Picking the right overseas market

Exporting can offer a fast track to growth, but where do you start?

Exporting can offer a fast track to growth, but where do you start?

Exporting can offer a fast track to growth, but where do you start?

Light supplier Abacus is no stranger to entering new markets, being one of the first UK businesses to trade with China in the 1960s. Since then the company has maximised its presence in the global powerhouse, opening a subsidiary in 1996 and currently building a new factory that will double production capacity.

Kelly Herrick, Abacus’ marketing manager, says: ‘Emerging markets are really important for us, particularly ones where there’s a potential for infrastructure development. When roads and airports are being built they will require lighting. This tends to be followed by more contracts for leisure-based constructions, such as [sports] stadiums. We’ve used that model effectively quite a few times. It definitely pays to keep an eye on global developments.’

Stuart Dunbar, managing director of Oak Express, buys food from manufacturers which he repackages to sell in overseas markets. He agrees that emerging markets offer some of the best export opportunities: ‘In places like China there’s definitely a growing appetite for Western products.’

Dunbar says the East offers more promise than the beleaguered Western economies. ‘It’s often much quicker to get an appointment with a large supermarket chain in the Far East. You can make a proposal and be seen the next day, whereas in the West it can take up to four months.’

Equally important is knowing when a market should be avoided. Oak Express’ Dunbar comments: ‘We’d always avoid countries where it’s difficult to get credit cover. In places like Yemen and Nigeria there can be problems with corruption, which sometimes makes it difficult to know who to trust locally. So we’d also steer away from these places.’

Another mistake is to spread yourself too thinly, says Ian Brown, managing director of wireless coverage provider Axell Wireless. ‘In some countries our share is just 2 per cent of the market, so that’s something we’ll look at improving on first.’

Well connected

In the digital age finding suitable markets needn’t involve racking up a lot of air miles. Jack Ostrowski, managing director of clothing company Yellow Octopus, exports products to 16 countries and says: ‘We’ve used the internet to research markets and then targeted areas by advertising through trade papers and direct emailing. We don’t go over to the countries to pitch for business. In fact, there are plenty of clients we have never seen.’

Ostrowski is in no doubt that his company’s buoyant market position is down to rapidly expanding exports, having recently won the prestigious Queen’s Award for Enterprise and International Trade. ‘We have a lot of clients based in Eastern Europe. As that’s an expanding market, for us the recession has just been something we’ve heard about on the news,’ he says.

Brown of Axell Wireless has identified expansion opportunities in numerous markets, recently seeing his company hit sales of £35 million. He says the firm’s double-digit growth comes entirely from abroad: ‘We have ten offices around the world and the key to our success is to employ local people and build relationships with customers.’

In the know

Abacus’ Herrick agrees that success is down to good partnerships. ‘We always look for [sales agents] who are nationals and so understand the cultural dynamics. Normally we go for people who act as agents for other products so we can benchmark their performance. It’s also important that they don’t distribute our competitors’ products as that can lead to conflicts of interest.’

According to Axell’s Brown, employing agents is only a first step. ‘We normally start by using a couple of agents and if it seems like we are just scratching the surface in a growing sector, we make the decision to jump in,’ he says. ‘We’ll then use an international recruitment agency to interview and hire sales staff.

‘People like to buy from someone who speaks the same language. We do get some success from agents, but without a sales team you miss out on the bigger opportunities.’

Nick Britton

Lexus Ernser

Nick was the Managing Editor for growthbusiness.co.uk when it was owned by Vitesse Media, before moving on to become Head of Investment Group and Editor at What Investment and thence to Head of Intermediary...