In the UK, where over 1,100 companies were surveyed, SME exporters are more optimistic than the average, with 42% of companies expecting export volumes to grow and 45% expecting them to hold stable.Download the full 2015 SME Research whitepaper here
UPS conducted the research over the summer of 2015, asking 10,717 SME owners or directors about their exporting attitudes, habits, fears and expectations. Interviews were conducted in: Belgium, France, Germany, Italy, the Netherlands, Poland and the UK. We then selected 200 companies from each market for further in-depth research. All the main industry sectors were covered: Industrial Manufacturing & Automobile, Retail, High Tech and Healthcare, as well as sub sectors such as agriculture and mining.
Not only has the research provided new insights that we’ve put together in a report that we can pass on to other exporting SMEs, but it has also helped us to see what kind of help exporting businesses are looking for.
Cause for optimism – particularly in the UK
Perhaps unsurprisingly, the research showed that exporters are outperforming those businesses that rely solely on domestic trade and there’s plenty there to encourage others to look for growth by finding new markets overseas.
They also showed that Europe’s smaller companies tend to be fairly bullish about growing their exports in the coming year, with 90% of SMEs expecting export business to be stable or growing.
In the UK, where over 1,100 companies were surveyed, SME exporters are more optimistic than the average, with 42% of companies expecting export volumes to grow and 45% expecting them to hold stable.
There are good reasons for this optimism. The UK has the highest proportion (61%) of SME exporters reporting higher revenues over the last three years, and almost the lowest proportion (11%) reporting lower revenues.
The UK has Europe’s second highest percentage of exporting SMEs - 17%, just 1% less than Germany.
Drivers and concerns
One characteristic that UK SMEs do share with most of Europe is that they are likely to enter export markets primarily due to customer demand.
“European SMEs are increasing their exports and expanding to new markets as they continue to grow their business,” says Cindy Miller of UPS Europe. “What is remarkable is that it’s their customers who often push them to start exporting. Perceived and real export barriers are holding many SMEs back until customers contact them for an export order. European SMEs are benefiting from export opportunities, especially in times of booming e-commerce.”
How and where do SMEs export?
The report looks at sales channels, and finds that Europe is seeing very rapid adoption of online commerce among SME exporters, with increases of up to 52% in 2015. The UK’s SMEs are the second most likely to use online channels for exporting (70% of companies) – with only the Netherlands having a higher proportion of SMEs exporting online.
Even the automotive sector, which still values traditional sales channels such as telephone and face-to-face, has embraced the internet and SMEs generally are seeing the value of a strong online presence. Companies are now selling more online than through any other channel across all markets.
As ecommerce takes hold, SMEs are learning to deal with problems both perceived and real, and companies are now less concerned about online security and phishing than they are about transportation and speed of delivery.
As for markets, most EU SMEs are doing business within the community. The UK is the most likely of all countries surveyed to export to the US, and does more trade with Africa, Australasia, Asia including China, and the Middle East.
The ongoing movement towards global supply chains means that almost three-quarters of SMEs are shipping to businesses in these countries rather than directly to consumers (although the UK is slightly more consumer-focused than most of Europe).
The corporate sample for this study was created by Dun and Bradstreet, made up of businesses from: Industrial Manufacturing & Automobile, Retail, High Tech and Healthcare. For the purpose of this study sub sectors such as food producers, textile, milk producers, chemicals, cafes, bars and restaurants were excluded alongside main sectors including agriculture, mining, and construction.