International demand for Australian products presents a significant opportunity for local small and medium sized businesses (SMBs), provided they have the right tools to grow.
Many businesses are already reaping the benefits of cross-border trade, according to new research from FedEx Express. In a survey of 250 Australian SMBs, half said cross-border activity accounted for 50 per cent of their annual turnover.
This shows no sign of slowing down—nine in 10 said they were confident their imports or exports will either stay the same or increase over the next 12 months.
Kim Garner, MD of international operations, FedEx Express said Australian products are in high demand because they are seen as good quality and good value for money.
The study found the top three markets for Australian exports are New Zealand (34 per cent), China (28 per cent) and the United States (24 per cent).
Demand for Australian products in China has grown in recent years and SMBs are now looking to diversify their exports to other Asian countries like Laos and India, said Garner.
“This demand is likely underpinned by a growing middleclass in Southeast Asia. Southeast Asian consumers have a perception that Australian goods are inherently better quality, a perception that undoubtedly provides a significant market opportunity for Australian businesses.”
Challenges holding Australian businesses back
While there is definitely a market for Australian products overseas, issues including trade tariffs, market entry costs and cash flow are all significant challenges holding SMBs back.
A lack of knowledge when it comes to regulations and customs requirements also prevents Australian companies from tapping into new markets.
To help tackle these problems, many SMBs are focused on introducing new technologies into their businesses.
Around one in four respondents (76 per cent) have used new technologies like mobile payments, automation and advanced analytics in the last two years, and half (48 per cent) expect to increase their usage in the next 12 months.
This investment in and adoption of technology is driven by the belief that it will reduce costs (41 per cent), speed up distribution (38 per cent) and provide access to new markets (35 per cent).
“For Australian businesses, access to global markets connects them to more possibilities to grow their business,” said Garner.
“With these benefits in mind, we are likely to see a greater uptake of new technologies to enhance the cross-border trade process.”