Export to grow
Earlier this year, DHL announced a £156m investment to increase its capacity in the UK and support the country’s export market. Phil Couchman, chief executive of DHL Express UK & Ireland, offers reassurance that entering new markets is easier than it’s ever been.
Q. What is the state of the UK export market at the moment?
A. There has been double-digit annual growth since I joined DHL in 2011. If you take it as some kind of barometer of what’s happening, our business covers tens of thousands of exporters, all geographic segments and all products and we see nothing but optimism from our customers.
Back when the world fell apart in 2008, it was recognised that exports would help the UK to get out of a recession. And with that in mind, the government set some ambitious export targets as a way of helping the country get back on its feet. We think this policy has been, and continues to be, successful.
Q. Which sectors have experienced the greatest success in exporting over recent years?
A. Traditional businesses such as financial services, engineering companies and auto manufacturers, as well as life sciences and pharmaceutical firms, are all doing well. But the most spectacular growth has been in online retailing.
Exporters in this sector hit a sweet spot about five or six years ago, with a happy confluence of factors which put them very much on the world stage.
Firstly, brand Britain is very strong in many parts of world, especially in our two biggest export destinations: the US and China.
The English language also plays a strong part in the UK's attractiveness, as does our expertise in the creation of state-of-the-art, consumer-friendly websites, which seems to have grown in the UK quite quickly – certainly before the rest of Europe.
This is particularly the case in fashion retailing: the likes of Farfetch, Next, Net-a-Porter, Asos, Matches and Reiss have highly developed, sophisticated and easy-to-use sites.
Q. What other advantages have UK firms benefited from?
A. The strength of the British brand should not be underestimated, in particular in a market like China. Take Waterford Wedgwood Royal Doulton as an example: if a plate has “Made in Britain” stamped on the back it commands a premium.
Look at the behaviour of customers who come into Harrods and spend vast sums of money on British-made goods: the evidence points to the fact that British fashion, such as Burberry and those sorts of brands, are very sought-after. As well as luxury and fashion goods, the success of Jaguar Land Rover and JCB in the auto industry also means the sales of spare parts have increased.
Until recently, exchange rates have also been favourable towards a basket of other currencies. The cheaper pound has made it attractive to shop here, although maybe conditions are going to get a little tougher this year and next.
Q. What role does the government play in promoting exports?
A. Through collaborations with embassies and trade commissioners around the world, the likes of UK Trade & Investment have done a good job in networking and getting importers in those countries together to understand what Britain has to offer, as well as helping in a technical sense.
Q. What kind of practical assistance is available to new exporters?
A. UKTI will get you talking to an expert who can help you with questions about what happens in the reciprocating country, with expertise and experience covering issues of taxes, trade marks and any restrictions that may exist.
In terms of being able to research foreign markets, the world is a pretty small place these days. And the UKTI can help you get a feel for whether you can make a go of it or not in a particular market.
Alternatively, get in touch with the UK embassy of the country you are looking to export to, and they might put you in touch with a trade commissioner. The opportunities for networking in the modern world are untold.
Q. What initial obstacles do firms face when starting to export?
A. In my view it is just a perception that getting started is difficult. We don’t think it’s anything like as challenging as people might think.
Typically a manufacturer may be doing quite well in the domestic market but then when it is suggested he might export, he typically puts it in the “too hard” basket unless he’s more entrepreneurial.
But you can start your export business very easily with some samples or small amount of goods, with only a very simple commercial invoice, directly to the customer’s door.
That can lead to moving large quantities of your product by sea or air freight, or setting up wholesalers or agents around the destination country if that’s the way you want to do it.
These are exciting times for exporters: it’s easier than it’s even been. You can fly something, no matter what it is, from one side of the world to another within two days.
As I have said, UKTI has a great depth of expertise but sometimes people don’t know that. If their services were better publicised and promoted I think you’d get a corresponding lift in exports.
Q. What markets do you think more British firms should be looking at?
A. We do not trade very much with Turkey and I often wonder why. There must be goods from here that are of interest: it is at the centre point between east and west. A lot of the big auto manufacturers are down there and they see Turkey as being a bridge between the two.
Q. What is the outlook for UK exporters?
A. The market is very healthy, although there is a possibility that a strengthening pound could put a dampener on things in the long term.
But the online retail industries in particular are not so new any more: they have already established their brands, their marketing techniques and their distribution channels around the world, and they should be able to weather any currency fluctuations.