Brexit and COVID-19 Effects On UK International And Emerging Trade
According to figures issued by the ONS (Office for National Statistics) on April 24th, majority of the United Kingdom’s fastest growing export partners in 2018 were from developing markets has the opportunities for UK in emerging market throughout the globe.
A significant increase occurred in key markets such as India (up 19.3 percent to £8.0 billion), Taiwan (up 40.8 percent to £2.8 billion), and Nigeria (up 18.3 percent to £2.7 billion), all of which outperformed the general UK export growth rate of 2.7 percent in 2018.
Thailand (growth rate of 17.8 per cent to £2.2 billion), as well as Kuwait (upto 14.1 percent to £2.5 billion), have been two other fast-growing significant export destinations.
Asia was home to five of the world’s fastest-growing economies.
De Ville and Siles-Brügge (2019) report that by 2020, Asian economies would be bigger than the economies of the rest of the world combined for the first time since the 19th century, based on research by the United Nations Conference on Trade and Development (UNCTAD).
The concerned area is becoming more prosperous and prosperous, as well as appealing as a destination for British products and services, which is reflected in this development.
According to subsequent research by Standard Chartered, Asia’s contribution of global GDP would reach approx. 35 % by 2030, which is equal to the combined share of the Eurozone and the United States.
It also predicts that by 2030, seven of the top ten world economies would most likely be created by current developing markets (Rosca et al., 2020).
Moreover, businesses within the UK will continue in order to adapt to the fast-changing worldwide economic profit and climate from the extended demand of British items in developing nations in the coming years.
The potential in developing markets is a direct consequence of a number of variables, which are addressed in further detail below:
Appetite for Food among the Middle Class is Growing
As the middle class in emerging market nations continues to increase, global and local brands are capitalising on the potential afforded by this development.
BMW currently sells more automobiles in China than it does in the United States or Germany, thanks to its joint venture with Brilliance China.
Nigeria consumes far more Guinness than Ireland.
These are only two examples of how demand is growing among people whose incomes are increasing (Latorre et al., 2020).
Consumers’ need for variety and high quality, on the other hand, creates chances for businesses, many of which are indigenous emerging market businesses.
This isn’t merely a game of worldwide brand recognition.
Emerging economies are consuming more, demanding more, and producing more than they have in the past, according to solely economic measures of growth.
Furthermore, emerging market enterprises are not only servicing their local customer base, but they are also expanding into other developing markets and into the developed world — nowadays, the majority of people are familiar with names such as Samsung, Corona, and Tata Motors, among others.
Economic Fundamentals that are Sound
Goodness is a matter of opinion. Performance is a matter of perspective.
This is one of the reasons why the financial sector like using benchmarks.
For example, according to our Journey into Emerging Markets report, the FTSE 100 has performed “quite well” over the previous three years, generating returns of 24 percent.
In comparison, the stock market in China generated a return of 55 percent during the same time period1.
What’s more, the drivers of these gains are firmly based in the fundamentals of the economy, which is a fascinating development.
This amount of development is the result of technological breakthroughs, improvements in e-commerce, and massive infrastructural transformation across mainland China, which has resulted in the emergence of millions of individuals into the middle class (Jackson andShepotylo, 2018).
These factors are critical in determining the longer-term future for the economy.
Short-term market gyrations are often triggered by shifts in investor mood.
Sentiment may have a significant impact on the markets, with the good frequently being thrown out with the bad.
Companies with good fundamentals, on the other hand, are better positioned to create value to investors over the long term, regardless of the flavour of the month they are in.
In spite of the fact that China is often highlighted as an example of the “middle-class boom,” same characteristics can be seen in varying degrees across the rising economies (Elamer et al., 2019).
As a result, the labels “emerging” and “developing” are used to describe markets that are still in the process of changing.
Eventually, some of these areas may be categorised as developed markets.
Innovators Who are Quick to Adapt
The effect of new technology is constantly redefining the boundaries of what is possible in the world.
Because of their size and scope, conventional huge global brands typically fail to successfully use these improvements (Siles-Brügge, 2019). Making the most of these advancements needs a degree of agility and readiness to adapt.
The gains in technology, on the other hand, have been especially noticeable in developing countries.
Emerging markets are demonstrating their ability to be change agents since they are not constrained by the rigidity of existing procedures or infrastructure.
Factors to be taken into consideration before attempting to penetrate a developing market:
Affordability – In many developing nations, disposable income for substantial segments of the population may be much lower than in developed markets.
For worldwide goods, this means getting a deeper grasp of the wealthier sectors and tailoring marketing campaigns to their needs.
When it comes to locally produced or commodity goods, the issue is one of cost.
Distribution – Getting things to customers may prove to be a more difficult task.
The awareness of infrastructural limits, the development of local relationships, and the assurance of high-quality service are critical for companies that depend on developed-country logistics partners (Watterson, 2020).
When Haagen-Dazs first arrived in China, the company established its own storage and distribution network to guarantee that the product reached customers in the proper condition.
The importance of localised branding and marketing – What works in Boston may not be successful in Beijing. It is critical to have a thorough awareness of cultural differences in order to ensure that your marketing and branding are effective in other countries. Keep in mind that there is an urban/rural divide. Many urban consumers consider themselves to be “global citizens,” and they demand to be treated as such.
Keep an eye out for local competitors – Having the cachet of being a worldwide brand might be advantageous when entering new areas.
Cost, personalization, and the possibility of ‘brand colonialism’, on the other hand, may make more assumptive Western firms seem out of touch with their customers and susceptible to local competition (Victor et al., 2021).
Team members from the local community – As a worldwide market research business, we benefit from having team members from the local community in the markets that we analyse for customers.
This implies that we are familiar with the cultural backdrop, consumer trends, and larger macroeconomic position (Armstrong and Reynolds, 2020).
It is conceivable to enter developing markets at a distance from the competition.
Local individuals in decision-making positions, on the other hand, are the most reliable approach to prevent foolish cultural or operational blunders in the future.
In this study, the challenges regarding Brexit and COVID-19 effects are discussed.
It is noticed that these two effects together have slowed down the economy of UK. However, the emerging markets have provided an opportunity for UK to improve the international trades of the country.
There are some challenges regarding this. However, recommendations are provided in this study regarding achieving success in emerging markets.