Only half of the UK’s small online businesses are selling to customers abroad despite high customer demand for British goods, new research from PayPal has shown. 
The survey, conducted by Ipsos MORI on behalf of PayPal, questioned more than 1,200 small and medium-sized businesses in major online retail markets – including the UK, the US, France, Germany, Italy and Spain – to find out about their international sales strategies. The results show that just 56% of UK small online businesses have capitalised on international sales, compared to 64% in France and 61% in Spain.
The findings come despite an earlier PayPal study suggesting there is higher consumer demand for British goods over goods from any other major European market. An estimated 86.4m online shoppers from 29 countries bought from the UK in the last 12 months, PayPal showed.
According to PayPal, offering free shipping could unlock international online sales as a quarter of businesses cited shipping and the associated costs as the top barrier to selling abroad; while customs and duties (20%) were the second most cited concern. Conversely, the single most attractive driver for shoppers buying from overseas is free delivery.
Simon Moran, senior director of strategic client services, PayPal UK, said: “The UK is more popular than ever as a destination for online shoppers worldwide and 2015 proved to be a real tipping point. Simple changes to your online store such as accepting multiple currencies, offering different languages, and keeping shipping costs low can have an immediate impact on sales.”
According to the survey respondents, international online sales among UK small businesses are currently dominated by customers closer to home with combined sales to European countries accounting for 61% of total cross-border sales value. North America is named as the UK’s second largest market generating 20% of UK online sales, and Asia comes third with 6% of international sales.

China, however, remains a real growth opportunity, PayPal said.
While UK online businesses identified Asia as only the third largest international sales market, results from PayPal’s earlier consumer survey show that among 29 countries surveyed, demand for British goods is highest among Chinese customers. An estimated 21.9m online shoppers in China bought from UK retailers in 2015.