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Exporting to emerging markets – what are the risks?

Britain is leaving the EU. Whatever the outcome of the Brexit negotiations, business with our traditional partners in Europe will never be quite the same. It provides companies with a strong incentive to explore new emerging markets.
Markets

According to the Institute of Export and International Trade, from the already well established BRICS (Brazil, Russia, India, China and South Africa) to the less familiar MINTs (Mexico, Indonesia, Nigeria and Turkey), these markets present British companies with the tempting prospect of a new generation of urban consumers wanting to improve their life style and quality of life, and large national investment projects. As Europe remains stagnant, here is the chance for British companies to pin their longer-term success to some of the fastest growing and most exciting markets that the world has ever known.

Markets

According to Shipa Freight, SMEs have the most to gain from exploring emerging markets but, an article by Global Banking and Finance states that two thirds of SMEs only trade domestically and two fifths say they have no interest in exporting. Is there a reluctance by SMEs to export due to the perceived risk?

Articles by Shipa Freight and Currencies Direct discuss the challenges, risks and benefits of exporting to these emerging markets.

Potential risks include Currency risk, Credit Risk, Liquidity risk and Repatriation risk. However, a key benefit is that the International Monetary Fund (IMF) believes that these emerging markets are expected to grow by 4.8%-4.9% in 2018 so there is opportunity. It is important to understand which markets are likely to provide the best opportunity for the products or services that you sell.

Markets

There is a lot of help available if you are considering exporting for the first time or increasing the amount of exporting you currently do. You could contact Open to Export, the Department for International Trade and your local Chamber of Commerce as a starting point.

We are also here to help you at Commercial Language Training Ltd if you would like to learn the language of the country you are targeting.

Call us now on +44 (0) 203 036 0760 to enquire about a language course or visit our website.