With businesses in Britain undergoing a period of rapid readjustment on account of Brexit, there has never been a better opportunity for new branches of foreign companies, franchises and well-funded start-ups to get off the ground. This is enabling an increasing number of Asian businesses to establish themselves in the UK.
Serving the Asian community
With 500,000 Bengalis alone in the UK, there’s an extensive Asian market out there and a relatively small number of companies catering to it. Grocers and restaurants provide foods that are difficult to find in the big supermarkets and chain eateries. Tailors and fashion outlets provide clothes that can’t be bought on the high street, and there are also specialist jewellers and craft shops. The limited number of these, however, means that consumers have limited choice. They can end up paying a premium due to lack of competition, and they may not be able to find exactly what they want. Some areas where Asian communities have only recently begun to grow don’t have many such businesses at all. There are always opportunities for enterprising people to develop market niches, especially if they are in a position to import new and exciting products or set up production in Britain.
Introducing Asian expertise
It’s not just goods that Asia has to offer to Britain but also expertise. This is likely to matter more and more in the coming years, as the country has increasingly been losing skilled workers. Businesses with a strong foothold in Asian markets are in a good position to move into Britain, bringing talent from elsewhere, and then draw on local talent for other roles and gradually raise the skill level of their workforce.
Ironically, Britain is now comparatively weak in areas where it used to excel, such as infrastructure. M1 Group, which was founded by Najib Mikati, is a good example of an Asian business that was able to take advantage of this. It is now listed on both the Dubai and London stock exchanges and has developed further interests in fashion and real estate within Britain.
The strongest sector for Asian businesses in Britain is wholesale and retail. This is partly because opening small retail outlets was seen as the best way to get established by many Asian immigrants to Britain in the 1970s, and many of those family-owned businesses continue to provide vital services in local communities poorly served by larger stores. Next is business services, which is, as you might expect, concentrated in urban areas, and provides an attractive environment for ambitious young people developing their skills.
Transport and communication is another strong sector, with many taxi companies being Asian-run. It has also reaped the benefits of Asian people seeing the value of public transport at a time when government was growing less interested in it. There is also the hotel and restaurant sector, where cultural traditions focused on quality and reliability have served Asian businesses well.
Some signifiers suggest that Asian businesses already established in Britain find it harder to raise the finance they want than equivalent businesses with different ownership, but this may reflect different attitudes to debt rather than a true business weakness. Asian businesses have proven more resilient in times of recession, probably as a result of this same approach, and this may give them a further advantage as Britain faces the challenges ahead.
Sectors ripe with opportunity
It’s already clear that Brexit is going to leave some markets wide open as European firms withdraw, European products disappear from the market, and local ones are unable to meet demand. Asian companies in a position to expand would be well placed to fill the gap. Chemicals and plastics companies are already struggling due to supply chain problems. Agriculture is in trouble because of a shortage of workers to harvest crops, which may generate increased opportunities for food importers. Car companies are pulling out, and while increased costs mean that others are unlikely to move in to fill the gap, this is likely to leave a lot of highly capable manual workers looking for employment – an attractive prospect for certain types of manufacturer.
With these and other opportunities now emerging, and with the low pound making this a good time to buy up British stocks and property, there’s a lot to tempt Asian businesses with a strong home base to commence operations in Britain. If they can ride out a few difficult years, then the future could be very profitable for them.