Insight / Blog

Building new partnerships and trade with Japan

Posted on 14th September 2020

Summary: As the UK’s historic free trade agreement with Japan is announced, Doddle’s new partnership with Yamato, will transform the ecommerce market

Doddle has just signed a new partnership with Yamato, Japan’s biggest delivery service company. This partnership Yamato, promises to transform the ecommerce market. Already, Yamato has a 42% share of Japan’s colossal parcel market. The deal will provide online shoppers in Japan with more choices and forms part of our shared commitment to sustainable delivery.

Learning new lessons with new patnerships

I see three wider lessons of this partnership. First, it is a reminder of the power of business and trade to generate wealth and economic growth. This is particularly important at a time when the world economy has been battered and bruised by Covid-19. A number of governments are turning inwards and clinging to protectionism. This is the wrong response. If ever we need a commitment to international trade it is now.

When two parties trade, both sides benefit. Companies and even countries profit from specialising in what they are best at. The theory and practice of trade goes back hundreds of years. Indeed, the first Englishman in Japan, William Adams – an exceptionally well-known historical figure in Japan, where he is known as Anjin Miura – was the driving force of the first trade agreement between the two countries, between King James I and Tokugawa Ieyasu in 1613. It may seem blindingly obvious that both sides benefit from trade, but the arguments need to be constantly remade. The UK-Japan Free Trade Agreement (FTA) could increase trade flows between the two countries by an estimated £15.2 billion.

UK businesses need to think globally

A second lesson of the partnership is the need for the UK’s businesses to think globally. Our exit from the EU in January seems like a long time ago, but clearly the UK needs to build a series of new trading relationships. Already over 230,000 British businesses export, representing around 10% of all companies. When businesses export, they grow, on average, 20% more than businesses that don’t export. If you can sell your goods and services beyond your domestic market, why wouldn’t you look to do that?

Clearly, continental Europe will remain an important market due to its proximity, particularly for goods. Yet, many services do not rely on geography and the UK needs to look at a set of other trading relationships. It is estimated that over the next two decades, 90% of global growth will come from outside Europe. The USA remains our largest trading partner and other territories like Asia, Africa and Australasia are set to play an important role. Asia, fuelled by the giant economies of China and India, now represents nearly half the world’s GDP and most of global growth.

At Doddle, we are very much looking at exciting ventures all over the world. Our approach is the opposite of “Little Englander.” Last year, we started a partnership with Australia Post, who control 80% of the parcel market Down Under. In the US, Doddle has recently entered into a new partnership with the US Postal Service. Our new digital returns platform has huge potential there in what is one of the largest e-commerce markets in the world.

Whilst I am optimistic about the opportunities for UK businesses trading overseas, I am not naïve about the challenges. Over the past 40 years, I have experience of building businesses all over the world. In fact, my original business Travelex entered the Japanese market with some success in 2003. We took over the old Thomas Cook business and grew it to become the largest retail foreign exchange business in the country. Of course, it takes time to establish yourself, and build the trust and relationships that so much of business, particularly in Asia, is reliant on.

Time to step up

The third and final significance of Doddle’s tie up with Yamato is the need for business and politicians to both step up what they do. We need both trade deals, delivered by the government, and business deals. The business community cannot wait for magic from politicians. We must show our ingenuity and drive to identify new opportunities and pursue them. One of the growth areas stimulated by the pandemic is ecommerce. As a UK ecommerce business which has gone global, Doddle is in a strong position to capitalise on opportunities. The Japanese market is an exciting one, with three-quarters of the population regular e-commerce users, compared with global ecommerce penetration of 47%. Indeed, the deal with Doddle is the first time Yamato has trusted an oversees technology provider with such a significant role in their business.

Despite all the difficulties and uncertainty, compounded and magnified by Covid-19, I believe there are great opportunities for high-quality businesses. UK plc needs to continue to look for trading and other opportunities. By the same token, the government can help by making progress with its tapestry of new trade agreements, starting with the UK-Japan FTA.

Find out more about our partnership with Yamato and the digital returns journey we created in this case study.

Download for free

Sir Lloyd Dorfman CBE is the Chairman of Doddle.

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