Credit and Finance, Management
Online SMEs are missing out on the chance to take advantage of the overseas sales boom
Posted on by Cindy Yip
Estimated read time: 3 mins
Just 56 per cent of online small businesses are selling to customers abroad despite the rise in demand for UK products, according to an Ipsos Mori survey conducted on behalf of PayPal. This means almost half are missing out on the international sales boom by not taking advantage of this and only trading domestically. The survey was conducted on over 1,200 SMEs in major online retail markets such as UK, US, France, Germany, Italy and Spain. France and Spain are capitalising on the international sales boom with 64 per cent in France trading internationally and 61 per cent in Spain.
The findings come despite a previous PayPal study suggesting there was higher consumer demand for British goods than goods from any other major European market. An estimated 86.4 million online shoppers from 29 countries bought from the UK in the last 12 months.
Main concerns and barriers to trading overseas
- 25 per cent cited shipping and associated costs as the top barrier to selling abroad
- 20 per cent said customs and duties were a hurdle to international business – on the contrary the most attractive for international shoppers was free delivery
Where are the international sales of UK small businesses?
- International online salesamong UK small businesses are currently dominated by customers closer to home with combined sales to European countries accounting for 61 per cent of total cross-border value.
- North America is the UK’s second largest market generating 20 per cent of UK online sales
- Asia comes in third with 6 per cent of international sales
Whilst UK online sales show supply to Asia as the third largest international sales market, from the survey of 29 countries, it’s evident we aren’t selling in line with international demand. China is where the demand for British goods is at its highest, with an estimated 21.9 million online shoppers in the world’s second largest economy purchasing from UK retailers in 2015. Despite this spike in demand, only 15 per cent of the UK online businesses surveyed sell to Chinese shoppers, of those that do, only a mere 5 per cent list Yuan as a currency option for payment.
Small changes and adaptations of your business and marketing strategies can help to engage international online shoppers. More than a third (38 per cent) of buyers use a search engine when purchasing from abroad so it’s important to get to grips with Search Engine Optimisation (SEO). It can also help if you use alternative or local social media networks such as WeChat, which isn’t popular in the UK but attracts huge followings in other markets. As online international sales continue to grow with many more opportunities to sell overseas, small steps taken by UK online businesses could help them to reap big rewards in the future.