Market overview: the UK market is waiting for strong economic momentum
Although the departure of the United Kingdom from the European Union has taken on a soap opera like dimension, it is certainly worthwhile to continue considering the opportunities offered by the UK market when setting export targets, as the island country’s economy, despite the turmoil, is sound. It’s important to know that the UK has remained among the top 10 target markets in Estonia’s trade balance for the past eight years, reaching half a billion euros in volume.
The conclusion of the so-called Brexit cannot be predicted by any clairvoyant, as today there are several more or less realistic scenarios on the table – according to one, Britain will leave the Union after the general elections on 12 December, according to another, a new referendum on staying in the European Union will be held, and there is also the possibility that the British will leave under the terms of the current deal, but without immediate tense trade negotiations, and finally, if the transition period is not extended, the end result would be leaving the European Union without a deal. In conclusion, after three years of talks and debates, the political future still remains uncertain.
Arundel Castle, Sussex County, England – A prosperous area with a high production of medical equipment, however, it voted to leave the European Union
In spite of the political turmoil, the British economy is still in good shape compared to the large countries in continental Europe, because the economy has continued to progress at the same time and the foundations remain strong. In recent years, there has been an explosion in the proportion of micro-entities and self-employed people, many of whom are employed in the framework of the so-called “gig-economy”. It is the high proportion of the service economy that best describes the British economy – although England is considered to be the cradle of the industrial revolution, the real contribution of industry has fallen to 19% of GDP by today, while the proportion of services has risen to 80% of the entire economy.
The United Kingdom has remained among the top 10 target markets in Estonia’s trade balance for the past eight years, reaching half a billion euros in volume. Exports of services have recently grown significantly, mainly due to companies like Bolt, Transferwise and Monese, whose clients are based in the UK but who have development centres in Estonia. Wood pellets, furniture, construction materials and wooden houses are the most important exported goods, while the volumes of various organic and niche products have also increased.
The advantages of the UK market for our entrepreneurs are its size and the purchasing power of its consumers, as well as the relative geographical proximity to Estonia and linguistically understandable cultural space. At the same time, anyone interested in the British market has to take into account that the market and the business culture there are very different compared to the rest of Europe, and at times quite complex. In order to succeed in the cultural space of England, one has to understand very well the various linguistic nuances, as well as the sometimes surprisingly varied interpersonal relationships. Even after a long exposure to the local business culture, the ability of the British to make simple things extraordinarily complicated for us is always surprising.
Andreas Heiki Pant, representative of Enterprise Estonia in London, received the Emerging Europe Award for the Best Tourism Campaign for #EstonianWay
When setting up your messages for entering the UK market, it is definitely worthwhile to include an expert who speaks English as their mother tongue, as it is easy to get lost in its culturally and historically diverse customs. An advertising slogan or an idea that functions well on the Estonian market may not mean the same thing when literally translated, and can have a serious setback if it is inappropriate. That means that any promotional material and social media content marketing requires a sharp glance and prior scrutiny from a local editor.
When targeting the British market, it is worth recalling the words of one of Estonia’s largest garden house manufacturers uttered a couple of years ago – the UK is an agent market, like it or not. Failure to take this into account may prove lethal to energetic expansion plans, although no one likes to share their “pie” with others. Based on experience to date, it is very difficult to establish yourself in industries such as building materials, textiles or cosmetics without an agent.
In the case of consumer goods, the involvement of an importer is inevitable, as local retailers are not interested in importing goods by themselves. When looking for an importer and a reseller, you may find yourself in a catch-22 situation where the retail chain may show interest but will not go into business without an importer. At the same time, the importer does not want to add the product to their list until they are convinced of the serious interest of resellers or retailers. In the context of e-commerce, developing a workable logistics solution in cooperation with an importer or a suitable warehousing service provider is paramount.
Achieving success when selling services without a local partner or agency is also very difficult, especially if the goal is to sell on the UK market a service that is provided in Estonia. Whether it is selling an architectural, accounting or other intellectual service, it is always worthwhile to find a local partner or at least a British resident living in Estonia to help the service reach the end consumer.
The 60 million consumers of the United Kingdom with high purchasing power will continue to buy products and services after Brexit, no matter what form it takes. The uncertainty accompanying Brexit has pushed many big companies to wait instead of investing, but economists here agree that the December elections should clear some things up, as well as that a large wave of investments could emerge on the British market after the framework becomes clear. This vigorous economic momentum, which has been waiting for three years behind a dam, could open up many new business opportunities for Estonian companies as well.
In the morning of 12 December, Enterprise Estonia will organise a seminar on the specifics of the British market in cooperation with SEB Business Advisory Service to explain, based on concrete examples, how to enter this specific competitive market, how to prepare for it, how to plan cooperation and connect with potential partners. You can register for the seminar HERE (long link: https://www.eventbrite.com/e/kuidas-siseneda-suurbritannia-turule-tickets-82586485401 )
Andreas Heiki Pant
Telephone: + 44 (0) 207 838 5395
Mobile:+ 44 (0) 750 865 8091
Email: [email protected]
Estonian Embassy in London
44 Queen’s Gate Terrace
London SW7 5PJ, United Kingdom
Working languages: English, Estonian