SME retailers look beyond the EU in 2016
International confidence is high among the UK’s small online retailers with over half aiming to increase international sales in both new and existing markets in 2016, according to Royal Mail’s annual tracker study into their ambition.
The annual tracker revealed that Australasia has seen the most significant increase in interest as an export destination: 23% of small online retailers believe it holds the greatest opportunity for export sales growth, compared to just 55 last year. Asia has also increased in importance as a target export destination; 26% believe it holds significant sales opportunities, up from 12% last year.
Europe remains the main target for exports: nearly half of SME retailers are aiming to sell their products in the Eurozone in 2016. This compares to just a third last year. Meanwhile the USA is seen to present the greatest opportunity for UK small online retailers in the next five years by 30% of SMEs interviewed.
For us this means in addition to the default UK marketplaces, eBay and Amazon, that sites such as New Zealand’s Trade Me, China’s Alibaba sites and JD.com should be top of your expansion plans and if you’re not already selling to the USA it’s time to do so.
Of those who sell overseas, nearly two thirds actively promote their international delivery service to attract foreign customers. A third only offer international delivery options at check-out and do not advertise beyond that, while another 10% will offer international delivery only if specifically asked.
On marketplaces there are generally five ways you can sell overseas using your UK Amazon and eBay accounts.
1) Quote on request
You can simply wait for an overseas customer to ask how much it would cost to ship to them, which probably means you’ll lose out on sales.
2) Passive cross border trade
You can list on domestic marketplaces with international shipping options.
3) eBay Global Shipping
eBay makes it easy for you to sell overseas by allowing your products to be included in their Global Shipping Program. You simply ship to a UK warehouse and eBay handle the overseas shipping.
4) Active cross border trade
You list your products on overseas marketplaces in local language with local currency displayed.
5) Amazon FBA
With Amazon you have a further option with their Fulfilment by Amazon (FBA) program, you can either have your stock located in UK warehouses and allow Amazon to ship overseas, or you can place your inventory in local country FBA warehouses enabling Amazon to ship faster into the territories you wish to target.
A lack of knowledge of international markets remains the main barrier to further export activity, holding back nearly 40%. However the complexity of shipping to international markets also deterred around a quarter of small online retailers from exporting.
To help UK SMEs break the barriers to exporting to China, Royal Mail last year announced the launch of its shop front on, Alibaba’s e-marketplace, Tmall Global. Royal Mail’s Tmall Global site offers British retailers the opportunity to access the Chinese market while removing the logistical challenges that many companies would otherwise face. These can include the cost and complexity of accessing Chinese e-commerce sites, the challenge of providing local customer support service, as well as managing customs duties, documentation, shipping and logistics.