Survey sees trade opportunities for Australian SMBs
Thursday, 28th June 2018.
International demand for Australian products present a significant opportunity for Australian small- and medium-size businesses (SMBs) to grow their business through cross-border trade over the next 12 months, according to independent research conducted by FedEx Express.
Many SMBs are already reaping the benefits of cross-border trade, with half of the 250 Australian SMBs surveyed citing cross-border activity as accounting for 50 per cent of their annual turnover. The outlook for cross-border trade looks equally optimistic, with nine in 10 SMBs confident that their imports or exports will either stay the same or increase over the next 12 months.
Driving this trend is quality. Australian products remain in high-demand abroad with 49 per cent of respondents citing the perception of quality as one of the predominant reasons, followed by good value for money (38 per cent) and the reputation of Australian-made products (36 per cent). Opportunities remain plentiful, however demand across markets is changing.
When it comes to export, the current top three markets for Australian businesses are New Zealand (34 per cent), China (28 per cent) and the United States (24 per cent). Moving forward, Australian SMBs are looking to increase export to other markets such as India, Germany and Laos.
At present, Australian SMBs mainly import from North Asia (67 per cent), ahead of Southeast Asia (46 per cent). However, respondents are also looking to increase import opportunities in Southeast Asia (52 per cent), including countries such as Singapore, Thailand, Indonesia and Laos.
Delivery and logistics are key to seamless cross-border shipping and trade
Despite the clear opportunities, there are challenges to entry into cross-border trade. The research demonstrates the most prominent challenges preventing Australian SMBs from partaking in cross-border trade are costs (58 per cent) and knowledge (50 per cent). Trade tariffs (31 per cent , market entry costs (28 per cent) and cash flow (24 per cent) are the key cost barriers, while, complex regulations, compliance and processes (30 per cent), understanding customs requirements (25 per cent) and knowledge and expertise (19 per cent) are the key knowledge barriers preventing Australian businesses from tapping into new markets.
Challenges within the supply chain are also barriers to engaging in international trade, with business owners citing diverse factors such as understanding complex regulatory, compliance and process matters (60 per cent), internal challenges such as cash flow, time and resources (60 per cent) and reliable logistics solutions (59 per cent).
However, delivery and logistics can provide the support that SMBs need to grow their business successfully in international markets. Reliable delivery services (70 per cent), transparent tracking solutions (69 per cent) and affordable delivery solutions (68 per cent) are all critical factors in a successful cross-border trade strategy.