Supply chain · 6 April 2016

Britain’s small online businesses fall behind European rivals on international sales

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Demand for the products of the UK’s small online businesses was found to be highest in China

Only half of Britain’s small online businesses are selling products outside of the UK, despite huge demand for British goods around the world.

New PayPal research has found that just 56 per cent sell to foreign customers, even though 86m international consumers bought from Britain during 2015.

In a sign that reducing logistics costs could be the key to unlocking international online sales, a quarter of the small firm owners surveyed by PayPal said that shipping costs were the biggest barrier to cross-border selling, whilst customs and excise duties were found to be the second biggest concern of business owners.

Conducted by pollster Ipsos MORI on behalf of PayPal, the survey questioned over 1,200 smaller venture owners in major online retail markets across Europe. The results demonstrate that more businesses capitalise on international sales than in France and Spain than in the UK, with 64 per cent and 61 per cent of the two countries’ small online firms selling to foreign customers respectively.

The new data comes following earlier PayPal research which discovered an unprecedented demand for British products over and above those of other European markets, with around 86.4m shoppers from 29 countries buying British in the last year.

Commenting on the findings, PayPal UK’s senior director of strategic client services, Simon Moran, said: “Simple changes to your online store such as accepting multiple currencies, offering different languages, and keeping shipping costs low can have an immediate impact on sales.”

Small firm leaders prefer selling online to markets that are closer to home. The survey concluded that combined sales to European countries accounted for 61 per cent of total international sales, with the US accounting for 20 per cent, and Asian markets accounting for just 6 per cent.

“By taking some small steps, UK online business owners could reap big rewards as online international sales continue to grow,” added Moran. “It’s crucial for businesses to adapt marketing strategies when engaging overseas shoppers. Over a third of online shoppers rely on search engines, so it’s important to get to grips with SEO, as well as look into alternative social media networks.”

In a revealing development, PayPal concluded that of the 29 countries surveyed, demand for British products has become highest amongst Chinese consumers. Roughly 21.9m online shoppers bought from the UK retailers in the last 12 months, yet despite the surge, only 15 per cent of small online businesses currently ship to China whilst a miserly five per cent list China’s yuan as a currency option for payments.

Is your micro business considering selling overseas? Our expert’s guide takes a look at eight customs rules that might surprise you, but that you should definitely consider.

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ABOUT THE EXPERT

Fred Heritage is deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London. He previously worked as a reporter at Global Trade Review magazine.

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