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Baihas Baghdadi

Insights: Baihas Baghdadi

04 January 2018

Barclays Global Head of Trade and Working Capital, Baihas Baghdadi understands the importance of exports in driving UK economic and business growth. His team helps thousands of UK businesses to export, with a focus on research-based strategies to ensure they provide the right conditions for growth.

As the UK enters a distinct new era, Barclays is looking at how it can support UK businesses to unlock the door to further growth, particularly if they have hit a ceiling in the UK. One opportunity has been to team up with King’s College London Business School and draw on the expertise of both institutions to examine what is required to help UK businesses export more, especially in sectors where exporting is currently limited. This work sits alongside the recent Barclays ‘Brand Britain’ report which explores exporting opportunities for UK businesses and the premium international consumers will pay for goods labelled ‘Made in Britain’.

Baghdadi reveals that Brand Britain could offer a key value and price differential for exporters. The UK Government has long argued that there is significant demand outside of the EU for products Made in Britain and the Barclays report verifies this by revealing that 39% of international consumers would be more inclined to buy a product if it displayed the Union Jack.

“Brand Britain has widespread appeal abroad, demonstrating the continued scope for UK businesses to trade successfully overseas. Some of the biggest opportunities lie in emerging markets, where British craftsmanship is most valued. The prize is substantial, and exporters should be looking to highlight the provenance of British products to take best advantage.” Baghdadi comments.

Baghdadi adds “We surveyed over 8,000 consumers across eight international markets to examine what overseas consumers think of British goods. This included which attributes overseas consumers most associate with products ‘Made in Britain’ and, crucially, whether they would be prepared to pay more for them. The results are encouraging with British businesses being revered for integrity and British products seen as trusted. British companies also have a reputation for innovation and quality based on tradition.”

This favorability can also translate into increased demand. Across the eight markets of France, Germany, Republic of Ireland, USA, China, India, the United Arab Emirates and South Africa, the research finds that almost £3.45 billion a year of additional value could be generated by promoting the British origins of the products being exported. Much of this demand comes from emerging rather than established markets, where a belief in the superior quality of British goods is higher across all the sectors being surveyed. Encouragingly, the most favourable levels of positivity came from China and India, two of the world’s largest export markets.

Africa and the Far East

The research shows significant opportunities for British companies elsewhere. Fast-growing economies and aspirational middle classes across Africa and the Far East are hungry for products ‘Made in Britain’. Conveniently for UK plc, many are also members of the Commonwealth where English is widely spoken, and British goods and brands are more familiar.

Baghdadi reveals “To realise maximum export value for the UK in the future, efforts should be focused on increasing exports to the countries with the most positive attitude to British-made products through targeted market segmentation. Our findings showed that, globally, the UK continues to punch well above its weight in a number of sectors including food and drink, fashion, education and industry.”

Realising potential

So how do businesses realise this potential? The Brand Britain report recommends five strategies for success.

  1. Firstly, visual branding is particularly effective and especially in emerging markets. Displaying the British flag on your goods could increase preference to purchase. (think Mini’s sold in China with Union Jack roofs).
  2. Secondly, carefully choosing your market will maximise the return on investment achievable. Consider attitudes to British-made products and perceptions of ‘Made in Britain’ goods as part of the mix, alongside levels of competition, logistics and general product demand.
  3. Thirdly, ensure that your marketing successfully focuses on the perceived attributes within your target market (for example, the levels of quality, integrity and trust).
  4. Next, different markets place different values on the Made in Britain tag, so pricing must be appropriate. Would discounting devalue the customer’s opinion regarding the quality of your product? Would a premium pricing strategy be more appropriate to underpin their perception of the Britishness of your product?
  5. Finally, plan ahead and communicate: post-Brexit trade challenges and opportunities remain uncertain, so scenario planning is essential as is reassuring customers them of the continued quality of the product.