The FINANCIAL -- As Britain prepares to negotiate fresh trade deals abroad, new global research from Barclays Corporate Banking reveals two fifths (39%) of international consumers would be more inclined to buy a product if it displayed the Union Jack.
This was especially true for consumers in Asia and the Middle East (India, 67%; UAE, 62%; China, 61%), who have stronger associations of quality with Brand Britain. Younger people were also more swayed by the Union Jack – nearly half (48%) said this would encourage them to make a purchase, compared to a quarter (24%) of over 55s. In fact, this jumped to three quarters (73%) when looking at 25-34 year olds in China.
An international survey of over 8,000 people from eight markets (France, Germany, Republic of Ireland, USA, China, India, UAE and South Africa) has uncovered the most coveted British goods abroad, and the premiums foreign consumers are prepared to pay for ‘Brand Britain’ products.
Food tops the list, with international consumers willing to pay 22% more for food labelled as British-made. The fashion and automotive industries are also set to reap the rewards, with cars (10%), clothes (9%) and alcohol (9%) the items that international consumers most consider worth paying a price premium for, if they are labelled as being British made.
Produced as part of the Barclays Brand Britain: Export Opportunities for UK Businesses report, economic modelling shows the tangible benefits of a positive perception abroad. An additional £3.45 billion could be generated in revenue by deploying targeted marketing focused on the provenance of British products. While the modelling focused on eight key countries, the rewards could be multiplied still further if other markets were to be factored into the analysis.
Baihas Baghdadi, Global Head of Trade & Working Capital at Barclays, comments:
“Brand Britain continues to have widespread appeal abroad, demonstrating the continued scope for UK businesses to trade successfully overseas. The picture continues to look positive for Britain’s exporters, with international consumers going out of their way to buy British. Our research shows that some of the biggest opportunities lie in emerging markets, where British craftmanship is most valued. The prize is substantial, and exporters should be looking to highlight the provenance of British products to take best advantage.”
The extent to which country of origin affects buying behaviour should not be underestimated. With the exception of homeware, alcohol and soft drinks, consumers said that provenance was an important influence on the decision to purchase in all product categories. This was especially pronounced with foodstuffs, where 66% said the country of origin would affect their choice.
It is therefore reassuring that international consumers view British goods so favourably. While all product categories came out favourably, British cars and clothes were hailed as the pinnacle of quality merchandise. This perception of quality drives international consumers’ willingness to pay more for British goods (42%), closely followed by reliability (31%) and the knowledge that they are internationally respected (32%). Asian consumers also highlighted the status that comes with buying British, with 31% of those in India citing this as one of the reasons they would pay a premium. Indeed, British goods are so popular that half (51%) of international shoppers would hold out for a British product, rather than buy a non-British item, while one in nine (12%) believe that British goods are the best in the world.
As export trade to non-EU countries increased 1.5% in the three months to December 2017, the research found that the biggest opportunities for British businesses to grow exports in emerging, high-growth markets. While the EU and the US remain the biggest trading partners for the UK, there are significant opportunities for British businesses to grow exports to less traditional markets.
Consumers in emerging markets, like China and India perceive British products to be more reliable and of a higher quality. The research found that perceptions have a direct impact on the amount consumers are prepared to pay, which makes emerging markets a prime target for exporters: 64% of Indian consumers, 57% of Chinese, and 48% in both South Africa and UAE said they would pay more for goods made in the UK because they believe the quality to be higher. This is in comparison to our European neighbours, who are more restrained in their praise of British goods. Just 29% of respondents in France would pay more for goods made in the UK because they perceive the quality as higher. Economic modelling suggests this could translate into an additional £426 million in revenue from China, £93 million from India, and £92 million from the UAE generated by British-labelled products.