DISCOVER THE NEXT STAGE OF GROWTH IN ASIA - ANZ€¦ · business decision makers. We encourage you to share it with your network to continue the conversation and identify the growth

DISCOVER THE NEXT STAGE OF GROWTH IN ASIAANZ OPPORTUNITY ASIA REPORT

Key findings from this year's survey of 1,000 Australian businesses

KEY FINDINGS

EXECUTIVE SUMMARY

Industries across Australia can scale to meet demand in Asia

Case study: Investigating the market - Zonzo Estate Winery

1. THE BIG OPPORTUNITY

Growth of middle class consumers in Asia is impacting traditional retail

Case study: Embracing ecommerce - Slim Secrets

2. THE CONSUMER APPROACH

Worldwide logistics is booming to keep up with ecommerce growth

Case study: Logistics expansion – Yang Kee/AXIMA Logistics

3. DELIVERING THE GOODS

Services and related industries already growing to meet demand

Case study: Brand and IP protection - Spruson and Ferguson

4. GROWTH BEYOND TRADE

CLOSING REMARKS

BUILD YOUR STRATEGY

ABOUT ANZ

CONTENTS

06

04

08

24

38

54

64

66

68

EXECUTIVE SUMMARYSeveral industry sectors stand out in this report as growth opportunities in Asia including the export of food, beverages and premium consumer goods, along with healthcare, education and tourism. The number of visits and spending by tourists from Asia has reached record levels over the last 12 months. Visitors are experiencing ‘Brand Australia’ first hand and sharing their stories widely with friends and family on social media in Asia.

We investigate the growth opportunity in service industries, which currently employ the majority of the workforce in Australia; however official statistics indicate we are underweight compared to other nations when exporting services. Our survey results indicate the situation may be improving with 35% of businesses exporting to Asia now exporting services.

We have included case studies throughout the report that delve into the challenges that Australian businesses face at various stages of international expansion. The key challenges include market research, ecommerce, exports and logistics, along with the key steps required to protect brand and intellectual property in Asian markets.

This report also covers the disruptive power of ecommerce; the way it is transforming logistics and the impact it is having on traditional retail. Around half of businesses surveyed are using ecommerce to sell their products, however, only 24% of small businesses are doing so. We explore how this ‘digital key’ can unlock revenue growth.

We invite you to discover the key findings this report has highlighted based on the insights from 1,000 Australian business decision makers. We encourage you to share it with your network to continue the conversation and identify the growth trends that your business can capitalise on.

The 2018 ANZ Opportunity Asia Report is a survey of 1,000 Australian business decision makers across a variety of industries. Our ANZ International Business Development Team has produced this fourth consecutive report with research partner EY Sweeney and it indicates a positive outlook for Australian businesses already doing business with Asia and those intending to.

This report highlights a number of trends, which indicate the next stage of growth in Asia and we hope it reveals opportunities that can help grow your business. We investigate key industries in Australia that can scale to meet demand from a growing middle class population all across Asia.

We have combined the trends from this survey with overall business activity recorded by the Australian Bureau of Statistics and the opportunities are compelling. If businesses in Australia acted on their intention to do business with Asia, an additional $393 billion of revenue could flow into Australia.

Capturing this revenue requires a significant increase in workforce. Survey results indicate that Australian businesses have collectively hired approximately 889,000 staff in Australia to support their Asia operations in the last three years and could potentially hire approximately 927,000 over the next three years to keep up with demand.

From the businesses surveyed that are already active in Asia, 61% expect to expand their operations. A third of those companies make more than 40% of their total revenue from Asia. Although China is a dominant feature of trade statistics, 67% of businesses surveyed in this report are also trading with ASEAN countries.

4ANZ OPPORTUNITY ASIA REPORT 2018


$393 billion approximately $393 billion of additional revenue could flow into Australia if businesses act on their plans to expand into Asia.

889,000 Australian businesses collectively hired approximately 889k staff to support their Asia business activities in the past three years.

927,000 Australian businesses are looking to collectively hire approximately 927k staff in the next three years to support future demand in Asia.

