Small and medium-sized online retail businesses in the UK are expectant of higher international sales in 2015, Royal Mail’s annual tracker survey has found. Reportedly, 65% of UK SME online retailers are aiming to increase international sales in 2015, up by nearly two thirds on a year ago when 39% said they were planning to increase overseas sales. 84% of companies surveyed said they plan to target new countries they do not currently sell to - indicative of the ever-more globalised business landscape which even the smallest firm are operating.
The United State has overtaken Europe as the top target for online retailers looking for new international markets. 39% of SMEs surveyed said they would be targeting the US market this year, up from 23% a year ago.
The US economy is forecast to grow at 3.6% in 2015 compared to 1.2% in the Eurozone. The dollar has also been steadily growing stronger since July, strengthening to $1.51 to the pound from $1.72 at the start of July 2014. During the same period the pound has strengthened against the euro from £0.80 to £0.75 and the euro is likely to be further devalued by the European Central Bank’s 18-month programme of quantitative easing which begins next month. Consequently it has become more attractive for UK producers to export to the US as opposed to the Eurozone.
The study found that Canada ranked third in new international target markets for UK online retailers and that, despite the falling value of the Rouble, 15% of SMEs said they would target Russia this year, up from 9% last year.
Online search activities and targeted direct mail or catalogues were ranked by SMEs as the best ways to create new sales opportunities. 56% of UK SME exporters said they plan to invest in online search improvements to help win new international business, up from 32% from 2014. Meanwhile, 47% of SMEs surveyed said they would use targeted direct mail or catalogues, a 10% rise on the previous year.
Nick Landon, Managing Director of Royal Mail Parcels, said: “Royal Mail’s annual tracker study of UK SME online retailers shows that there is growing confidence that they can grow international sales.
There is a marked increase in the percentage of UK SME online retailers aiming to grow international sales in 2015, compared with 2014. The study found that UK SME online retailers believe there is strong potential in the USA, which has overtaken Europe as the top target for businesses looking for new international markets.”