David Kuo: British businesses should climb mountains and shout about their goods
Sunday 14 November 2010
It is often said that if you have a good idea it will sell itself.
This is partly true, but you have to tell people about it first. Britain has a solid track record in inventing and manufacturing. But when it comes to shouting our message from the rooftops, the voice of British businesses pitching abroad has registered little more than a whisper of late.
Research from the British Chambers of Commerce confirmed this, showing that only 38 per cent of its members were exporting goods overseas. Given the large number of goods the UK imports, it's a stark reminder of why the nation needs to be an exporter again.
It is for this reason that David Cameron and his delegation of business leaders flew to Beijing last Monday to woo potential trade partners. But what is more remarkable is that British businesses have taken so long to wake up to the huge potential of China's domestic market. Britain exported a paltry £7.7bn worth of goods to China this year, up from £5bn last year. In real terms, that equates to £6 of goods sold to each of China's 1.3 billion-strong population per year. By contrast, every man, woman and child in Britain buys £380 worth of goods from China.
The UK hopes to double its exports to China to £18bn by 2015. However, businesses could do even better if they set their sights higher. China has accumulated £2.7trn worth of foreign reserves over the past 20 years; the key will be identifying what the country wants to buy.
Specialist engineers have already started. Rolls-Royce picked up an order worth £750m for its Trent 700 engines to power China Eastern Airlines' 16 Airbus A330 aircraft. Big consumer brands are another area that show potential, given Chinese shoppers' penchant for superior fashion marques.
Some of the UK's leading clothing brands that stand to benefit include Burberry, Mulberry and Laura Ashley, all listed on the London Stock Exchange. Burberry already sells a quarter of its goods in Asia, while Laura Ashley and Mulberry have tended to be more UK focused. That could change with a Chinese kicker.
Other companies worth watching include Tesco and Marks & Spencer, and Diageo could crack open the Chinese market if its bid for a stake in Chinese distiller Shui Jing Fang is approved by China's regulators.
Without question, Britain has a treasure trove of business offerings. What it needs to do now is climb to the top of the highest mountain and shout about it.
David Kuo is director of the financial website fool.co.uk
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