1/2 Around half of exporters surveyed are engaging in ecommerce to sell their products, however only 24% of small business exporters are doing so.

The annual 2018 ANZ Opportunity Asia Report, now in its fourth year, is

a survey of 1,000 Australian business decision makers across a variety of

industries. It provides a positive outlook for Australian organisations already

doing business with or in Asia and those intending to. The following key

findings stand out as highlights in this year’s survey.

KEY FINDINGS


1 in 3 surveyed businesses active in Asia make more than 40% of their total revenue there.

61% of surveyed businesses active in Asia expect to expand their operations in the next three years.

43% of businesses surveyed found the amount of capital required to establish Asian operations was higher than expected.

35% of exporters to Asia surveyed are exporting services (some are also exporting products).

84% of exporters surveyed are distributing physical goods, with 53% of those utilising distribution centres/hubs in Asia, most often in China, Hong Kong or Singapore.

67% of surveyed businesses active in Asia trade with ASEAN countries, and 63% with Greater China.


THE BIG OPPORTUNITYGROWTH IN ASIA

Businesses across the country are already growing to meet demand in Asia, with data from the survey indicating

that Australian businesses hired approximately 889,000 staff over the last three years to support operations and

trade in Asia, and a further 927,000 potential employees are required in future.

Demand for quality Australian products and services are driving

businesses to capitalise on opportunities across Asia. In 2017, findings

from this report estimated that Australian businesses stood to gain $278

billion in additional revenue from expanding into Asia. Twelve months on,

this year’s survey suggests that Australian business sentiment continues

to be positive, with the estimate rising to more than $393 billion.

1

$393 billion The additional revenue Australian businesses can unlock by acting on their intention to expand business operations in Asia.


67% of surveyed businesses active in Asia trade with ASEAN countries, and 63% with Greater China.

CONTINUED GROWTH IN ASIA

As Australia’s largest trading partner, many businesses

surveyed who are already active in Asia are conducting

business with Greater China (63%). However, 67% of the

businesses surveyed who are active in Asia are engaged

with ASEAN countries. An estimated combined GDP

of USD$2.7 trillion and strong growth has seen ASEAN

emerge as an important market. With around 650

million people (60% are under 35 years old) it is the

world’s third largest consumer market, in population

terms, behind China and India1.

The economic growth across Asia will continue to provide

opportunities for Australian business. During

the next decade it is estimated that China will reach

“high income status” enabling more middle class

consumers to enjoy the spending power and lifestyles

enjoyed by major countries during the late 20th century2.

This transformation in China has been making headlines

for many years, and although the overall GDP growth

has slowed, the economy is double the size it was during

the Beijing Olympics in 20083.

OPERATIONS AND BUSINESS DEALINGS - TOP 6 MARKETS

Greater China

Singapore

Japan

Malaysia

Indonesia

63%

34%

28%

27%

24%

22%Thailand

THE BIG OPPORTUNITY


REVENUE PROGRESS

The proportion of businesses surveyed that are

active in Asia, that generated more than 40% of their

revenue from there, has risen from 22% in 2016

to 33% in 2018. Those indicating that less than 20%

of their revenue is from Asia have been steadily falling

over the last 4 years, while those generating 21%

to 30% of their revenue from Asia has steadily risen.

Greater China (36% of Asian revenue) and ASEAN

(27% of Asian revenue) remain the highest sources

of revenue from Asia for Australian businesses.

The share of revenue derived from North Asia

(Japan & South Korea) continues to increase steadily,

from 9% in 2015 to 13% in 2018. The Japan-Australia

Economic Partnership Agreement (JAEPA) and

the Korea-Australia Free Trade Agreement (KAFTA)

are both being utilised by exporters and delivering

benefits. Businesses surveyed are indicating

continued growth in Asia, with 61% expecting

growth in their operations. This represents a

significant ratio of 6:1 compared to those surveyed

who expect a contraction (11%).

The proportion of overall revenue from Asia

has continued to grow to an average of 33% this

year. However, operating costs continue to climb

as well, from an average of 23% attributed to Asia

operations in 2016, to 29% of costs in 2018.

