Since Brexit, the focus of much business- and trade-related discussions has been on differences between the UK and across other European markets and the potential for those differences to widen over time.
However, new research from online marketplace Alibaba Group suggests there remain plenty more similarities than differences.
Its new report, European Export Opportunity Report, Global horizons - Helping European businesses grow through international trade, finds that while there are some minor variations between markets - in particular in the likelihood of businesses to engage in exports - the European export landscape is both quite promising and relatively consistent.
Key findings
The research project sought the views of 9,000 business owners and directors in nine major markets across Europe. The findings show that four in five (80%) businesses currently export and just over half (52%) of their annual revenue is generated from exporting. And 70% feel positive enough to anticipate their export sales will increase in the next year.
Of the nine countries included in the research, businesses in Italy (91%), Denmark (90%) and Belgium (90%) were the most likely to engage in exporting, while businesses in France (73%), Germany (73%) and the Netherlands (70%) were the least likely.
While overall the most common obstacles and challenges to exporting were consistent across the continent, there were some variations.
Barriers across the continent
The most common obstacles to exporting include logistical and supply chain issues, lack of cultural awareness, political uncertainty and administration. Difficulties in finding a trusted export partner also ranked high on the list of barriers to international trade.
Across all markets, supply chain and logistics challenges were the biggest barriers to export (20%), followed by a lack of cultural awareness and familiarity with overseas markets (19%), increased paperwork and red tape (18%), price competition (18%) and inadequacies in production capacity (18%).
Businesses in the UK and France listed supply chain and logistics challenges as their biggest barriers to export (22%).
In comparison, German companies ranked a lack of cultural awareness or familiarity with the overseas market as their greatest challenge (22%).
For businesses in Sweden, increased paperwork and red tape were one of the main hurdles to exporting (22%).
Critical for Europe
This research clearly shows that exporting is important for European businesses, with 79% describing it as “critical for the future of their business”.
Meanwhile, over three quarters of businesses say exporting has made their businesses stronger and 79% say exporting has boosted their revenue.
A large majority (80%) agree that exporting has driven innovation in their business, increased the size of the workforce and helped drive digital transformation. European businesses are looking to export to help them navigate their way through major headwinds, including economic uncertainty and rising costs.
By embracing greater international diversification, firms can access new opportunities and protect themselves against potential problems in the home market. Almost four in five (79%) said exporting had relieved pressures at home.
SMEs lagging
Despite these advantages, the research shows that small to medium enterprises (SMEs) are lagging behind larger businesses when it comes to seizing the benefits of exporting.
Currently 23% of SMEs do not export at all, showing untapped potential for growth among Europe’s smaller companies.
“These findings reveal that businesses that export are more resilient, innovative, can attract and retain talent and are achieving growth in the currently challenging business climate,” said Michael Evans, director and president of Alibaba Group.
He added:
“This report underscores the vital importance for small businesses of having an export strategy and a digital strategy. Both are essential for businesses to support long-term, sustainable growth,”.
To hear more about How SMEs can overcome export barriers in a changing trade landscape, sign-up for our free webinar on 11 May 2023.
