On the face of it, you might be thinking: how can UK companies compete with the manufacturing might of China? Despite this huge nation being one of the great ‘workshops of the world’, local security buyers are very discerning when it comes to quality and innovation in their purchases. UK security has a very healthy (and well deserved) image in China for exactly these attributes. Finding the right niche with local buyers offers great opportunities.
There have been some fears over the Chinese economy slowing down, but at TDSi for example, we have seen a 50% growth in our export sales there compared to last year – so there is still a very buoyant security market in an economy which continues to grow at a staggering pace.
As you might expect there is a considerable amount of administration involved with exporting to China, but the import tariffs are reasonable and won’t make the market any less appealing. This is actually where finding the right partner pays real dividends because they will be able to help you with the legalities. I wouldn’t say China is a quick win however - TDSi has been trading there for 20 years and we are now finding the true potential of trading with this potentially vast market!
As well as China there are a many other regional markets which are growing rapidly and are definitely worth investigating - including Malaysia, Indonesia and Vietnam to name just three. With potential partners and markets looking towards the UK for the right products, this is a potentially very lucrative region for security exports.
With the Intersec 2016 security event taking place in Dubai in January, it is a perfect time to look at markets in the Middle East. Naturally the situation involving Daesh has had far reaching effects, but is particularly evident in this region – so effective security is high on the agenda for local government bodies as well as businesses. Again UK security products have a good reputation in the region, so local markets will be receptive to enthusiastic companies offering the right solutions.
A country which is also showing real promise as a potential security market is (perhaps surprisingly) Iran. Having been closed to imports for almost 10 years, both the UN and US are in talks to get sanctions reduced or removed. Before the sanctions were put in place, Iran was a buoyant and rewarding security market – particularly in its commercial and energy (oil and gas) sectors. The sanctions have inevitably taken their toll on the whole of Iran and there will be a desire to improve infrastructure. Also, considerable Iranian assets were frozen in banks around the world, so an easing of sanctions should see these Investments freed up and ploughed into infrastructure – with security being a key part of this.
Africa has a highly diverse makeup of countries and cultures, from the Arab-dominated North African states to West and East Africa and South Africa – all of which have their own unique and often considerable security needs. With the political turmoil across North Africa, security purchases are vital and having the right contacts in these countries makes it sensible and good business to engage with these markets.
In western Africa, Nigeria is a good example of a market which is showing signs of emerging again after a few years of uncertainty and unrest – including political instability and issues with violence from the likes of Boko Haram. With a new, seemingly more stable regime and a sizable population and economy, the country offers a considerable potential security market for high quality imports. It is also an ideal base of operations to sell into neighbouring countries.
Finding the right market for your business
Researching and finding the ideal export markets for your business is a highly individual process – a market that suits your traditional competitors may not be right for you, for example. Also, if you can find a market that doesn’t feature direct competition, you will have a better chance of gaining considerable market share!
Some markets are tougher to export to than others. For example, India has proven to be a tough one for TDSi due to the challenging import tariffs, which can make foreign goods expensive for local customers. Brazil has also proven to be a seemingly enticing market which is, however, largely protected from foreign imports, which makes it difficult to compete with local suppliers on an even playing field.
This is not to say that these markets shouldn’t be explored – sometimes there are ways of getting around these issues (such as being specified for government projects or being based in neighbouring countries and making the most of reciprocal trade agreements). Finding the right mix of market demand, local expertise and favourable legal and logistical conditions could offer the exports ‘sweet spot’ your company needs to expand in 2016.
John Davies, Section Chairman of the BSIA Export Council and Managing Director of TDSi