Top tips on companies finding success overseas
10 min read
02 September 2016
Led by a government drive, exporting has been steadily creeping up the news agenda and now sits at the top of "to do" lists of businesses of all sizes. The message is clear: to achieve fast and sustainable growth, firms need to enter new markets. But where to start?
Traditionally, the UK tends to export to mature markets close to home, such as France or Germany, but it’s easier than ever to tap into less-known markets further afield. That’s where building a strong network of trusted and supportive partners who are experienced in trading internationally come into play. With this network in place and an indefatigable can-do attitude, British businesses can become world-renowned in any number of different sectors.
Entering fruitful markets
At FedEx Express we often speak with bosses shortly after they receive their first order from overseas. They haven’t necessarily gone looking for international clientele, but in the digital age they’ve been offered a fantastic growth opportunity on a silver platter. And one of the key pieces of advice we offer is to explore the market in that country to gauge if there is further growth potential. This doesn’t have to involve a major financial investment, as jumping on a plane can be enough to gauge main competitors, market share and price points, and teamed with local support and data insights can provide a much clearer picture of the opportunities available.
To help businesses in the healthcare, high-tech and fashion sectors, we’ve drawn on our years of exporting experience to detail the markets of opportunity, as well as advise on overcoming the main challenges.
(1) Healthcare advice
The majority of UK healthcare companies already require a global mindset given the nature of the industry’s supply chain, making global expansion a more logical and instinctive move than in some other industries. The key is to explore where the strongest demand exists for your products and/or services and to be as flexible as possible when entering new markets, staying fully informed of the potential complexities of this innovative and ever-changing sector.
When exporting, specific clearance and regulatory requirements should be identified, understood and factored in, and note that these can change at an alarming rate depending on which market is being entered. Make sure you gain clearance up front and ensure full descriptions of pharmaceutical products being transported are given to ease the process.
There are several “fruitful markets” for healthcare companies at the moment. Dubai is a very healthcare-focused city-state with many people traveling there for treatment from overseas. Japan and Korea are also worth considering as their respective governments are investing a great deal in the private healthcare sector, diversifying the market and inspiring growth. Elsewhere, China is the third largest healthcare market in the world, seeing growth in double-digits. And healthcare markets in both Brazil and India are both booming. With Brazil being the fifth largest country in the world, it’s a market definitely worth considering, however it’s worth noting all shipments to Brazil containing products for resale do require the recipient to engage a broker for the clearance process
In all of these markets, having a thorough understanding of the culture and its approach to doing business is vital. And while things like business etiquette may seem relatively minor, not following the correct protocols could be a deal-breaker. That’s why it’s a great idea to speak with a logistics provider that specialises in the country as this will give you on-the-ground insight.
If transporting human or animal materials/samples then you will require precise commercial invoices that outline the source material and the reason the item is being shipped. Items used for treatment will also require pre-market approval from a nations’ sanitary or healthcare regulatory body as do any medical devices. Healthcare and pharmaceutical products also often require a sanitary permit. In many countries such as Italy, there are specific healthcare processes compared to that in the rest of the EU.
Continue for exporting advice in the high-tech and fashion industry.
If you are trading in automotive parts or other high-tech goods then understanding the prospects and where the main manufacturing bases are in the world is important. Gauge if it’s worth producing a part of your product or its entirety overseas or whether domestic manufacturing is worthwhile. Outsourcing business or IT services by implementing a near-shoring model is also worth considering.
If you do decide to manufacture overseas, it is wise not to choose a country but to pick a supply chain where it is cheaper and more economical to build. The high-tech sector is defined by its R&D and considering some of the world’s most technologically advanced nations including China, Singapore but also the Netherlands is a good place to start. This is because these nations have established accessible infrastructures that can help you get to market as quickly as possible. That said, emerging markets in Brazil and India are rapidly coming to the fore and offer a very viable alternative to the established markets. Don’t forget to take the fact that British-made products are often held in high esteem into your decision.
When it comes to exporting high-tech materials or products, make sure the value of the shipments are declared. If a high-tech product is shipped complete, a list of parts is unnecessary. If it is incomplete then parts should be identified by their individual part name and value. That said, it should also be communicated if the assembly of a product differs to the origin of key components and can be depicted as: manufactured in UK, assembled in China. The country origin of each part must be communicated and is usually determined by the location the last major operation was conducted.
By capitalising on the growing appeal of “Brand Britain”, the UK fashion industry has already seen huge growth from ecommerce. In the fast-fashion age, an efficient supply chain is invaluable. Building on this mounting interest in British labelled clothing, first time apparel exporters should consider exploring European markets as a first step. Given the current Free Trade Agreement and short transit time, it is a natural first step to take.
Further afield, the US is the fruitful market to enter and it is worth taking note of the “fashion hubs” – New York and Los Angeles. When entering any market, consider the price point carefully. If you are exporting to a market with a taste for high-end fashion such as the UAE, consider your value proposition before getting started. The quality of British products is important and even if manufactured in India and transported back to the UK before being sent to the US, this should still provide huge appeal. You may even consider building Britishness into your branding.
It’s vitally important that you take customs clearance into careful consideration. For example, you will need to declare the exact textiles used to create each garment based on their percentage by weight; the stitch count should be considered for knitted garments; gender, construction and garment design also play their part. Additionally, consider how to receive the duty and tax on each product as there are certain complexities in Canada and limitations regarding exporting apparel to the US given the complex paperwork required.
Exploring new areas
Whatever your industry, it is worth taking inspiration from further afield when growing your international presence. There are countless export opportunities out there and sometimes what seems like the ideal market, might not be as ultimately fruitful as other, lesser-known ones. Gain guidance from experts locally and your chosen country to export to. It is important to have the correct network in place so demand can be met and most importantly grown, so your business can realise its potential and become a true Export-preneur!
Martin Davidian is MD of sales at FedEx Express.