"Boundless Opportunity" June 2014 Whitepaper from Regus.

1. Boundless
opportunity
Exporting businesses reap profits
by getting close to the customer
Regus, June 2014

2. 02Boundless opportunity / Management summary
For the third consecutive year this global study
reveals that exporting firms are enjoying healthier
revenue and profit growth compared with their
domestically focused counterparts.
One way that exporting companies maintain
and grow their customer base is by setting up
a physical presence in their target markets. This
survey confirms that that proximity to clients
carries a number of important benefits.
Four fifths of businesses report that customer
churn can be more easily reduced if a firm is
physically near customers and clients. Almost the
same proportion believe that having a presence
in foreign markets helps them solve customer
problems more easily and improves customer
satisfaction, all results that in turn also contribute
to improving retention rates. The bottomline is that
businesses regard proximity as an effective tool to
improve sales and, through closer analysis of the
customer environment and access to up-to-date
market information, develop better, more relevant
products.
But expanding abroad is no easy task and many
businesses shy away from this challenge because
they lack official support. Aside from introducing
them to new clients, businesses highlight four
top measures that their home government
trade delegations should offer to help them
in their export objectives: advice on legal and
regulatory matters; introductions to local business
associations; advice on taxation; and advice on
local customs. 30% also report that they would
benefit from a directory of good local places to
network with other companies.
Managementsummary
Four fifths of businesses report that
customer churn can be more easily
reduced if a firm is physically near
customers and clients.

3. 03Boundless opportunity / Key findings and statistics
• For the third year running this Regus survey, analysing the
responses of over 19,000 global business people, finds
that more exporting businesses are reporting good results
than those focusing exclusively on their domestic markets.
• 48% of internationally trading firms report profit growth
over the last twelve months compared to 36% of those
trading only domestically.
• Similarly, over half (55%) of internationally trading firms
report profit growth in the last year compared to 46%
domestically focused firms.
• While having a larger reach certainly helps internationally
trading businesses increase their prospects, firms globally
also report that physical proximity when expanding abroad
brings additional benefits to exporting firms.
• Specifically, 81% of businesses say that customer
retention rates can increase by physical proximity with
customers.
• Physical proximity also helps solve customer problems
(78%) and improves customer satisfaction. These two key
benefits also contribute to overall improved customer/
client retention.
• Larger businesses are particularly likely to regard physical
proximity to customers as a retention boosting benefit.
• In addition to this, 75% of firms globally believe a location
close to their customers can boost sales and half (48%)
think they could develop better products.
• But foreign expansion is a big step for businesses to
take and a difficult one if support is lacking. In particular,
global firms report that aside from making customer
introductions, home government trade delegations can
most usefully help them expand abroad by providing
advice on legal and regulatory matters (62%).
• Introductions to local business associations (44%) and
advice on taxation (43%) would also help businesses
planning foreign expansion.
• Small businesses are particularly likely to identify advice
on taxation and regulatory matters as key to helping them
set up a foreign presence.
• Finally, a third of businesses would like help with local
custom and would benefit from a directory of places to
network.
• Where these resources are not made available or are
incomplete, it is evident that partnering with businesses
that operate in their target country and can provide
useful information and networking opportunities is highly
beneficial.
statistics
key findings
and
75% of firms globally believe a
location close to their customers
can boost sales