1 in 3surveyed businesses active in Asia make more than 40% of their total revenue there.

1 in 10 surveyed businesses active in Asia make more than 70% of their revenue from there.

THE BIG OPPORTUNITY

1 0ANZ OPPORTUNITY ASIA REPORT 2018

The average proportion of revenue generated in Asia, from businesses surveyed who are active in Asia,

has been steadily rising over time to 33%. The second chart below identifies the individual bands of revenue

generation from this year's survey.

PROPORTION OF OVERALL REVENUE FROM ASIA

15%1% – 10%

12%11% – 20%

18%21% – 30%

15%31% – 40%

10%41% – 50%

9%51% – 60%

5%61% – 70%

9%More than 70%

7%Unknown or 0

25%

30%33%

2016 2017 2018

THE BIG OPPORTUNITY



PROFIT MARGINS

When comparing revenue, 26% of businesses

surveyed indicated that profit margins from Asian

operations were much higher than their Australian

operations. This number has been growing steadily

since 2016, when that figure was just 16%.

A focus on producing premium, high quality goods

and services for key markets in Asia appears to be

paying dividends for Australian businesses and it

provides an excellent opportunity to build on that

reputation and leverage it into other regions in Asia.

ASIAN VS. AUSTRALIAN PROFIT MARGINS

2018 5726%31%25%11%4%4% 15

21%35%26%9%4%5%2017 56 13

16%26%30%13%9%5%2016 43 22

ABOUT THE SAME ABOUT THE SAME MUCH HIGHER

DON'T KNOW A LITTLE LOWER A LITTLE HIGHER

HIGHER %

LOWER%

THE BIG OPPORTUNITY


A special report by the ANZ Research team this year has uncovered several themes which indicate the strong

growth potential of Australia-ASEAN trade. We have included key highlights from the report here.

“The strong ASEAN-Australia trading relationship is set for further growth through conditions that already exist today - from the scale of markets in ASEAN to the proximity, historical ties and market access that ASEAN and Australia share. And ASEAN’s attractive market dynamics are driving this potential even higher, presenting growing opportunities for more Australian companies across a diverse range of industries. Through these conditions and the interest we’re seeing from companies now seeking to enter the region, we’re confident that Australia’s relationship with this large regional economy will continue to flourish.”

David Green, CEO Singapore and Head of South East Asia, India and the Middle East, ANZ

ANZ RESEARCH – ASIA INSIGHT REPORT

AUSTRALIA-ASEAN TRADE LINKS:

IMMENSE POTENTIAL TO GROW

ASEAN has emerged as a hub for trade and

manufacturing for the world over the past two

decades. Today the region continues to stand out as

one with significant potential and compelling business

opportunities, supported by its many advantages

including a thriving young population, growing middle

class and rising demand growth across various sectors.

Despite this, the scale of the ASEAN opportunity for

Australian businesses is often underestimated.

ASEAN and Australia share a dynamic and

complementary relationship, and ASEAN as a

grouping is Australia’s third biggest trading partner

after China and Europe. With strong demand growth,

rising standards of living and a sizable infrastructure

deficit, the potential for Australia-ASEAN trade and

investment is expected to exceed USD210 billion

by 2025. We will look at how and where Australian

businesses have the greatest opportunity to

participate in the next wave of ASEAN’s growth.

WHY ASEAN STANDS OUT

ASEAN is set to become the fourth-largest market after

the EU, US and China by 2030. Its population which now

stands at 650 million is growing by 7 million a

year and nominal GDP has reached USD2.7 trillion -

a near doubling in the past decade. The median age

of ASEAN’s population is well below other bigger

economies like China and Korea, which are increasingly

grappling with an older population. Among the

developing Asian economies, ASEAN’s median age

comes close to India’s which is well recognised as a

country with a substantial ‘demographic dividend’.

A growing urban population and a thriving middle

class can feed through into higher economic growth.

With ASEAN contributing to Asia’s growing middle

class, there will likely be assimilation of new skills, better

technology and a growing need for new investment.

ASEAN provides a solid consumption base for Australia’s

goods and services and is slowly developing into a

region with a skilled workforce to invest in.

