UK based companies will in the coming years be granted a massive opportunity to boost their eCommerce exports to Europe and beyond, concludes a research from OC&C Strategy Consultants in collaboration with Google. In order to capitalise on this opportunity, firms will need to adopt a global strategy, prioritise their efforts, embrace digital tools and learn from best practices in the marketplace that excel with ‘future-proof’ business models.
Historically markets have been encompassed by geographic limitations, distance, oceans, hospitability, etc. In recent years however the internet has simplified a broad range of information exchange, for businesses that trade in knowledge, for instance, the other side of the world is merely a two second email away. But also other businesses – whether big or small, old or new, and in a wide range of industries – have a huge audience at their fingertips.
According to research from OC&C Strategy Consultants, UK businesses in four sectors alone – travel, retail, leisure and content – can in the coming six years see their eCommerce export grow by £32 billion, from £13 billion in 2013 to an expected £45 billion in 2020. The potential is driven by a range of factors, including globalisation, growing internet penetration across the globe, and more international search traffic. “Internationalisation used to be very capital intensive but eCommerce has meant that it is now quicker, simpler, more economical and therefore lower risk for companies to test out new markets. We estimate that international search traffic will quadruple by 2020, so there is a huge opportunity for UK companies who want to capitalise on international expansion online,” explains Anita Balchandani, Partner and Head of Retail at the UK-origin consulting firm.
Priority is key
For firms contemplating capitalising on the potential, the consultants have an advice: prioritise your market entry strategies. Not every market is as easily accessed or as lucrative. OC&C identifies the most lucrative markets for expansion to be the US, Brazil, China, Russia and Mexico. There are however challenges associated with expansion into these markets. In the case of Russia for instance the language barrier and established local business make entry difficult.
Other recommendations include embracing digital tools and learning from best practice businesses in the marketplace, with Booking.com, eBay, Spotify and Airbnb a few examples of such players. Another area considered key to unlocking a business’s full expansion potential into new markets is knowledge of those markets. To make this easier, OC&C and Google have released so-called ‘Export Business Maps’ – one page overviews that in a nutshell presents key aspects of foreign markets and consumers. Data includes among others a seasonality calendar, a section with a breakdown of fundamental facts for each country, information about search and display, an overview of mobile behaviour as well as location specific information related to local taste. An example:
“We hope the Google Export Business Map will help UK businesses to capitalise on the £45 billion opportunity, inspiring them to think beyond their local markets and grow quickly and strategically,” says Peter Fitzgerald, UK Country Sales Director at Google.