Businesses in Wales are amongst the top exporters of goods from the UK, according to new research released from Alibaba Group in partnership with Institute of Export and International Trade.

The study of more than 3,000 businesses across the UK shows Wales has the largest percentage of exporters and is leading the way out of the UK nations. 87% of businesses in Wales currently export, compared to 78% of businesses in England and, 80% of businesses in Scotland.

The findings come in the wake of recent government figures showing that export trade for Wales was worth a total £115bn between 2016 and 2022. Additionally, figures show that exports of Welsh goods have recovered beyond pre-pandemic levels, rising by 36% in the 12 months leading up to September 2022.

According to Alibaba’s research, 79%2 of businesses in Wales say their exporting has boosted their revenue and 70% expect their export sales to increase1 in the next 12 months.  Furthermore, just over a quarter (26%) say they anticipate a significant increase in export sales.

This is encouraging given the recent announcement of the first two freeports in Wales, where companies will be able to benefit from simplified customs processes.

Beyond the economic benefits of exporting, the research from Alibaba indicates the far-reaching positive impact on Welsh businesses:

• Over three quarters (76%) say exporting had made their business stronger2
• 81% of Welsh respondents said exporting had fuelled innovation within their companies2
• 80% of Welsh businesses said they had increased their headcount as a result2
• 80% said exporting had relieved the pressure of doing business in the UK2

While the European Union (EU) was cited by UK businesses as the number one market which presents the biggest export opportunity, Welsh businesses are looking further afield for opportunities. Nearly two fifths (37%) of Welsh businesses regard North America as the market which presents the biggest export opportunity, while just under three in ten (29%) voted for China, the same proportion as those who cited the EU (29%).

Despite the positive outlook, many businesses perceive challenges that could stand in the way of their export ambitions. The top five biggest export barriers cited by Welsh businesses are listed below:

• Increased paperwork and red tape (24%)
• Struggle to find trusted export partner (24%)
• Lack of access to suitable export finance (22%)
• Lack of demand for products in overseas markets (21%)
• Lack of exporting expertise (21%)

For businesses focused on international growth, more than seven in 10 (77%) of those surveyed are currently using online marketplaces to boost their export sales. The top reasons identified for working with a marketplace included:

• Expansion into new geographic markets (37%)
• Access to richer competitor and market insights (36%)
• Access to technology and communication tools (34%)
• Better inventory planning (34%)
• Reduced presence at physical trade shows (34%)

These findings would suggest that online marketplaces are lowering the potential barriers to export.

Roland Palmer, General Manager of UK, Nordics & The Netherlands, Alibaba Group, comments:

“Our research suggests that Welsh companies are seizing the enormous global export opportunities which exist across the world.

“Wales is an important export location in the UK and is one that is continuing to grow. We are committed to working with local businesses to help them navigate the potential challenges and realise the opportunities exporting can bring.

By trading overseas, even small businesses can expand, creating more job opportunities and economic growth. Once a business starts to export, they realise the benefits outweigh the perceived barriers and they grow in confidence. We’re focused on helping businesses of all sizes on their export journey.”

Wales is fast becoming a focus location for global export, with the Institute of Export & International Trade recently launching a dedicated Welsh arm, IOE&IT Cymru, to boost awareness about the benefits of exporting.

Marco Forgione, Director General of Institute of Export and International Trade, added:

“This research confirms what we have long known – that exporting firms are more sustainable, profitable and resilient – but also sheds light on some of the many challenges that prevent businesses from exporting at all or exporting as much as they could.

“The whole trade community needs to work together to combat and reduce these challenges. IOE&IT is committed to promoting trade as a force for good and doing all we can to help every business start or expand its export activity, regardless of size, sector or home market.”