OPPORTUNITIES FOR MORE AUSTRALIA-

ASEAN TRADE

While current trade in goods and services is strong,

much of it is concentrated in four out of the ten ASEAN

countries. ASEAN’s share of total trade with Australia

has largely been stagnant in recent years, and the

two-way flow of investments between ASEAN and

Australia is heavily concentrated within Singapore.

For trade in services, ASEAN’s share at 16% in FY2016-17

for Australia’s services exports is much higher than the

goods share of 10%. The largest services export earner

for Australia from ASEAN is from international students,

followed by tourism. Australia’s excellent reputation

for top-quality education, along with its proximity to

Asia helped drive export earnings from the education

sector to a record USD$31bn in 2017.


ASEAN’S GROWING IMPORTANCE IN OVERALL AUSTRALIAN TRADE

Note: Data is for FY2016-17, ending September 2017. It includes both goods and services Source: DFAT, ANZ Research

Australia New Zealand

Export

11bnUSD

Import

10bnUSD

3.6%

Export

33.1bnUSD

Import

45.6bnUSD

ASEAN

13.7%

Export

219.8bnUSD

Import

101.3bnUSD

Asia ex ASEAN

50%

Export

27.5bnUSD

Import

51.9bnUSD

Europe

15%

Export

18.4bnUSD

Import

39bnUSD

North America

10%Total trade

KEY MARKETS FOR GROWTH

ASEAN accounted for 13.7% of Australia’s total two-way

trade, amounting to USD78.8bn in FY 2016-17. Of that,

merchandise trade was USD56.9B whereas services

accounted for USD21.8B. However, ASEAN’s share has

largely remained stagnant in recent years, as Australia’s

trade with China expanded rapidly. While a static

trade share could be considered a positive outcome

considering the falling shares with Australia’s traditional

trading partners Europe, the United States and Japan,

there is potential to more fully optimise the trading

relationship. Especially considering the close proximity

of ASEAN to Australia, and the fact that the total value

of trade between Australia and ASEAN is 17% below

its FY 2011-12 peak of USD95bn4. Singapore, Thailand,

Malaysia, and Indonesia account for over 80% of the

total trade between Australia and ASEAN. Australia runs

a trade deficit with ASEAN overall. With ASEAN being

a formidable contributor to Asia’s growing middle

class (which is projected to grow at the fastest pace in

the world by 2030), there will likely be assimilation of

new skills, better technology and a growing need for

new investment. Not only does ASEAN provide a solid

consumption base for Australia’s goods and services,

it is slowly developing into a region with a skilled

workforce to invest in.



AUSTRALIA’S GOODS AND SERVICES TRADE BALANCE WITH ASEAN

INFRASTRUCTURE INVESTMENT NEEDS IN ASEAN MARKETS, 2016-2040

SECTORS WITH MOST POTENTIAL FOR AUSTRALIAN BUSINESSES

16

-2

0

2

4

6

8

10

12

14

-2 14 1610 126 82 40

DEFICIT

SURPLUS

Exports to ASEAN (USDbn)

(USD billions)

Imp

ort

s fr

om

AS

EA

N (

US

Db

n)

Brunel, Cambodia, Laos, Myanmar

Philippines

Vietnam

Indonesia

Malaysia

Thailand

Singapore

INFRASTRUCTURE

ASEAN’s increasing infrastructure gap driven by rapid urbanisation and increasing middle class population creates immense opportunities. Countries like Indonesia and Malaysia have some of the fastest urbanisation

rates in ASEAN. Apart from transport infrastructure, Australian companies can support such infrastructure priorities across services including e-government, traffic management, education and healthcare.

Indonesia

Vietnam

Philippines

Thailand

Malaysia

Myanmar

Singapore

Cambodia

Laos

Brunei

0 200 400 600 800 1000 1200 1400 1600 1800


Source: ANZ Research, DFAT

Source: ANZ Research


For more information regarding ASEAN markets and ANZ Research, visit: http://betradeready.anz.com

Source: ANZ Research – Asia Insight Report: Australia-ASEAN trade links - immense potential to grow, Feb 2018

INFORMATION & COMMUNICATION TECHNOLOGY

ASEAN governments are heavily investing in going digital. ICT plays a critical role in supporting regional connectivity and integration, one of the important pillars of the ASEAN Economic Community (AEC) established in 2015. Internet penetration has improved sharply while the size of the e-commerce market is also starting to boom. This kind of digitalisation is expected to further gain prominence over the next decade.

