Throughout the previous 12 months, UK businesses have faced a battle on two fronts.
Firstly, many business strategies were clouded by the fog of Brexit uncertainty, as officials battled negotiations whilst offering little clarity regarding the potential outcome. Even when a deal was agreed upon a week before the Brexit deadline, companies had precious little time to make any practical preparations. As such, sudden changes to customs processes, as well as import and export charges caused major disruption for businesses across all sectors.
On the other hand, the COVID-19 pandemic imposed further pressure on businesses’ resources, as they struggled to comply with social distancing measures to keep employees safe, whilst safeguarding their post-pandemic survival. It comes as little surprise, then, that almost two thirds (64 percent) of businesses claim that a combination of COVID-19 and Brexit made 2020 their hardest year on record, according to research from One World Express.
The beginning of 2021 offered organisations little respite. Indeed, recent ONS figures highlighted UK trading with EU partners fall by 23.1 percent in the first quarter of 2021, when compared to Q1 2018 trading, as a direct result of Brexit and COVID-19.
Such figures are arguably to be expected. After all, the lack of information around customs changes, as well as the new charges incurred when trading goods between UK and EU businesses was unlikely to prompt an influx in trading. And whilst One World Express’ aforementioned research revealed that 56 percent of UK organisations plan to continue trading with their current EU partners despite these changes, this still leaves a significant minority unsure about their future relationship with the Europe. Indeed, evidence suggests many are re-evaluating their trading options and eyeing possible lucrative opportunities beyond the EU.
The One World Express study revealed that over two fifths (45 percent) of business leaders are keen on expanding into overseas markets outside of the EU over the coming years.
Such optimism for forging new international trading partnerships is not baseless. After all, as a recent survey conducted by Barclays revealed, consumers in the USA, South Africa, India, China and UAE all expressed a willingness to pay a premium for products produced in the UK. In India and UAE, some buyers were willing to pay respective premiums of 11.8 percent and 10 percent for British products. The willingness to pay more certainly suggests that “Brand UK” enjoys a strong international reputation for high quality.
Further, it is becoming easier for UK businesses to meet this rising demand, thanks to the ascent of eCommerce, particularly throughout the pandemic. For example, India is on the verge of a cross-border commerce ‘explosion’, with the country’s eCommerce market expected to be valued at $99 billion by 2024. As such, it is incredibly easy for UK-based companies to tap into this potentially lucrative market, via online marketplaces.
Of course, the EU will continue to be an important trading partner to the UK; as a trading bloc, it’s too large, and too geographically convenient to overlook. That said, the growing strength of “Brand UK” within wider international markets present very interesting opportunities for UK businesses. And with the rise of eCommerce in various international markets, new and lucrative prospective buyers have become far more accessible. As such, I would expect many more British companies to set their sights on markets beyond the EU in the months, and indeed years, to come.
Atul Bhakta, CEO, One World Express
Atul is a creative entrepreneur who has led the One World Express vision for 20 years. He also holds senior titles for other retail companies, underlining his vast experience and expertise in the world of eCommerce, trade and business management.