4. 04Boundless opportunity / Introduction
As the global economy finally starts gaining momentum and
consumer spending, as well as larger government backed
infrastructure investments gain pace, exporting activity
is set to gain new momentum. Exports play a large part
in providing employment and GDP growth. For example,
exporting activity contributed to 86% of GDP in Belgium,
52% in Germany and 32% in the UK in 2012.1
Globally, trade
in services only was valued at US$4.4 trillion and accounted
for 19.4% of the world’s total exports.2
In Australia services
exports, discounting intermediate services inputs, grew by
an average of 4% per annum over the last decade reaching
18.7% of Australia’s total trade in goods and services in
2013, and services exports accounted for 17.4%
of Australia’s total exports.3
In emerging economies consumer spend is increasingly
being fuelled by a growing middle class, while in mature
economies employment is improving promising an increase
in consumption. A new world map has also emerged with
BRIC countries now regarded as safe havens for investments
and China viewed as the top investment destination by
CFOs, but improved economic outlook also means that
the UK, Germany and the USA have also seen a rise
in investment.4
Reports suggest that in 2011 only 40% of the UK’s exports
were sent to the EU and that this figure is set to continue
to decrease as UK businesses focus on exporting branded
consumer goods, aerospace, pharmaceuticals, education,
tourism and services to BRIC countries instead. Exports to
BRICS are expected to double to 16% by 2030, while the
US remains a strong export market for the UK
financial services sector.5
The UK also has strong ties with Brazil which is the UK’s
largest trading partner in Latin America with a bilateral trade
in goods worth £5.1 billion. Over the last four years, UK
exports to Brazil increased by 20%, reaching £2.5 billion
in 2013.6
1
World Bank, Export of goods and services(% GDP), 2011
2
The Australian Government Department of Foreign Affairs and
Trade, The importance of services trade to Australia
3
The Australian Government Department of Foreign Affairs and
Trade, The importance of services trade to Australia
4
BDO International, Global Ambition Survey, Infographic 2012
5
PWC, The future shape of UK exports, UK economic Outlook,
November 2012
6
UKTI, Guidance, Exporting to Brazil
Introduction
...exporting activity
contributed to 86%
of GDP in Belgium

5. 05Boundless opportunity / Introduction
But Brazil is an appealing market for other countries too,
particularly as over the past decade the country has proven
economic stability: in this period over 35 million Brazilians
entered the emerging middle class and average GDP has
grown 3.4% over the last 4 years. Brazil has identified road
and air transport, cargo logistics and energy as key areas
for development in the coming years.7
The Netherlands,
Germany and the USA are reported to be among the top
export destinations for Brazilian businesses.8
Canada continues to detain its role as the USA’s main import
and export partner, and as the pace of Chinese growth
slows and Europe’s growth forecast is revised downwards,
the overall USA export market may suffer. The OECD revised
reports for China’s growth at 7.4%, down from 8.2% and the
European Commission predicts that GDP will rise only 1.7%
in the euro-area in 2015, compared with a previous forecast
of 1.8%9
The role of energy exports is yet to be determined
as the Eurozone has recently asked the USA to increase its
shale gas exporting in order to counter Europe’s reliance
on Russia.10
The USA economy on the other hand looks more positive
and improvements cannot fail to positively impact Mexico,
one of its main trading partners. Mexico’s economy is heavily
export-based with automotive products representing 24%
of overall exports.11
U.S. consumer spending rose 3.3%
and U.S. economy expanded at a 3.2% annualised pace
in the final quarter of 2013, improving outlook for Mexican
exporters and driving up the Peso.12
In China on the other hand, year on year exports fell sharply
in March, but commentators expect to see improvements
linked to a new stimulus package which includes tax
breaks for small businesses as well as rail infrastructure
investment.13
Currently exports account for 30% of Chinese
GDP with the export of high tech products growing and
accounting for 26% of overall exports.14
7
The Observatory of economic complexity,
MacroConnections, The MIT Media Lab
8
The Observatory of economic complexity,
MacroConnections, The MIT Media Lab
9
Bloomberg, Growing Exports Shrink U.S. Trade Gap as
Global Demand Stirs, 6th May 2014
10
The Guardian, European leaders ask Obama to allow
increased exports of US shale gas, 26th March 2014
11
Tradingeconomics, Mexico Exports
12
Bloomberg, Mexico’s Peso Advances as U.S. GDP Growth
Buoys Export Outlook, 30th January 2014
13
BBC, Chinese exports and imports fall sharply in March,
14th April 2014
14
Tradingeconomics, China Exports
...over 35 million Brazilians
entered the emerging
middle class and average
GDP has grown 3.4% over
the last 4 years.

