Consumers in the U.K. trust U.S. brands, and their economy is ripe for trade with their friends across the pond.
As we discussed in our previous blog on taking your brand global, the United Kingdom represents an attractive entry-point for U.S. businesses looking to export to Europe. The lack of language barrier presents an obvious advantage, as well as the fact that the British are avid online shoppers, and their economy and approach to trade tariffs reflect their openness to imported products, especially from the United States.
UK markets are open for business.
In a recent study of customs duties levied by 18 economies around the world, charted accountancy group UHY Hacker Young analyzed taxes taken from imports relative to each country’s gross domestic product. This percentage represents a snapshot of a countries trade barriers and openness to international trade.
The United Kingdom the lowest of all 18 countries surveyed, with total import taxes equivalent to 0.11% of their GDP. In contrast, other European Union member countries averaged 0.13%, whereas NAFTA member countries (the United States, Canada, and Mexico) averaged 0.2%.
An upcoming referendum vote on the U.K.’s EU membership may affect these numbers, and Matthew Hodgson, partner at UHY Hacker Young, echoes those concerns alongside the published study:
Consumers in the UK are getting a good deal as a result of the low import duty burden on goods from abroad, and businesses of course also benefit from the open competition that comes from being able to export freely across the whole of the EU.
While the UK currently has one of the lowest customs duties burdens in the world, there’s a risk that this could shoot up if it leaves the EU following its forthcoming referendum, and relationships deteriorate. A so-called Brexit [British exit] could jeopardise Britain’s continued participation both in the EU free trade zone and in trade agreements agreed by the EU with third party countries.
So much would depend on what the UK could achieve in establishing a whole new raft of bi-lateral trade agreements, should it vote to leave the EU.
While the effects of the referendum remain to be seen, one thing is still clear: the British love shopping online, and especially love buying goods from other countries. The British are the most frequent online shoppers in Europe, and third in the world behind the US and China. The average shopper spends £1,174 online per year, and continued growth should be expected, regardless of the U.K.’s membership in the European Union.
The right time for U.S. brands.
The cultures of the U.K. and the U.S. benefit from centuries of shared history, forging a strong economic bond. Britain and the U.S. have one of the closest trading and investment relationships in the modern world, with transatlantic trade between the countries totaling $214 billion in 2012. Continued growth is inevitable, especially with the expected arrival of the Transatlantic Trade and Investment Partnership (TTIP), a proposed free trade agreement between the European Union and the United States.
Even without the TTIP, the cultural and language similarities mean a low start-up cost for small-to-medium sized enterprises looking to export to the U.K. Existing marketing materials and branding should be modified to reflect cultural differences (minor though they may be), as well as a few subtle wording changes and imperial-to-metric translations.
The good news is once these changes are in place; it becomes easier to transition to export to Canada (a NAFTA member) as well as Australia. As we mentioned in our previous blog on the subject, the United Kingdom, Canada, and Australia make up roughly half of the global eCommerce market. Beginning with those countries allows your brand to work out the logistics of international trade while sticking to your native tongue and kindred cultures, and build the foundation for an international export empire.
Businesses wanting a international trade business plan between the UK and USA should meet with CMO for Hire Hema Dey. Hema has had extensive experience in international marketing and business development and will be able to put together a comprehensive plan with her team of Global professionals. For more information contact her at Iffel International Inc., firstname.lastname@example.org
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