Crack the Crunch with the Crunch Breaker
Export opportunities due to low Pound Posts
China coming out of recession – the numbers are mind-numbing…
December 8th, 2009
I suppose it’s as if we’ve been cowering in our bunkers for the past year whilst the recession rages around us; banks collapsing, mass unemployment, consumer fear.
We’ve become used to recession.
Poor figures. Bad news.
Agreed –the past few months have shown an improvement but we all know that any recovery is fragile.
So it was with some interest that I arrived in China recently. I had heard of mass redundancies there too – millions losing jobs as factory after factory closed.
What I found was an amazing ‘can do’ attitude by everyone. Yes – the recession had been tough but it was the fault of the US and UK, not Asia, it was explained to me.
In one meeting I had, I was told that the company, a major power in retailing globally, had decided to turn its attention away from the West and to China, which is where the future lay.
Open the South China Morning Post and the numbers are mind-numbing; it stated that growth in mainland China’s industrial and retail output accelerated last month. Industrial production, which accounts for over 40% of China’s economic output, rose 16.1% in October, up from September’s 13.3%. Annual growth would meet the 8% target.
Gordon Brown would be a permanent fixed grin if that was the case in the UK.
Retail sales were up over 16% too, in a sign that the Chinese are shopping again. Looking at the shopping malls and restaurants in Shanghai and Beijing, they certainly are.
Cynics would say that the numbers are massaged. Maybe that’s the case, but I have no doubt that this country is growing rapidly once more. Vehicle sales were up 72% on 2008, with sales of 1.22 million units for October alone. 30 years ago only senior government employees or the very rich owned a car at all.
This is the market of tomorrow. And if there is a wider post recession trend, then it is the rise and rise of Asia.
I for one will be spending more time developing this massive potential over the coming year.
A great time to Export – but do your homework first
June 1st, 2009
As we have been told many times now, it’s a great time to export, especially if a UK (and increasingly a US) company, as these businesses can take full advantage of weak currencies to leverage against competitors.
But it isn’t all plain sailing. You must do your homework before you start.
I was really interested to see an article in this weekend’s Sunday Times about Ben Sherman, the iconic UK streetwear brand and their recent foray into Europe. I was particularly interested as this is a sector I have real knowledge – I just couldn’t believe that they hadn’t researched their markets first.
It seems that the new International Sales Director decided that what worked in the UK would work around the world too. They set up a new distributor in France, advised them what they should be selling based on UK sell-through, and told them to get on with it.
Nobody ordered anything – the orders were just not coming through. After some serious head-scratching, they hit on the reason – in France no-body wants zip-fly jeans – men prefered button-fly in France – but it was too late – the damage was done.
LESSON NUMBER ONE – don’t try to export the same thing to everyone at the same time. Learn one market, do it properly, adapt if needed and then move onto the next.
Make sure you have a tailored approach for each country. There are many pitfalls if new to exporting – for example, offering a distributor exclusivity for a particular country only to discover that in reality his distribution is very limited. Also don’t rush out to appoint the first person who comes along just because they are ‘lovely and charming’ (DON’T appoint those you meet by chance at a trade fair – go and visit them and find out more before you commit).
So Plan, Plan and Plan – adjust and adapt. Think Global – Act Local. If you do your homework, international markets can become pivotal to future success.
Export Markets in the new world order – where will they be?
May 11th, 2009
Driving sales growth for consumer brands internationally is what I do best – I have been doing it for over 10 years. Having worked on every continent with leading retail groups I have seen massive growth surges in newly emerging markets such as the Middle East, China and Russia.
But everything seems to have changed in under a year. Markets such as UAE have fallen off a cliff, whilst Europe seems to be plunging into a long recession, restricted by the straightjacket constraints of a single currency. It didn’t seem that long ago that Germany had emerged from a painful and expensive re-unification with renewed vigour. What about the US?
In the UK we are ideally positioned to lead an export-driven recovery. With Sterling low against the Dollar and Euro, it’s a great time to break out aggressively into new markets. But where?
I believe that Western Europe is still a good market if you have a strong brand and bring value. Retailers are always looking for increased margins, faster sell-through and innovative product, so if these qualities are on offer, the added bonus of a weak Pound will tip the balance. Eastern Europe is looking very precarious financially and so I would hold back here for another few months. Having personally had a lot of success in Poland in the past however, this market may buck the trend so certainly worth exploring – it may come out of recession faster than its neighbours.
Russia, always a difficult and high risk market at the best of times, is worth looking at again – there have been strong surges on the markets in recent weeks and consumer confidence is rising. I would also proactively look at the US – the signs are that it may come out of this mess faster than we thought, so now is the time to back in there and leverage the Sterling/Dollar advantage.
The UAE, especially Dubai, has had a very bad recession and may take time to sort itself out. Until consumers start re-visiting the region as a tourist destination, it won’t pick up much. However, don’t discard the region – Kuwait and the Gulf States are less affected, as is Abu Dhabi and KSA.
I would put real effort into building business in China and India. These are the markets of tomorrow, as we have been told many times – there’s a lot of talk about China becoming a consumer market in its own right, and when this happens the tables will be turned. It will be a massive opportunity for those who have a market presence.
And finally, the one place that everyone seems to either ignore or forget – Australia. It may be a small market (relatively speaking, at a population of almost 19 million), but it has managed to weather the storm better than most. Plus, as I have seen time and time again, if you are prepared to jump on a plane and fly across the world, there’s a great market waiting for you when you get there. And the weather’s great.
Don’t ignore it!
Leverage the weak Pound to drive export sales
February 9th, 2009
It’s tough out there – we all know that. Day after day of depressing news, business failures and more uncertainty.
But in the UK we have a potential upside that is stronger than in many other markets. The weak Pound.
Sterling is more competitive than it’s been for years, and despite a relative rally against the Euro at the time of posting this Blog, the UK currently has a great competitive edge in Europe, Asia and the US.
You just have to walk down Oxford Street or go into Selfridges in London’s West End to see the hoards of Europeans snapping up items as if it’s the first day of the Sales. The UK is clearly a very attractive place to come and buy goods – much in the same way as we all herded over to New York 2 years ago when the Dollar was 2 to the Pound. We now need to step up a gear and and get in front of new customers in new markets overseas.
Of course a cynic will argue that there’s not much use trying to build business internationally during a global recession when other markets are in a bad way too, but think again; there will always be a demand for product that is innovative, well designed and priced competitively.
As a nation, we have always been good at the first two, but fallen behind when compared on price. Now we have the advantage of all three, without having to compromise on margin reductions and cost cutting.
In future Blogs, I’ll point out where some of the opportunities currently lie and how to tie them down.