Top overseas markets to consider for global expansion

One of the keys to success in international trade is choosing the right markets for your goods or services. It’s important to have a well-thought-out plan and market strategy to maximise your chances of international sales success. 

It has been proven that businesses are 11% more likely to survive and thrive if they export and entering overseas markets can boost turnover while improving innovation as businesses adapt and create new products to suit different market needs.

The Export Academy has recently been introduced as part of the UK Government’s levelling-up agenda, equipping small and micro businesses in the South West of England with the know-how to sell to customers around the world with confidence. The latest edition of the free 10-part events programme started on 25th October 2021 and will run until end of March 2022. Businesses can join the programme at any time and a full list of the sessions and the link to apply can be found here.

Selecting the right market can be tricky and businesses often don’t know which to prioritise, but we’ve outlined a few of the top markets for UK exporters to consider and the opportunities they can offer.

Japan

japan_city.jpg

Japan is the third largest economy in the world with a GDP of $5.18 trillion. Japan was the UK’s 11th largest trading partner in the four quarters to the end of Q1 2021, account for 2.1% of UK trade.

Late last year, the UK officially signed an economic partnership agreement with Japan, bringing together two of the world’s most technologically advanced nations. The estimated boost to trade between the UK and Japan is over £15 billion, which is a crucial economic benefit to help businesses ‘build back better’ from Covid-19. 

The new deal with Japan is expected to benefit UK companies across a range of industries, such as agriculture, food and drink, manufacturing, digital and financial services.

Japan has an advanced economy with an educated and wealthy consumer market who are experienced in using new products and services. The food and drink market is very sophisticated and although traditional Japanese cuisine remains an integral part of national identity, Japanese consumers enjoy a diverse range of food and drink, valuing the stories behind products. 

Technology is also a huge market in Japan, being home to world-renowned technology companies including Sony and Fujitsu. There is strong demand for UK digital exports and within the new UK-Japan agreement, new provisions have been agreed on in terms of issues like source code protection and net neutrality. This will create new opportunities for UK tech firms. 

Little Pod, producer of vanilla, coffee and chocolate extracts recently achieved an export deal of over £700,000 in Japan with DIT’s support. Janet Sawyer, the company’s founder said:

“Get in touch with DIT, seek an adviser and build a relationship with them. Karine understands LittlePod totally and I have had her complete backing and support. 

“We were lucky enough to find a distributor and importer all in one visit. It can take up to five, so don’t expect to achieve this straight away. But with DIT’s contacts and strategic support, as well as our own hard work we have achieved great success in Japan.” 

Canada

Canada was the UK’s 17th largest trading partner in the four quarters to the end of Q1 2021 accounting for 1.5% of total UK trade.

The UK and Canada have a close trading relationship, with a Trade Continuity Agreement recently being signed on 1 April 2021. 

There is huge opportunity for UK companies across a broad range of industries. The UK and Canada share the same language and have similar cultural traits, including similar tastes in food and drink. There is also a demand for premium products and as the UK has a formidable reputation for high quality food, there is much opportunity in this sector. 

The Canadian government is in the midst of planning public infrastructure improvements, presenting opportunities for UK companies to enter a market with a range of opportunities in this area.

There is also a thriving business services sector in Canada and new investors will be assisted by deep supply chains and supporting infrastructure. 

Ashortwalk based in Cornwall was supported by DIT to export to Canada. Simon Dicker, the company’s Sales Director said:

“Use DIT as much as possible, it has been a great help. There is a lot resource there that can be gained through grants or is free at the point of service. I would advise any company looking to be more proactive from an export point of view to get in touch with them – you never know which doors could open.” 

USA

hilary_self-min.jpg

The United States was the UK’s largest trading partner in the four quarters to the end of Q1 2021, accounting for 16.7% of total UK trade. 

UK products and services have a strong reputation for quality in the US so there is plenty of opportunity in this market for businesses looking to grow.

The US also ranks 8th in the World Bank’s Ease of Doing business, however there are regulatory requirements that DIT can support your business with. 

Hilary Self, founder of Hilton Herbs, producer of natural supplements for animals based in Somerset was supported by DIT to export to the US. She said:

“The most important thing is to get your ducks in a row. Do the groundwork first so you know exactly what you are looking at. Secondly, you need to find out what the legal issues are for the products that you’re exporting. 

“Try and get to the country and go to the trade shows, even if you are just wandering around because then you get an idea of the competition. 

“Also, get yourself a distributor, try and find someone who can get the products distributed around the country quickly. Back in 2009 we set up a fulfilment centre in the US so we had a place we could ship to and get orders out fast.”

There are opportunities for exporters in a range of markets. The US is the largest tech market in the world, representing 31% of the global market. With UK tech industry growing tenfold in the last decade, this presents many opportunities for UK tech companies. 

The US is also the UK’s third largest market for Food and Drink exports, totalling £1.9 billion in 2020. 

Australia

tom_de_pelet.jpg

Australia was the UK’s 20th largest trading partner in the four quarters to the end of Q1 2021, accounting for 1.2% of total UK trade. 

Australia is the 14th largest economy in the world and the country shares a common language with the UK and similar business and legal practices including intellectual property (IP) protection and the rule of law.

The UK and Australia have expressed their intent to achieve a modern, ambitious trade teal and signed an Agreement in Principle this summer. This makes it an attractive market for UK companies.

Australia has been said to be the ideal test market for UK exporters. It’s a sophisticated, wealthy and tech savvy market. Its market of 25 million people, including one million Britons, mean it is a good market to test new products or services.

Hornit, producer of bike products based in Exeter has recently exported to Australia. Tom de Pelet, the company's founder, said:

“Our growth in the Australian B2C market has been largely supported by DIT and we’ve seen growth in just 6 months. The Australian website launched in March 2021 has already generated USD 50,000 in revenue.

“We would advise finding the right distribution partner. Ideally someone who is already active in the market with the right contacts and critically one which can pay you on terms to match the terms you have with your factory to prevent any cash flow issues.

“Finally, get in touch with DIT as they will be able to support you to develop a strong export strategy.”

Get in touch

The Department for International Trade can help you get started on your export journey today. Just contact 01275 774 456 or visit www.great.gov.uk to find out more about the range of support available as well as live export opportunities. DIT’s services in the South West are delivered by Business West. For further information, click here.