Why the English language is a deal breaker for growing British brands
British brands are increasingly choosing to expand into English-speaking markets instead of Europe; Rob Watt looks at why
When a business is looking to expand outside its launch market, how does it best decide where to target? Its nearest geographical neighbour? Somewhere with a cultural fit to its existing market? A place with relaxed regulation or tax implications?
While Europe is still the dominant expansion zone, if the latest league tables are anything to go by British businesses are increasingly seeking to focus a considerable amount of their expansion into markets where English is the predominant language.
A list of Britain’s Top 200 mid-market private companies with the fastest-growing exports, published recently in The Sunday Times, showed that a significant number of them have largely expanded by acquiring businesses or opening new offices in English-speaking countries – that is the US, Canada, Australia, New Zealand, South Africa and Ireland.
Not always the biggest territories but with one major factor in common: language.
Of the 200 companies listed, well over 60% are looking to one or more of these markets for their next opportunities: 125 carried out their main export business in North America, while Australasia has welcomed 59 businesses.
Companies focusing their attentions on these regions include BrewDog, JoJo Maman Bebe and, yes, MC&C’s latest client, Lovehoney.
That North America is up there shouldn’t come as any surprise, but why Canada, South Africa or New Zealand?
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My only conclusion is that clients looking for early international growth – particularly in e-commerce – are taking advantage of a number of factors that make the commonality of language a major advantage.
The big digital media partners – Google and Facebook – are very strong in these markets; programmatic trading desks that plug into multiple exchanges can be operated from a single location; and no copy translation is required across any digital assets, ensuring from day one you can scale quickly, with reach and dwell time increasing exponentially.
Businesses can dip their toe in the water digitally and gauge their success using solid benchmarks without changing too many variables. With a common language transcreation is quicker and less expensive.
A brand can scale faster with a smaller team – perhaps even an existing team based in the UK. No large-scale physical presence is required until they have made solid inroads in that market.
The combined population of all these countries may still be 200m less than that of Europe, but the ease of transference will gain more eyeballs faster and arguably pay dividends quickly.
This month at MC&C we’ve announced that we’ve been appointed the global media planning and buying business for Lovehoney, the world’s largest online manufacturer and distributor of pleasure products and lingerie.
As an ecommerce business Lovehoney’s UK revenue is all generated from its powerful website. When moving into the US and Australia there has been little besides the currency that needed to be changed before their main asset was ready to roll for millions of new eyeballs.
The Bath-based ecommerce business, which holds the exclusive rights to make Fifty Shades of Grey adult toys, has nine international websites.
They have recently launched new customer care centres and warehouses in Brisbane, Australia, and Atlanta in the US, which boosted their exports to £26.2m in 2017. Sales growth in the USA and Australia outstrips that in Europe, with growth rates of 70% vs 50%.
Of course, Lovehoney has been helped by a common cultural heritage across these English-speaking countries, but our conclusion, which we believe will hold true for many other exporters, is that growth is driven by confident and sure-footed marketing investments.
Being able to make those investments at speed, with direct reference back to the mother market, is much easier when learning can be lifted rather than translated.
Rob Watt is managing director at MC&C International