Brexit continues to create barriers to international trade, making the road to global growth bumpier for UK apparel brands as they tackle rising export costs and increased market competition. But online marketplaces, like Asos and Zalando, can help businesses tap into a market worth an estimated £322.6bn, a new report from economics research consultancy, Retail Economics, and direct-to-consumer e-commerce platform, Tradebyte, highlights.
The publication, titled From Brexit to Breakthrough, explains that as the trade relationship between the UK and EU becomes fraught with challenges, businesses are facing uncertainties around border procedures, customs checks, and regulatory compliance. This in turn leads to delays, shortages and increased transportation costs that create a domino effect across the supply chain and, ultimately, impact exports.
"Brexit and the pandemic have significantly altered UK trade dynamics, increasing friction and significantly reducing exports to the EU. This has resulted in a sharp £18.8bn increase in net imports of retail goods since 2019," the report says.
The clothing and footwear category has been the most heavily impacted by post-Brexit regulations, the report's authors say, pointing to the potential competitive disadvantage from greater costs and delays for sellers who lack the expertise or resources to navigate the new regulatory environment.
With non-food retail exports from the UK down by almost 18% since 2019, the report urges businesses to look to online marketplaces as a way to facilitate cross-border opportunities.
"The new legal landscape following Brexit has clearly exposed challenges for UK brands and retailers looking to export. However, online opportunities remain for players that successfully navigate new EU requirements and regulations while balancing the demands of local shoppers," it says.
With logistics and regulatory support, as well as assistance in localising propositions, marketplaces can help UK exporters maximise opportunities in the EU. They also offer apparel brands the opportunity to target a younger, affluent demographic who are key drivers of consumer spending. These consumers are often drawn to the diversity and brand selection available on online platforms.
"Brexit, the pandemic, and evolving consumer demands significantly altered the UK's trade landscape, particularly with the EU," the report says. "Marketplaces have become essential platforms for brands and retailers looking to overcome these challenges and seize opportunities for international expansion."