By Siddharth Shankar
Exporting can be a key way to grow your business and Asia is an increasingly strong market for British products. UK exports to India grew by 31.8% and to China by 15.3% in the year to March 2018. However, there are a number of myths about exporting to Asia that can make UK businesses cautious about striking new trading relationships within the region. It’s important to bust these if UK businesses are to fully exploit this potentially lucrative exporting opportunity.
- The costs are prohibitive
Due to the distances involved there is a perception that exporting to Asia can be a very costly exercise, in comparison to exporting to fellow EU countries. However, in reality, the lower cost of operating in Asia allows western businesses to enter these markets at a reduced cost. This also helps to minimise the risk associated with entering a new export market.
- The infrastructure is a barrier
There are often concerns about whether the infrastructure in some Asian countries is robust enough for UK businesses to distribute goods efficiently and effectively. However, the infrastructure is fast improving across Asia and, further to this, comparatively cheap costs of warehousing and logistics mean that it’s becoming more and more feasible for UK businesses to operate in Asia.
- Intellectual property is at risk
There’s no getting away from the fact that there are serious issues surrounding protecting intellectual property in Asia. Neither the law nor the level of protection is constant across Asia and often doesn’t meet Western standards. Registering a trademark can be fairly straightforward in certain Asian countries and a time-consuming process in others. However, this is improving and systems in Asia are becoming more standardised, as can be seen from the adoption of IFRS and Corporate governance codes by many countries across Asia.
- Cultural differences can make exporting tricky
There are, of course, linguistic and cultural differences between Asian countries and the UK. However, the right team can help you navigate these successfully. A trusted translator is of course key. Finding a local partner can also be a good way to circumnavigate any tricky areas and help overcome linguistic or cultural obstacles.
- China is the only market worth focusing on
It’s key to look beyond China to other Asian countries, which can also offer strong, unrealised trading opportunities. This is especially important given the ongoing US-China trade war and the news that the IMF has downgraded China’s growth forecasts. It’s crucial for UK businesses to expand their horizons. India’s GDP growth rate is almost double that of China’s, for instance. Furthermore, different Western goods are in demand in different regions within Asia and it’s essential to consider this carefully.
- One size fits all
One thing to watch out for when exporting to Asia is that often companies rebrand a product for the Asian marketplace but forget that marketing and PR activity needs to be tailored to individual regions within Asia. It’s key to remember that the shopping habits of a Korean housewife are completely different to a Chinese schoolgirl’s. It’s important for any exporter to understand that each local market is separate and treat it as such. Again, working with local partners in each country can help UK businesses make a success of this.
- Go big or go home
Contrary to popular belief, you don’t need to be a big brand to be successful in Asia. Brands like Burberry, MG motors, Rolls Royce and Dyson have taken countries like China, India and the ASEAN by storm, but smaller British brands are beginning to gain traction too. The reasons behind the demand for smaller British brands are more complex than a show of wealth, which can be the motivation behind bigger brand purchases. A big brand product, such as LV or Coach, that people purchase and show to friends and colleagues might demonstrate the owner is rich. But a British brand, even one which is not well known, might convey that the owner has taste. This is the new generation Asian middle-class consumers’ mind set.
Siddharth Shankar is a leading expert in trading with Asia and CEO of Tails Trading, an innovative new solution helping UK SMEs to export their goods to Asia. Visit www.tailstrading.com to find out more.