Economy

Australian businesses look to British expansion despite economic woes

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Australian businesses should consider expanding into Britain or using it as a springboard into Europe, despite the country’s deep recession, a senior Austrade official says.

Australian businesses should consider expanding into Britain or using it as a springboard into Europe, despite the country’s deep recession, a senior Austrade official says.

Amit Aggarwal, Austrade UK’s business development director, concedes the British economy is struggle at the moment, but insists smart businesses can make the most of the downturn in there.

“The UK has its challenges like everywhere else, but there are some generic opportunities for companies that are keen to establish a presence. There are more relatively skilled people also – unfortunately not for good reasons – but there is more availability of good labour.”

While Britain experienced a sharp 0.5% drop in GDP during the third quarter – the first drop in 16 years – Aggarwal also says the Government is set to pour billions of pounds into programs to bring the country out of a recession.

“It’s important to note that 40% of the UK economy is effectively Government expenditure. The Brown Government has committed to maintaining a fiscal position that supports the wider economy. Things like healthcare and the Olympics are ongoing opportunities.”

Despite the malaise, SmartCompany has recently spoken to a number of companies targeting the British market, including fashion group Mimco and mortgage company Bluestone Group.

Aggarwal also points to shopping centre giant Westfield, which recently opened its first major retail mall in central London.

“That has enabled some companies to take a store they might not otherwise have. Boost Juice and Ugg have also used the Westfield area to open their first stores in London.”

But Aggarwal says companies need to prepare their expansion into Britain with care, and not assume they can jump in to the market without thinking it through.

“If you have a product, a tangible product, the first question you need to ask is, “is there a market?” and “what is it about my product that makes it the right product?” It’s all very well to see that Britain spends £50 million a year on shoes, but if your shoes don’t fit in then you’re not going to succeed.”

For those companies thinking of moving into Britain, Aggarwal says the hard work must start at home.

“The hardest thing about doing business in the UK is relationship building. Why try and build relationships from scratch when you can leverage of your existing relationships in Australia?”

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