The RBS Group identified the most attractive under-exploited markets for UK exporters out of the nearly 50 that were analysed and whose appeal was determined by compatibility (matching import needs to UK exports), growth, prosperity and the ease of exporting.
Whilst the outlook is currently subdued in key export markets such as Europe and the US, success will increasingly rest on less-indebted, faster-growing parts of the world. Therefore, the study concludes, British exporters should focus on the markets of China, Korea, Brazil, Mexico, Turkey and Taiwan; especially Mexico, Brazil and Taiwan stand out as missed opportunities for the UK.
Studying these countries more closely it is plain that size should not always be the primary focus when exporting: India may offer a big market but because of its high tariffs and taxes, low compatibility and relatively low income, a smaller country like Turkey might be a better fit for UK exporters because Turkey biggest imports – petroleum, telecommunications equipment and motor vehicles – represent key export products for the UK. Also Brazil is a good fit for some UK exporters – road vehicles account for 9% of Brazilian imports and 10% of UK exports, so, in this sector, the two countries’ trade structures are closely aligned.
Even though China still represents the second-biggest import market in the world with good growth prospects and a large middle class, the down side is the low ease of exporting and compatibility, e.g. electrical machinery accounts for 15% of China imports but only 4% of UK exports.
The study also shows that it is not enough to simply focus on a country’s size and its GDP: “What’s good for the UK as a whole won’t necessarily be good for individual companies”.