Alibaba is China’s biggest online commerce company that offers consumer-to-consumer, business-to-consumer and business-to-business sales.
Why is export to China only considered by 7% of SMEs
Why don’t you export to China? Many of the online sellers we speak to talk not of difficulties of the mechanics such as translation, currency and other technology to list and manage online offers, but the problems of scale. The perceived thinking is that you can’t export to China in a half hearted try and test manner but need to go all in. Live streaming, augmented reality and gamification to create real connections to consumers with brand ambassadors and social media influencers don’t come cheap.
In October, Alibaba conducted an analysis of 1,000 British small and medium-sized enterprises’ attitudes towards export, perceived barriers to doing business internationally, and how overcoming these will be key to boosting growth and resilience in the wake of the Covid-19 pandemic.
The survey shows many small businesses are unsure about how to tap into overseas trading opportunities. Over a quarter think they’re too small to export, one-fifth think there’s no demand for their products outside Europe, only 21% said they’re planning to sell products or services overseas in the next 12 months.
Looking particularly at China, the world’s largest ecommerce market, only 7% of small British businesses with export plans are eyeing China as their next international market, versus 23% who’d consider Africa, 37% North America and 52% Europe.
What type of SMEs have succeeded in China?
In the report Alibaba give examples of SMEs who do successfully export to China. Whittard of Chelsea and Vitabiotics (led by Dragon’s Den investor Tej Lalvani) might not resonate with your understanding of what a small business is, but one example in the Alibaba report caught my eye – Hawkins & Brimble who only have 10 employees and are a mens’ shaving, beard and skincare collection.
Hawkins & Brimble are on track to sell more than two million pounds worth of stock to China in this calendar year alone. They even had to charter two freight planes to transport products to China ahead of the 11.11 Global Shopping Festival, to ensure that they were able to meet demand.
Stephen Shortt, Founder of Hawkins & Brimble goes as far as saying that in many ways, with the UK market being so dominated by the big four supermarkets, it’s sometimes easier to sell their products in China, than it is in the UK.
Are you a brand?
What is clear is that regardless of the size of an SME, either large or small, what is needed for success in China is to be a brand – preferably for the UK a distinctly British brand. No amount of live streaming and social engagement is going to help if you don’t have a story to tell and this comes from building a brand identity.
Perhaps only 7% of small British businesses plan to export to China as their brand identity is the missing link? If this is the missing part of the export to China conundrum, it’s probably a piece that would also increase your brand engagement at home. If there’s one thing you have on your todo list for 2021 make it identifying what your brand means and creating your brand story.