HEALTH TECHNOLOGY & INDUSTRY

The ageing population and increasing government initiatives such as universal healthcare coverage will boost demand for healthcare services. Singapore offers tremendous potential in developing medical solutions and as a gateway to ASEAN. With a shortage in skilled workers and infrastructure likely to be a challenge across the region, Australian companies can partner on new infrastructure projects and provide the supporting services, skills and management needs of a growing health industry.

EDUCATION

Australia’s excellent reputation for top-quality education, along with its proximity to Asia helped drive export earnings from the education sector to a record USD31bn in 2017. This is the fastest annual growth since 2009. There is significant scope for Australia to attract more international students from ASEAN, particularly from Indonesia, Malaysia and Singapore.

AUTOMOTIVE MANUFACTURING

Southeast Asia’s strong economic growth and rising consumer class implies potential for being a global automotive hub. Thailand is already a main player here with road vehicles making up 47% of its total exports to Australia in 2016. Australian parts and accessories for off-road vehicles and other aftermarket products are recognised as premium products, providing opportunities for sales, partnership, distribution and investment.

TIPS FOR EXPANDING INTO ASEAN

Take the time to understand each market - ASEAN markets have diverse needs and varying economic developments. The Mid-Manufacturing Competitors in Thailand, Vietnam, Indonesia and the Philippines, will all seek to be the most cost-effective mid-value manufacturer in Asia. The High Income Economies of Singapore and Malaysia will become the dominant finance and technology hubs.

Leverage Singapore as an entry point and regional hub - Singapore’s historic role as a regional trade centre and strategic location between East and West has contributed to its success as global trading hub. Ranked highly for competitiveness and ease of doing business, Singapore has become an attractive centre for accessing ASEAN markets, with its superior infrastructure, logistics, shipping and services. Additionally, the Singapore-Australia Comprehensive Strategic Partnership and upgraded Singapore-Australia Free Trade Agreement (SAFTA) provide a clear platform for collaboration between Australia and Singapore.

Take advantage of regional trade agreements Agreements such as the existing ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA), the proposed Regional Comprehensive Economic Partnership (RCEP) which is on track for completion by the end of 2018, and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and the ASEAN Economic Community (AEC) through its ‘AEC Blueprint 2025’ will further economic integration throughout the region.

CONCLUSION

There is room for small, medium, or large enterprises. Businesses need to do their homework and understand the challenges of being in a particular market. Leaders need to visit ASEAN markets on a regular basis, whether establishing a physical presence or making regular visits to build relationships and understanding. A key ingredient for success is to find a local partner that’s right for your business needs and complementary in size and scale.



ASEAN IS FINALLY ON THE MAP

From the 1,000 Australian businesses interviewed for this report, 67% had dealings or operations in the ASEAN region, with Singapore, Malaysia and Indonesia the top three countries selected. Revenue generated from business dealings in the ASEAN region made up 27% of total revenue for those surveyed who are active in Asia. ASEAN's combined GDP is forecast to grow by 5.4 per cent per year for the next decade, outpacing the global average5 . Australia’s AUD$93B two-way trade with ASEAN has grown by over AUD$25B

in the past decade and now exceeds trade with the United States and Japan. ASEAN accounts for 11.5 per cent of Australia’s exports and 16.1 per cent of imports6.

Australia’s regional Free Trade Agreement (FTA) with ASEAN and New Zealand, AANZFTA was established in 2010. Bilateral FTAs for Malaysia, Singapore and Thailand provide greater certainty for Australian service suppliers and investors, and extensive tariff reductions.