6. 06Boundless opportunity / Introduction
Foreign companies are taking tentative steps in India
as concerns over corruption, bureaucracy and political
uncertainty take their toll on the decision to expand in
spite of government measures to encourage foreign direct
investment. On the other hand, the Rupee’s weakness in
2013 should boost exports and the country is working on
FTAs with Japan, ASEAN and the EU.15
The Eurozone, representing 20% of global GDP, is slowly
regaining momentum although many countries still face a
tight credit environment, sovereign debt issues and austerity
measures. In spite of this, GDP is expected to grow by 1% in
2014 and 1.7% 2015.16
Although the Euro has appreciated
over the last two years, its strength hasn’t hampered export
growth: in February the Eurozone’s exports exceeded its
imports by €13.6 billion ($18.8 billion) compared with a year-
on-year surplus of €9.8 billion.17
In addition to this, domestic
demand growth suggests that intra-European trade is also
set to improve.18
In order to provide an analysis of the benefits and challenges
to exporting that businesses of all sizes and from all sectors
are facing across the globe, Regus commissioned this
research report interviewing over 19,000 senior managers
and business owners globally. Now at its third iteration, the
survey delves into the perceived benefits of customer/client
proximity and home government trade delegation assistance
with exporting.
15
EDC, Country overview: India, March 2014
16
EDC, Country overview: Eurozone, March 2014
17
The Wall Street Journal, Exports Boost Euro-Zone Trade
Surplus, 15th April 2014
18
FXStreet, Eurozone: Export recovery and signs of greater
strength in internal demand, 15th April 2014
For the third year running, evidence
from the survey indicates that firms
trading internationally are more likely
to report growing profits or revenues

7. 07
46%
36%
55%
48%
40 0
Mainly
internationally
trading
Mainly
internationally
trading
Mainly
domestically
trading
Mainly
domestically
trading
55 50
45
30
50
40
‘My company revenues have grown in
the past twelve months’
‘My profits have grown in the
past 12 months’
Boundless opportunity / The numbers behind the growth
Figure 1
Mainly internationally and mainly domestically
trading businesses reporting an increase in
revenues in the past twelve months
Figure 2
Mainly internationally and mainly domestically
trading businesses reporting an increase in profits
in the past twelve months
For the third year running, evidence from the survey indicates
that firms trading internationally are more likely to report
growing profits or revenues, or both, than those focusing
only on their domestic market. These results suggest that
foreign expansion has a positive effect on businesses
allowing them to pursue growing markets, by changing
target area when demand is weak for example.
A larger pool of potential customers/clients is also available
to businesses that have operations in more than one country
suggesting that domestically-focused companies would do
well to consider expanding in neighbouring markets.
Businesses mainly trading internationally are more likely
(55%) to report that they have seen an increase in revenues
over the past twelve months (Fi g. 1) than those focusing
exclusively on domestic markets (46%). Similarly, half (48%)
of exporters report an increase in profits compared to only
just over a third of mainly domestically focused firms (Fig. 2).
The numbers
behind the
growth
20
10

8. 08Boundless opportunity / Close to their hearts
‘Proximity to our customers/clients helps to...’
Figure 3
Respondents report which benefits their business can draw from proximity of location to their customers/clients.
Businesses in the countries analysed were also asked
to highlight the main benefits that proximity, in terms of
physical location, to customers or clients could bring. The
main benefit, selected by four fifths of respondents is an
improvement in customer retention rates as depicted
by figure 3.
Given that studies report that acquiring new business can be
5 times more expensive than retaining customers and that
increasing customer retention by just 2% can equate a 10%
cost reduction, this outcome for establishing a presence
close to customers is very important.19
In the retail sector
in particular, case studies have shown that a 15% of ‘loyal’
customers is responsible for fully 50% of sales revenue.20
Close to their
hearts
90
80
70
60
50
40
30
Improve
customer
retention rates
Improve
customer
satisfaction
Deal more
effectively
with customer
problems
Understand
customers and
markets better
Boost sales Improve our
marketing
effectiveness
Develop better
products
Chase up
customer
payments
81%
78% 78% 77% 75%
67%
48%
37%
19
Mtab, Customer Retention Rate – What does it mean?
20
Mtab, Customer Retention Rate – What does it mean?

9. 09Boundless opportunity / Close to their hearts
Top three benefits of customer proximity by country
Figure 4
Respondents report the top three benefits their business can draw from proximity of location to their customers/clients by country
The next three benefits, chosen by over three quarters of
respondents, can be regarded as ones leading to better
customer retention. By being located closer to their
customers businesses report better satisfaction rates, easier
problem resolution and a better understanding of the market.
But physical proximity can also help with chasing slow
payments and developing better products that respond
more closely and rapidly to customer needs as they arise.
Emerging markets are particularly responsive to the benefits
of proximity to customers with China, Brazil and India
scoring all top three benefits highly. Mexico, Canada and
Australia also recognise a significant advantage from physical
proximity. Belgium, ships 72% of its exports to nearby EU
countries which may explain their greater reluctance to
score location benefits.21
95%
90%
85%
80%
75%
70%
65%
60%
21
ING, ING International Trade Study, Belgium, 2012
Globalaverage
UK
USA
France
Germ
any
India
China
Belgium
Netherlands
Brazil
South
Africa
Japan
Australia
Canada
M
exico
Improve customer retention rates Improve customer satisfaction Deal more effectively with customer problems
72%of Belgium’s exports ship
to nearby EU countries

