets within Europe were: France (60 per cent), Germany (56 per cent), Ireland (43 per cent), Spain (39 per cent), and Italy (35 per cent).
Outside of Europe, the top export markets included: US (38 per cent), India (20 per cent), Australia (16 per cent), UAE (15 per cent) and South Africa (13 per cent).