GROUP COUNTRY POP GDP GROWTH

GDP PPP (USD)

DFAT RANK EXPORTS IMPORTS TOTAL TRADE FLOW

BALANCE

OCEANIA Australia 25.1M 2.4 $52,190 – 301,998 288,174 590,172 13,824

New Zealand 4.9M 2.9 $40,120 6 14,036 13,396 27,433 640

CHINA China 1.38B 6.9 $18,070 1 115,996 67,397 183,393 48,599

Hong Kong 7.4M 3.8 $64,530 13 12,035 775 12,790 11, 260

Taiwan 23.6M 2.8 $52,300 11 8,969 4,377 13,347 4,592

ASEAN Indonesia 265.3M 5.0 $13,160 14 7,030 4,212 11,242 2,818

Philippines 107.4M 6.7 $8,890 25 2,331 667 3,008 1,664

Vietnam 94.5M 6.8 $10,400 15 4,628 5,094 9,723 - 466

Thailand 69.1M 3.9 $18,940 9 5,781 17,238 23,019 -11,457

Myanmar 52.8M 6.3 $6,800 70 172 38 210 134

Malaysia 32.4M 5.9 $30,860 7 5,959 11,026 16,984 -5,067

Cambodia 16.2M 6.7 $4,320 69 40 175 215 -135

Lao 6.7M 6.8 $7,930 102 24 15 39 9

Singapore 5.6M 3.6 $98,010 8 11,961 13,413 25,374 -1,452

Brunei 434K 1.3 $79,730 61 41 272 312 -231

N. ASIA Japan 126.4M 1.7 $44,430 2 47,240 24,612 71,852 22,628

Korea 51.6M 3.0 $41,390 4 23,393 31,930 55,296 -8,564

N. AMERICA Canada 37.1M 3.0 $49,780 22 1,618 2,146 3,764 -528

USA 328.4M 2.3 $62,150 3 20,972 47,491 68,463 -26,519

UK UK 66.4M 1.8 $45,570 7 11,536 15,092 26,628 -3,556

EU Ireland 4.7M 5.6 $79,920 32 98 1,819 1,917 -1,721

France 65.0M 1.8 $45,470 17 1,416 4,901 6,316 -3,485

Germany 82.8M 2.2 $52,800 10 4,046 16,694 20,739 -12,648

GLOBAL India 1.33B 6.6 $7,780 5 20,160 7,276 27,435 12,884

Russian 143.9M 1.5 $28,960 43 486 408 894 78

AUSTRALIA-INTL TRADE FLOW 2017-2018 TRADE VALUES IN AUD ($000,000)

TABLE LEGEND

Source: IMF World Economic Outlook (link) Source: DFAT Country Fact Sheets, June 2018 (link)

The comparison of trade flow statistics across ASEAN countries with other international markets reveals several key points. GDP growth is much stronger across ASEAN countries than more established trading partners. Several ASEAN markets have a negative trade balance with Australia, including Thailand, Malaysia and Singapore, indicating the potential to export more products and services to those markets with good consumer purchasing power parity.

POP Population

GDP GROWTH 2017 GDP Growth Rate

GDP PPP Purchasing Power Parity (USD)

DFAT RANK DFAT - Rank of Total Trade Relationship

EXPORTS, IMPORTS DFTA - Trade StatIstics (Country Fact Sheets)

THE BIG OPPORTUNITY


https://www.imf.org/external/pubs/ft/weo/2018/01/weodata/weoselgr.aspx

https://dfat.gov.au/trade/resources/Pages/trade-and-economic-fact-sheets-for-countries-and-regions.aspx

TRADING OPPORTUNITIES

Exports to Singapore, Indonesia, Malaysia and

Thailand make up the bulk of exports to ASEAN nations.

However there is trade flow imbalances through-out,

with Thailand showing the greatest shortfall of exports

compared to imports. With purchasing power parity

higher than Indonesia and a population almost three

times larger than Australia at over 69 million, Thailand

is a region well placed to provide future growth for

Australian businesses. The country is already Australia’s

ninth largest trading partner. Throughout ASEAN it is

clear that many countries may provide excellent trading

and business opportunities. Singapore is a standout,

with a purchasing power parity of almost USD$100,000

per person, it may provide one of Australia’s strongest

opportunities for premium good and services.