10. 10Boundless opportunity / A helping hand
Types of government help regarded as crucial to setting up abroad
Figure 5
Respondents report the types of government help that would be crucial to help set up abroad aside from customer introductions
Businesses were also asked to report which types of
home government trade delegation assistance, aside from
introductions to new clients, they regarded as vital to helping
them set up a presence abroad. The top three measures
voted by respondents are: advice on legal and regulatory
matters, introductions to local business associations or
organisations and taxation advice (Fig. 5).
A third also reported they would benefit from advice on local
culture and customs and locations for business networking.
A fifth of respondents reported they would like to have
access to a directory of suppliers when they set up
presence abroad.
A helping
hand
70
60
50
40
30
20
10
0
Legal and
regulatory matters
advice
Introductions to
local business
organisations/
associations
Taxation advice Information on
local culture etc
Boost sales
Information
on networking
locations
Supplier directory Staff recruitment
service
Directory of
flexible workspace
providers
62%
44% 43%
33%
30%
19%
16%
13%

11. 11Boundless opportunity / A helping hand
The proportion of companies selecting each of these benefits
varies significantly from country to country as displayed in
figure 6. Requests for advice on legal and regulatory matters
peak in Japan, India and Mexico for example, while, among
the countries analysed, Chinese businesses are the most
concerned with taxation advice.
Types of government help regarded as crucial to setting up abroad
Figure 6
Respondents report the types of government help that would be crucial to help set up abroad aside from customer
introductions by country
80%
70%
60%
50%
40%
30%
20%
Globalaverage
UK
USA
France
Germ
any
India
China
Belgium
Netherlands
Brazil
South
Africa
Japan
Australia
Canada
M
exico
Legal and regulatory matters advice Introductions to local business organisations/associations Taxation advice
43%regard taxation advice as
crucial to setting up abroad.

12. 12Boundless opportunity / Conclusion
Types of government help regarded as crucial to setting up abroad
This survey confirms for the third year running that exporting
firms report higher profits or revenues, or both, than
businesses that focus solely on their domestic markets.
This may be because exporting businesses have a wider
customer base, or that they are better able to shift their
focus to areas of the world where demand for their products
or services is growing. But respondents also cite a number
of other benefits to having a physical presence close to
their customers.
Conclusion
Greater customer satisfaction
can be achieved by setting up
a location in proximity to your
customers or clients.
In particular, businesses report that better customer
retention, faster problem resolution and greater customer
satisfaction can be achieved by setting up a location in
proximity to their customers or clients. In addition to these
benefits, exporting businesses need to be able to expand
and retract from different foreign markets in order to follow
the shift in demand for their goods or services. This type
of agility requires a level of flexibility that is difficult for
businesses to achieve, particularly when setting up a new
presence requires learning about different regulations,
taxation and markets.
Businesses globally report that the best help they could
expect from home government trade delegations when
planning to expand abroad, aside from client introductions,
is legal and regulatory advice, taxation and local custom
information and tips on where to network and meet local
business organisations. Where this information is not
made available or is incomplete, businesses would do
best to partner with firms based in the target country that
understand the world of business and that can provide all
the connections and information required to succeed.

