ONLINE BUSINESSES FORCED TO LOOK TO EMERGING BRICS AND CIVETS FOR GROWTH
· 60% of businesses have exported more since 2007
Online marketplace, eBay, has revealed that the damaging impact of the Eurozone crisis and domestic inflation on sales has led to half of online businesses (49%) expecting to rely more on export sales more in the future, and 60% of online businesses (58.3%) claiming to have exported more since the recession began in 2007.
A survey of more than 1,000 online businesses has found that over a third (37%) expect BRICS countries to become more important in 2012 due to continued economic stagnation in Europe, with two thirds (58%) expecting the Eurozone crisis to directly result in a slump in export opportunities. Over a quarter (27%) recognise that they need to look further afield to the CIVETS countries (Columbia, Indonesia, Vietnam, Egypt, Turkey and South Africa) to expand their customer base, considered the main benefit of exporting by online businesses.
In the last 12 months over half (59%) of online businesses have exported goods to Russia, and a fifth expect China to be the most important export market after Europe by 2013.
Online businesses have risen to the challenge set by Lord Green, Minister for Trade and Investment, to export for growth by embracing opportunities in emerging markets in the BRICS (Brazil, Russia, India, China) and CIVETS.
To help support the economic recovery, eBay is calling on policy-makers to do their part and improve the advice and support available for businesses looking to expand their sales overseas. Half of the businesses questioned identified friends and colleagues as the most useful sources for providing advice on how to sell overseas compared to only 7% that said they would contact the Department of Business, Innovation and Skills and 6% that would turn to UKTI – the Government’s main export arm. Rather than seeking advice from specialist organisations, 59% of businesses turn to retail platforms such as eBay for advice on international trade.
According to research findings, a third (34%) of low exporters are likely to see the complexity of legal and regulatory regimes as a barrier to boosting export sales, compared to less than a quarter (23%) of high exporters. In addition, a lack of trust in foreign shoppers is a concern for 42% of low exporters compared to only 24% of high exporters, and almost twice as many low exporters (24% versus 13%) see a lack of understanding of foreign markets as a hurdle when selling outside of the UK.
Angus McCarey, UK Retail Director, eBay, said:
“In today’s connected world, businesses no longer need to rely on one market for their income. International trade is more accessible than ever and online businesses in particular are perfectly placed to make the most of selling overseas.
“Cross-border trade represents a massive economic opportunity for the UK, and we know that over half of high exporting businesses (59.3%) are confident about the next six months compared to only two fifths (40.7%) of low exporting businesses. Government and policymakers must do more to ensure services and organisations are equipped to provide expert advice on exporting to all businesses, but especially to those businesses that haven’t given it a go before and are often held back by a simple lack of understanding.”
The Eurozone crisis (51%), public expenditure/tax increases (45%) and domestic inflation (44%) have had the most detrimental impact on businesses capacity to export, however many are still reaping the rewards of international expansion. eBay businessman Stuart Kirkwood, whose company Zest Clothing (1066sales) turned over more than £1million last year, saw export sales make up over 15% of his income in 2011. Stuart and his wife Melinda now export to over 100 countries and consider Eastern Europe as a real area of growth.
“Last year was a great year for our business, but there is no way we would have exceeded our £1million milestone had it not been for the income we received through our eBay export sales. Selling overseas is a great way to expand your businesses customer base and exporting via eBay has allowed us to sell a higher volume of product without increasing our overheads. The internet, the rise of mobile and the growing importance of social media means we are all globally connected consumers. In the current economic climate UK businesses need to take advantage of every opportunity, and the global reach of eBay is an opportunity we intend to exploit.”
 Over a third (38%) of businesses identified ‘ability to expand customer base’ as the main benefit for selling to customers in other countries
 High exporting businesses are identified as those with a GMV (Gross Merchandise Volume) from CBT (Cross Border Trade) over 10%, and low exporting businesses are identified as those with a GMV from CBT less than 10%
Notes to Editors:
About FreshMinds Research
• FreshMinds Research is an award-winning market research consultancy. In November 2011 eBay commissioned FreshMinds research to conduct an online survey with 1086 of the top 10,000 eBay sellers in the UK. The survey ran between 30th of November 2011 - 18th December 2011.
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