The country is Australia's eighth largest trading

partner, yet imports from Singapore to Australia

still exceed our exports to the country, by more

than USD$1.4B annually.

CAPITAL REQUIREMENTS

For the businesses surveyed who are already active

in Asia, 43% indicated that the capital required

establishing their business was higher than expected.

As regulatory and compliance pressure increases

across Asia and especially in China, this additional

business expense will likely continue. However,

if Australian businesses are able to work with the right

partners and collaborate with one another,

the accuracy of forecasting may improve.

CAPITAL REQUIREMENTS VS. EXPECTATIONS

DON'T KNOW A LITTLE LOWER A LITTLE HIGHER

MUCH LOWER ABOUT THE SAME MUCH HIGHER

HIGHER %

LOWER%

2018 43 814%29%46%6%

2017 40 811%28%49%5%

2016 29 66%23%57%4%7%

7%21%59%5%5%2015 28 72

2

2

2

3

3

THE BIG OPPORTUNITY


RETURN ON INVESTMENT

Businesses surveyed who are planning to conduct

business expansion activities in Asia have an average

expectation of 3.4 years for positive return on investment

(ROI). In practice, active businesses have reported that

their average time taken for positive ROI is 4.7 years.

4.7 years Average time for realising positive ROI from active operations or business dealings in Asia.

19%In demand/high quality product or service

16%

12%

11%

6%

5%

Knowledge (e.g. understanding local market, practices, culture)

15%

11%

13%

12%

10%

4%

14%

20%

19%

16%

9%

11%

Good relationships with partners/customers

Cheap/low cost products or costs (e.g. services, labour, equipment)

Good contacts/partners (i.e. knowing the right people)

Good management the right personnel

KEY DRIVERS OF SUCCESS 20172018 2016

Back in 2016 the time taken was 3.4 years, which

may indicate that increasing costs, regulations and

compliance are a challenge to achieving positive ROI

quickly, however around half of business surveyed

now have still been able to achieve it within three years.

Survey participants indicated that the key

determinants of a successful Asian strategy are headed

by a few aspects: market/demand/preference for

the business’ products/services 19%, local knowledge

16%, good relationships 12%, and low costs 11%.

Recognition in Asia of the high quality of the goods

and services continues to help drive success for

survey respondents. In 2016 14% indicated this

was a key driver and that number has now risen to

19% in 2018.

THE BIG OPPORTUNITY


For those businesses surveyed who are potentially looking to

enter Asian markets, the biggest barriers indicated are lack of

knowledge and limited language capabilities for developing

business relationships. Additionally finding the right advice

around legislation, regulation, governance and business networking

can make expansion progress difficult.

ANZ has a range of initiatives to address these challenges.

Further information can be found throughout the report and

in the end section titled: Build Your Strategy

NEXT STEPS

SECTION REFERENCES1 Bloomberg – Morgan Stanley Report , Feb 2017 (link)2 Trading Economics – China GDP (link)3 HKTDC Research: The Middle Class Consumer Markets in ASEAN, Nov 2017 (link)4 ANZ Research – Asia Insight Report: Australia-ASEAN trade links - immense potential to grow, Feb 20185 ANZ Research – Asia Insight Report: Australia-ASEAN trade links - immense potential to grow, Feb 20186 DFAT Country Fact Sheets – June 2018 Update (link)7 ASEAN NOW Austrade Report 2017 (link)

43% of businesses found the amount of capital required to establish operations was higher than expected.

THE BIG OPPORTUNITY


https://www.bloomberg.com/news/articles/2017-02-14/morgan-stanley-says-china-to-avoid-bank-shock-reach-high-income

https://tradingeconomics.com/china/gdp

http://www.hktdc.com/

https://dfat.gov.au/trade/resources/Pages/trade-and-economic-fact-sheets-for-countries-and-regions.aspx

https://www.austrade.gov.au/asean-now/ASEAN-NOW-Report-2017.pdf

ZONZO ESTATE WINERY

Located in The Yarra Valley, the estate sits on 230

acres, with 45 acres dedicated to their maturing

vineyard. Founder Rod Micallef runs a team of

about 55 staff throughout the winery, restaurant

and award winning wedding venue.

