Partner Article

HSBC on international opportunities

Tony Leech, HSBC’s senior corporate banking manager in the North East, talks about opportunities in international markets.

Using the terms ‘emerging’ and ‘developed’ nations is commonplace in businesswhen discussing international trade, but HSBC’s latest Global Connections report finds these markets are not as clear cut as they used to be, with rapid economic changeimpacting markets differently. Therefore, the way business leaders use and think ofthese terms must also change.

HSBC’s Global Connections report, which studies international trading trends overthe next 15 years, has found that ‘emerging’ markets have created sophisticated and powerful global trading capabilities. Growth in markets such as Asia-Pacific andLatin America is so rapid that the balance of power is predicted to shift, with these markets set to grow their imports faster than their exports by 2026. This represents a significant trading shift for some of these traditionally export-led countries, as theymove instead towards becoming net consumers.

The creation of new trading routes, or trading corridors, presents considerable growthopportunities and UK organisations need to review how to make their business relevant to these markets in light of these changes. Global Connections predicts theUK’s most lucrative export partners over the next fifteen years will be Brazil andChina, at annual export growth rates of 6.9% and 5.6% respectively, and businesses would benefit from conducting thorough market research into whether there aregrowth opportunities in these, and other, fast growth markets.

While many organisations will already have a foothold in one or more emerging markets, reaching out to new customer bases, expanding into new geographicallocations and analysing the way competitors are approaching internationalising their offering are all ways to further expand and grow businesses that are already successful overseas.

Sharing experiences with peers is always extremely valuable, and in the case offurther international expansion speaking to fellow business leaders already active in any new potential target markets will enable a business to both learn from otherorganisations’ success but also identify unforeseen pitfalls. Working closely withtheir bank around international expansion plans will allow a business to ensure they have appropriate funding structures in place to support both their domestic andinternational working capital requirements, while also considering any invoice financelines or specialist trade finance required.

Considering international business growth presents exciting opportunities, but can equally be a daunting prospect for a company, regardless of sector or size. The great business risk in the future however will be for those businesses that don’t react to therapidly changing global economy. With so many prospects available for businesses beyond the UK’s borders, now is the time to act.

This was posted in Bdaily's Members' News section by HSBC Bank Plc .