Member Article

Brexit: An opportunity for businesses to grow outside the EU

Uncertainty looms large for UK-based retailers post-Brexit. The easy option for companies would be to bury their heads in the sand, but the throw-away comment of “we still have time” no longer applies. While it’s difficult to plan for what lay ahead, there are still a number of steps that SMEs and retailers can take in preparation for Brexit, which coincidently happen to be about planning for international expansion.

Keeping that in mind, companies should view Brexit as an opportunity rather than a burden, as it will enable them to assemble a plan of action that can facilitate growth and allow them to do business in marketplaces and fast-growth regions they are yet to even consider. Provided they treat delivery as an integral component to growth.

Britain’s trading relationship with the EU is uncertain. Online retailers should start thinking about growth opportunities outside of the EU, as well as with key marketplaces like eBay, Etsy or Alibaba. This may seem daunting for SMEs, but the companies that do their due diligence and organise delivery operations accordingly will flourish in the years to come.

Where to look for international expansion

There’s no doubt that Brexit will force some logistical challenges within EU regions. With free trade between the UK and EU unlikely, new tariffs will be imposed when delivering into and out of these countries, which will increase the cost for companies and customers alike. Additionally, businesses that manufacture or source products will need to consider regulation on a country-by-country basis, further lengthening the delivery process.

As trading within the EU is set to become more challenging, businesses would do well to start targeting strong marketplaces and emerging regions of rapid eCommerce growth, such as Russia, China, and Brazil. SMEs could see significant growth to their business if they have the right approach and partner to help maximise their success in these regions. This is a huge growth opportunity given that retail spend in this area was priced at $1.47 trillion last year, with 90% of that concentrated in the top five marketplaces, three of which are in China. The trading obstacles Brexit will raise within the EU provide a great incentive for companies to explore international expansion.

Mitigating risk in the EU post-Brexit

With new duties and taxes to contend with when delivering to countries in the EU, customers will have to pay more for delivery following Brexit, and companies need to figure out how to best cope with the additional expenses. For instance, customers will not appreciate unexpected charges when making a purchase – with research from Baymard institute indicating that a lack of transparency is responsible for as much as 24% of all cart abandonment. As such, it’s vital that companies ensure they are clear with their pricing and have software capable of being completely transparent with respective delivery costs at the point of checkout. If retailers make checkout easy to use and put all the relevant delivery information in one place, customers are more likely to go ahead with the transaction.

Businesses will also need to be aware of the various regional complexities that delivering to new countries will bring, as well as the changes enacted by countries they already deliver to. For example, businesses shipping to Saudi Arabia would need to take in to account the cultural preference to ‘pay on delivery’ rather than at checkout. International nuances like this are precisely why it’s important for companies to partner with operations and logistics end-to-end advisors that can fill gaps in their expertise. Each region will have to be dealt with separately in terms of tariffs and delivery approach, and companies need to be wise to this. Support should also be sought to help navigate the lengthy admin processes that border control will bring, to make sure that it’s not a drain on company resources and reduces the delay to the supply chain.

Looking to minimise risk in the EU post-Brexit, by way of carrier management and logistics upgrades is not something to be frowned upon. In fact, in many ways, it’s the prompt many businesses have needed to take steps toward international expansion. A steady hand is needed in the form of carrier management in order to provide advice and expertise on the key obstacles SMEs will encounter in a post-Brexit world. The costs and admin may prove an initial challenge, but by putting delivery at the heart of their growth strategy, Brexit may come to be seen as a business opportunity.

This was posted in Bdaily's Members' News section by Dan Ennor .