13. 13Boundless opportunity / Country highlights
Country highlights
France
• French businesses say that being located close
to their customers can improve their marketing
effectiveness (76%)
• When expanding abroad 62% of French
businesses say government advice on legal
and regulatory matters is crucial, followed by
introduction to local business associations
(51%) and information on local networking
events (38%)
UK
• 76% of UK firms say that being able to operate
from a work location close to their customers
will definitely help improve customer retention
rates
• When expanding abroad 60% of UK
businesses find government support on foreign
rules and regulatory matters crucial
Canada
• Canadian businesses seek government
support on rules and regulatory matters (63%)
• 82% of Canadian businesses believe that being
located closer to their customers will help
understand them and the market better
Germany
• German respondents say that being able to
operate closer to customers helps to improve
customer retention rates (81%)
• German businesses identify advice on foreign
rules and regulations (68%) as crucial
The Netherlands
• When it comes to expansion abroad, Dutch
respondents identify three crucial types of
government support: advice on legal and
regulatory matters (53%), information on local
customs and styles (51%) and advice on
taxation (47%)
• Dutch firms identify improvement of customer
retention rates (85%) as the main benefit of
being located close to their customers
Belgium
• 59% of Belgian respondents find government
advice on rules and regulations crucial when
expanding abroad
• The top three reasons for physical proximity
according to Belgian firms are: better
understanding of their customers and markets
(79%), improvement of marketing effectiveness
(73%) and a boost in sales (71%)
South Africa
• In South Africa 82% of businesses say that
being closer to their customers improves their
retention rates
• When expanding abroad the support South
African businesses seek from their government
is advice on foreign rules and regulations (60%)
and introduction to local business associations
(53%)
China
• Chinese respondents believe that being closer
to their customers and markets definitely
helps in dealing more effectively with customer
problems (94%), improves customer retention
rates (92%) and customer satisfaction (84%)
• When looking to expand abroad the main
support Chinese businesses seek from their
government is advice on rules and regulations
(57%) and on taxation (56%)
India
• In India almost three quarters of businesses
believe government advice on rules and
regulations (70%) is crucial
• 81% of Indian firms believe being located
closer to the customer improves satisfaction
and 82% that it will boost sales
Mexico
• In Mexico respondents believe that operating
closer to their customers will boost sales (91%)
and improves customer satisfaction (84%)
• When asked which support they seek from
their home government almost three quarters
of Mexican businesses responded advice on
rules and regulations (72%)
Japan
• 90% of Japanese firms believe that a location
close to their customers can boost sales
and 77% thinks it will give them a better
understanding of their customers and markets.
• Government advice on foreign rules and
regulations (77%) and advice on taxation
(51%) is crucial when expanding abroad, say
Japanese firms
Australia
• 85% of Australian businesses report that
physical proximity to customers can boost
sales and 82% say it will improve customer
retention rates
• When expanding abroad Australian firms find
government advice on rules and regulatory
matters (65%) and introduction to local
business associations (48%) crucial
Brazil
• 86% of Brazilian firms believe physical
proximity contributes to dealing more effectively
with customer problems
• More than half of respondents say that
introductions to local business associations by
their government is crucial when expanding
abroad (51%), followed by advice on rules and
regulations (48%)
USA
• When expanding abroad 57% of US firms
identify government support on legal and
regulatory matters as key
• 85% of US respondents report that being
located close to customers improves customer
satisfaction and 84% believes it will boost sales

14. 14Boundless opportunity / Methodology
Types of government help regarded as crucial to setting up abroad
Over 19,000 business respondents from 96 countries were
interviewed during January 2014. These were sourced from
Regus’ global contacts database of over 1 million business-
people worldwide which is highly representative of senior
managers and owners in business across the globe.
Respondents were asked where their business was
experiencing growth: whether in domestic markets or mainly
in international markets. They were also asked to evaluate
the measures that would help businesses set up a location
in a foreign country and to identify the main benefits from
physical proximity to customers/clients. The survey was
managed and administered by the independent organisation,
MindMetre Research,
mindmetreresearch.com
Methodology
19,000business respondents
interviewed
96countries
Respondents were asked where their business was experiencing growth:
whether in domestic markets or mainly in international markets.

15. 15Boundless opportunity / About Regus
Types of government help regarded as crucial to setting up abroad
It’s network of more than 2,000 business centres in 102
countries provides convenient, high-quality, fully serviced
spaces for people to work, whether for a few minutes
or a few years. Companies like Google, Toshiba and
GlaxoSmithKline choose Regus so that they can work
flexibly and make their businesses more successful.
The key to flexible working is convenience and so Regus is
opening wherever it’s 1.5million members want support –
city centres, suburban districts, shopping centres and retail
outlets, railway stations, motorway service stations and even
community centres.
Founded in Brussels, Belgium, in 1989, Regus is based in
Luxembourg and listed on the London Stock Exchange.
For more information, please visit regus.com
About Regus