INTERNATIONALTRADE
E-commerce boom imminent in the Middle East By embracing digital transformations businesses can increase their revenue by up to 30 per cent – countries across the Middle East are already seeing the benefits of using technology to diversify their economies. The Internet of Things, big data, predictive analytics and mobile technology are quickly evolving into core elements of business and the region is starting to see a genuine e-commerce boom. As one of the fastest growing regions in the world, the Middle East’s economy is expected to exceed US$ 30 billion by 2018. This new digital economy accounts for around US$ 450 billion of the global GDP from traffic and trade flows per year, so it’s a great time for British businesses to explore this market. Two e-commerce platforms to take notice of: MarkaVIP The largest fashion and lifestyle shopping destination for the Arabic speaking world offering everyday lifestyle and branded products to Middle East and North Africa (MENA) region. Live in 8 countries with 5 million members. SPREE.COM SPREE is part of the Naspers Group and is based on a shoppable magazine format leveraging their extensive media and publishing assets in Africa. Category focus for UK brands are apparel, home décor, beauty and gifting.
Brics Nations Launch Development Bank By Jonathan Davies
The Brics nations have launched their New Development Bank (NDB) in Shanghai. Brazil, Russia, India, China and South Africa (Brics) some of the world's fastest growing economies launched the bank to support developing nations with infrastructure projects. The first loan is expected to be issued next year. The Brics nations say the NDB is not a rival to the World Bank or International Monetary Fund (IMF), however many analysts suggest it is. "Our objective is not to challenge the existing system as it is but to improve and complement the system in our own way," NDB President Kundapur Vaman Kamath said. The Brics countries have previously crticised the World Bank and IMF for not giving developing nations enough voting rights
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ThinkingBUSINESS August - September 2015
New to Exporting?
Top 5 risks UK Firms need to consider By Marine Bochot, UK head of risk at Euler Hermes
Foreign trade has always been a cornerstone of the British economy, and with economic growth facilitating a rise in business confidence, the number of firms exporting is on the rise. This is particularly visible among the SME sector. According to a recent report from YouGov, the number of SMEs expecting to export in 2016 is growing and those already trading overseas are looking to expand the number of markets they trade in. However, exporting does not come without risk, and for many firms new to foreign trade it can be a steep and difficult learning curve. Businesses should be cautious and ensure they avoid the pitfalls and financial problems from trading abroad. However, keeping the following five factors front of mind for each current and future export market will help pave the way to export success.
1. Currency fluctuations Fluctuating exchange rates are particularly difficult to budget for, and shifts can significantly impact product demand in foreign markets should prices be pushed up, swallowing profits and putting pressure on bottom lines. The current strength of the pound is having a marked impact on UK exports, particularly across the Eurozone, and firms should keep a close eye on currency changes across all their respective markets and adapt product strategy accordingly.
2. Trade barriers Both EU and international markets have seen recent growth in
protectionism, with trade becoming more segmented as advanced economies move to preserve market share in the wake of growing involvement from emerging nations. In light of this, trade-restrictive tariff barriers are growing in number, which can have a negative effect on specific products margins in certain countries – for example, Turkey recently raised customs duties on imported footwear by 50 per cent. Firms should also keep an eye on non-tariff measures when assessing current markets. Many countries are increasingly imposing national standards regarding product quality, security, food safety or environmental protection to protect home-grown producers.
3. Geo-political risk Political instability at export destinations can either disrupt or, in some cases, prevent the completion of an export contract. Companies trading in these markets risk contractors defaulting on payments, exchange transfer blockages, property confiscation and changes in government policies. These may include local trade embargos which will affect both the flow of goods and accrued revenue.
4. Payment cultures UK firms must have a tight grasp of the payment cultures that exist across global markets as they are likely to
differ significantly from what they are used to. Longer and more
segmented payment terms are possible, and businesses may be required to reassess their financial structure, particularly supplier payment contracts, to adjust accordingly. Firms that forget this and continue to rely on a certain Day Sales Outstanding (DSO) figure for receiving revenue may find themselves in difficulties.
5. Legal risk There can be major differences in law across different markets, and firms need a good understanding of how these could affect their ability to successfully export their products or services or recover monies as securities operate very differently - ROT for instance. It is particularly important not to assume legal processes will be the same as the UK when entering into contractual arrangements. Expanding export operations can bring a business many advantages, such as increased sales, opportunities for more balanced growth, more employment and bigger profits, but firms must be vigilant about the potential risks and take the appropriate measures to protect themselves.
Who is the CEE Business Portal?
The CEE Business Portal is your go-to source of market sector, event and business opportunity information for British business in Central and Eastern Europe. The CEE Business Portal serves as a central point of contact for the UK government, Export Britain, and the six CEE Chambers of Commerce involved in the Overseas Business Networks initiative (OBNi). We seamlessly connect British business and investors to mid- and highvalue business opportunities, British Chambers of Commerce members abroad, valuable market sector
information, and integral events, news, and business resources. By working with our partners in the United Kingdom and the CEE alike, we aim to provide a streamlined extra layer of support for British business looking to expand abroad. We are dedicated to assisting British companies enter the CEE market or solidify their presence therein by
connecting them to key players in the region. The CEE Business Portal aims to facilitate the distinctive roles of the UK government, Chambers of Commerce and SMEs in today's business market.