Allport Cargo Services held the 2nd seminar in the ‘International Retail’ series – Going Global – at Millbank Tower, Westminster, focusing on opportunities and strategies for UK retailers considering a move to overseas markets.
“When I sold a fashion brand a few years ago it had built up to around 200 stores, and was at that point looking to break into international markets,” began KPMG’s head of retail David McCorquodale, “We are now talking to brands about going overseas when they have just 30 stores in their domestic market.”
David suggested this was down to three main drivers. Push factors; the UK market is effectively saturated and retailers are looking for new markets. Pull factors; increasingly international consumers want UK brands, especially apparel, which are highly prized and facilitating factors; such as the explosion in on-line shopping which has lowered the barriers to entering many new markets.
Nonetheless, he warned: “Funding an overseas venture can be very, very expensive – you need to make sure you have the management bandwidth and be aware of the strain it will place on your supply chain capacity.”
“Size matters,” added Neil Wynn-Jones of UKTI, “because it dictates your resource level, which can be mitigated by using on-line channels like China’s Tmall. In fact we have identified some 180 different retail platforms around the world, offering exporters a huge selection of potential markets.”
China retailer, Mike Mikkelborg, outlined the scale of opportunity offered by the Tmall platform in accessing the world’s largest e-Commerce market, for a relatively small investment. But counselled against the danger of believing it would be a low-cost venture, as the challenge of raising a brands profile in such a large market would require sustained investment.
Jacco Weterings from ACS Dubai talked to delegates about another popular route to market, the franchise model, which has successfully opened up the Middle East to many leading UK retailers and continues to offer opportunities to UK brands.
Dan Curran, head of supply chain at World Duty Free Group, who operate 500 stores in airports across 21 countries, talked about the rise of technology and consumer power and the supply chain challenges they raise.
“The Russian passenger, for example, really enjoys shopping at airports, particularly for luxury items. So we position popular products, at the time that they will be transiting certain terminals – supply chains being designed for the individual. That’s the future” he said.