UK SME online retailers confident about international growth

Confidence is growing among UK SME online retailers that they can grow international sales, a study by Royal Mail has found, with two third of SME’s stating that they are aiming to increase international sales in 2015.

The increased confidence is up two thirds on a year ago when just 39 percent said they were planning to increase overseas sales in 2014. SME online retailers were shown to be in positive mood for the year ahead with seven in ten businesses expecting overall sales to increase, the study revealed, with the ‘optimism for growth’ up 9 percentage points on last year, despite 76 percent of SME online retailers saying competition is more intense than a year ago.

Royal Mail’s annual tracker study also revealed that UK SME online retailers will be targeting new international markets to support their growth, with 84 percent of companies surveyed saying that they plan to target new countries they do not currently sell to.

USA overtakes Europe as the top overseas target for UK SME online retailers

The USA has overtaken Europe as the top target for online retailers looking for new international markets, which might be due to the US economy forecast to grow at 3.6 percent in 2015 compared to 1.2 percent in the Eurozone, according to research by the International Monetary Fund. Four in ten (39 percent) of SMEs surveyed said they would be targeting the country, up from 23 percent a year ago, while 30 percent said they would target European countries.

The study also found that Canada ranked third in new international target markets for UK online retailers and despite the falling value of the Rouble, 15 percent of SMEs said they would target Russia this year. Last year only 9 percent said Russia would be a new target market in the year ahead.

When asked how they were going to win overseas customers, more than half (56 percent) of UK SME online retailers surveyed said that they plan to invest in online search improvements to win new overseas business, up from 32 percent a year earlier. While, 47 percent of those polled said they would use targeted direct mail or catalogues, a rise of 10 percentage points on 2014.

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.”

The research was conducted by Trinity McQueen, an independent research company, on behalf of Royal Mail, and surveyed 300 UK SME online retailers between November 28 and December 9, 2014.