Flying the flag for Britain abroad

Made in Britain has always been a powerful draw for foreign markets. A sense of history, plus the allure of the aristocracy, royalty and an emphasis on fine luxury goods is an evocative combination for far flung consumers. Especially those that have never experienced that kind of social landscape on their home turf.

This is particularly true in emerging, cash-rich markets where upwardly mobile consumers look to make sense of their new found wealth with purchases that say something about them and what they aspire to be.

For once manufacturing too seems to be on the up in the UK with Japanese car manufacturers in particular investing tens of millions in production on these shores. It seems almost unfathomable that in 2012, in the middle of particularly bleak economic times, Nissan produced half a million cars in the UK alone. Even at the peak of the UK automotive industry in 1972 that figure would have accounted for a quarter of all production.

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So it’s no flight of fantasy to suggest that international markets are ripe for the right kind of exported British products. Who knows, we might even be able to make some of them.

But how do you go about dipping your toe into international waters, what do you have to consider and how do you get to know your new customers?

Parveen Thornhill, regional director for UK Trade & Investment (UKTI) London, said: “There’s a number of things to consider. The main thing is, do your research and have a business plan. Take advantage of organisations that specialise in supporting overseas trade – such as UKTI, UKEF, Chambers of Commerce, banks, lawyers and accountants. Their support will be crucial and can help you do market research and appreciate cultural differences.

“Another important thing is, take into account different cultures. This could range from causing offence by not observing correct protocol to inappropriate packaging and marketing. UKTI can help with services such as export communications review and the export market research service.

“Focus on one or two markets at first and always test your market. An international trade adviser can help you identify relevant markets and plan a strategic approach. Part of that plan might be taking part in overseas events, trade fairs or missions to test markets, attract customers, appoint agents or distributors and make sales. UK Trade & Investment’s trade access programme provides grants to companies to attend trade shows and missions worldwide.”

British watch brand Bremont, which has just launched in Qatar with local retailer 51 East, established itself with a UK audience before considering a move into international territories.
When the time came to introduce its most British of brands to watch buyers outside of the UK its founding siblings Nick and Giles English were adamant that they wanted full control.

Giles English explained to WatchPro: “We’re a British watch company and we always felt that you have to have quite a strong home market before you go abroad but to be really part of the watch business you have to be global because so much of our business is sold to the global traveller and those people want to see your brand.

“In our minds we wanted to do that direct, not through distribution. We knew it was going to take longer but we strongly felt that we could control our brand in a better way, we could make sure there was no grey market trading and control our message by setting up abroad ourselves. So in Asia we set Bremont Asia in Hong Kong, in America we set up Bremont US and in the Middle East we’ve hired our own sales guy who goes out and does that. We knew we’d grow slightly slower but we could control that chain and make sure we were working with the right partners.

“It was incredibly tempting [to work with local partners] but we’re control freaks, we felt we wanted our control but that’s not to say we won’t work with distributors going into other markets it’s just currently we prefer to work with the retailers directly and have that close relationship. It means you do grow slower but in the long term we think having that control makes us stronger.”

Speaking of Bremont’s recent move into the Qatar, English explains: “Each country probably has two or three good retail chains and 51 East is one of the best, they are sole retailer for Rolex in Qatar and I flew out there with my sales manager and we met them and liked them. They gave up good locations in their shops, good support at the Doha Watch Fair and we’ll gradually grow our business with them. Having a good, strong retail partner really helps.”

However many would not dream of entering a new market without the local advice and security of working with a local partner.
UKTI’s Thornhill adds: “It’s important to identify the right approach for each market. You may take a different approach in each market. UKTI will help you with this. You need to make sure agents or representatives are the right people for the market you want to enter and will positively reflect your business and interests.

“For some markets and sectors it may be more essential, such as China’s food and drink industry due to complex legislation. A recent UKTI delegation to the Food and Hotel China (FHC) expo helped secure import partners with most attending London-based companies. From the tradeshow visit £1.4million worth of estimated sales were generated.”

British jewellery brand Tresor Paris has just launched its first watch collection but the founding Hasbani family, already a major figure within the jewellery trade, first established its new brand within the UK before looking further afield. The brand’s entry level pricing, unique product and Parisian theme proved a hit with customers early on with the support of its existing industry contacts.

Co-founder Salim Hasbani said: “We were very, very lucky from the start being well recognised in the diamond and jewellery industry, which has always been our target audience. In one respect it was fantastic because when we released the Tresor Paris brand it spread like wildfire, within three months it was in about 400 shops but at the time we had around 600 active clients. We had those contacts in the trade but the brand wasn’t recognised by the consumer and that’s where the difficulty lay because the consumers fuel the trade and the trade spend with the supplier.”

The Hasbani family then sought to move beyond domestic sales and participated in two trade shows in the UK as well as showing in Canada, the US and Hong Kong.

It was this low price point and manufacturing in the Far East that allowed the Hasbani family to produce enough stock through their own manufacturing facilities in the Far East to satisfy international demand as the brand grew. But the company’s Nouveau Hexagone watch collection, launched this month, involved establishing a relationship with a watch-making facility in Switzerland.

“It’s a longer process and it’s more difficult to achieve,” added Tresor Paris co-founder Lilian Lousky. “If we were going to manufacture your regular branded watches you can have it done in the Far East in a few months and on the high street, with Swiss-made you’ve got at least six months waiting for the movement, it’s much more complex but then it’s a much more exclusive piece.”

Thornhill outlines the need to minimise financial risk when entering new territories, saying: “With any trading, it’s important to establish the credit rating of potential clients in many countries and guard against non-payment through. You want to make sure you get paid – as obvious as it may sound it is very easy to overlook the risk of non-payment.

“Think about letters of credit which your bank will help with or arrange credit insurance. UK Export Finance can provide advice and insurance where the private market can’t help. There was some great news in the latest Budget; UK Export Finance will double investment in its Direct Lending Scheme to £3 billion as well as launching a consultation to boost UK exports.

“It’s also important to get to know the currency you will be dealing with. Consult with your foreign exchange provider early. They have a wealth of experience, knowledge and information on these risks and markets that surround them. And it’s worth remembering, that even despite recent issues with the Euro, the EU still remains one of the UK’s most important markets.”

While social media and the internet can help put your brand on the radar of audiences around the globe it pays to be aware of local idiosyncrasies and to be prepared to drum home your brand’s story from the ground up.

English notes: “On a local level the world is a big place and you really have to start again on building your brand out there. It is hard work and you have to use the right chain, the right media to be working with, the right retailers to build your brand up in that country. And every country is slightly different, they have different views on methods of marketing and messaging. You may have ambassadors that everyone knows in the UK but no-one knows in the Middle East.

“We’re in discussions with Japan at the moment, we’re going in there in a very small way and it’s early days. We don’t change the product, that’s the same everywhere. Some people change product for example in China. We think the Britishness is quite a strong selling point there so we’ll push that, obviously our traditional adverts in the UK are quite wordy, we’ll have to change that and make it more visual. So we change our messaging slightly like that but we don’t believe we need to make any drastic changes, more the way we present what we currently have.”
So what assistance can you expect when trying to turn your company into a global player?

“You can call UKTI to organise a meeting with a qualified International Trade Adviser (ITA).” Explains Thornhill. “ITAs recruited from the private sector can share their own experiences of exporting. This will help companies build a bespoke export plan geared to their business needs.

“I can’t emphasis enough how important it is to research the market. UKTI’s Passport to Export programme is an excellent way to do this. It offers eligible new or inexperienced exporters access to advice and support to develop their export business. I’ve mentioned the Export Communications Review already. This provides companies with impartial and objective advice on language and cultural issues, helping them improve their competitiveness in existing and future export markets.

“We can also help by providing businesses use the services of our trade teams located in our embassies, high commissions and consulates across the world. Our overseas teams can help companies find contacts, advice on the route to market and provide a market overview for different sectors.”

The UKTI also brings overseas buyers to the UK and hosts a calendar of events and market visits for UK businesses looking to move into export business. This month the organisation holds Export Week with a series of regional events, seminars, trade workshops, targeted market days, intellectual property and marketing workshops.

Ten Top Export Tips from Crispin Simon – Managing Director of Trade Development UKTI

Exporting goods and services helps UK businesses to grow, creates new jobs and has the potential to add £30 billion to the UK. UK Trade and Investment (UKTI) can help small businesses break into overseas markets and research shows that businesses earn £100,000 on average in additional sales within 18 months of working with UKTI.

Here are our top ten tips for SMEs to consider when exporting goods.

1) Research, research, research – Get in contact with UKTI and use our expert international trade advisors (ITAs) to help you research the market you are trying to break in to. Contact UKTI on 0207 215 5000 or visit www.ukti.gov.uk.

2) Plan – Make sure you have a business plan and the necessary capital. Approach your bank and UK Export Finance (UKEF), the government’s export finance provider for advice well in advance so they can provide the best possible support.

3) Test your Market – Take part in overseas events, trade fairs or missions to test markets, attract customers, appoint agents or distributors and make sales. UK Trade and Investment’s (UKTI) Trade Access Programme provides grants to companies to attend trade shows and missions worldwide.

4) Foreign currency – Get to know the currency you will be dealing with. Consult with your foreign exchange provider early.

5) Start small – It will be tempting to pursue multiple markets, instead focus on one or two markets at first.

6) Identify, appoint and manage agents and representatives – Make sure agents or representatives are the right people for the market you want to enter and will positively reflect your business and interests.

7) Take advantage of organisations that specialise in supporting overseas trade – such as UKTI, UKEF, Chambers of Commerce, banks, lawyers and accountants. Their support will be crucial.

8) Appreciate cultural differences – Failure to take account of different cultures might lead to damaging and costly mistakes. This could range from causing offence by not observing correct protocol to inappropriate packaging and marketing.

9) Make sure you get paid – As obvious as it may sound it is very easy to overlook the risk of non-payment. You can establish the credit rating of potential clients in many countries and guard against non-payment through, for instance, letter of credit or arrange credit insurance- UKEF can provide advice and insurance where the private market can’t help.

10) Have patience – Setting up overseas may not move as quickly as you anticipated, local customs and legislation can slow things down.

This feature originally appeared in the April 2014 issue of WatchPro.

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