Rod and his team have been investigating the wine

market in China over the last year, with initial orders

of 4,500 bottles so far. He shared his insights regarding

the journey:

“I worked in China for a few months many years

ago and it sparked an interest in the market for me.

Selling into the market is something that I’d really

like to achieve, so I’ve got a lot of patience for it.”

Rod has found some initial discussions with distributors

to be one sided, only offering exclusive terms for

several years, so the company has been working with

lawyers and advisory partners to understand the right

approach to use in the market.

“It takes patience to build a long lasting relationship

with a distributor, but it is completely worth it.

We have learned a huge amount in a short space

of time to ensure that our packing, labelling and

documentation ticks all of the boxes for shipments.

Working with the right partners is essential so that

we can get it right and send it off with no issues.”

The company has been adapting existing content for

potential Chinese customers visiting the estate, along

with website updates that will feature international pages.

“We have translated all our wine tasting notes and

media releases into Chinese, but it’s a lengthy process

to get that completed and then get feedback on it to

ensure that it’s communicating our brand properly.”

ONLINE SALES

Zonzo Estate has been establishing an online presence

on WeChat, along with the ability to sell product

cross-border into China using WeChat Marketplace,

Tmall and Dianping.

VALUE OF AUSTRALIAN WINE

EXPORTS TO CHINA (AUD)1

June 2018 $1.12B 55%

June 2017 $607M 44%

June 2016 $419M 50%

June 2015 $280M 32%

Source: Wine Australia - Annual Wine Export Reports

INVESTIGATING THE MARKETCASE STUDY

WINE EXPORT GROWTH

1 Wine Australia - Wine Export Report 2 2ANZ OPPORTUNITY ASIA REPORT 2018

“By the time we launch, it will have taken about six

months in total. The amount of physical paperwork

required has been a real surprise. We now have a

Trading Partner who can assist us on that side, but

even then it’s been a lengthy process for them.”

“The Chinese tourists that visit us here give me a lot of

encouragement, because if I’m able to take my product

to them, in their own country, hopefully they’re going

to enjoy it as much as they do when they come here.”

Establishing viable export markets is a goal for

Rod, but he is mindful to ensure the business in

Australia is growing at the right speed to support

international expansion.

"The export market is something we’re passionate

about, but we are mindful to balance that ambition

as we continue to grow in Australia. I don’t think

anyone can conquer the entire Chinese market,

but the opportunity for volume is there and the

number of tourists and Chinese locals in Australia

is great to tap into.”

MARKET RESEARCH

During the ANZ Opportunity Asia Delegation in

October 2017, Rod was able to visit the Alibaba

Hema Fresh market in Shanghai along with other

food and beverage exporters from Australia.

“When we were standing in the wine section there,

I was blown away, because every other nation was

there already. The Chinese look at all these other

places like France, Italy and Spain as countries that

can produce clean, high quality food and want to

be able to showcase them.”

“This was the biggest insight for me from the

delegation - they’re not just going to want my

product because I’m another foreign brand.

I’ve got to do a very good job, I’ve got to market

myself and I’ve got to work hard at it to get into

the market. It’s not just going to happen because

there’s a Kangaroo on the label.” “The feelers are

out there and hopefully it will build over time.”

Rod was one of 22 food and beverage exporters who attended the October 2017 ANZ Opportunity Asia Delegation.

ANZ runs delegations several times a year and applications are open to any business. For more information

visit http://betradeready.anz.com and see a video interview with Rod Micallef and tour of Zonzo Estate.

CASE STUDY


THE CONSUMER APPROACH

Large scale heavy industry and manufacturing activity over the last few decades in Asia provided a base

for solid economic growth and transformed many countries. However, workers in Asia are now moving into

higher paid professions and service roles in urban areas. This provides consumer spending growth in cities

across Asia, while the manufacturing industry adapts to new demands. Whenever manufacturing activity

is moved to developing markets in Asia with a cheaper labour pool, this ‘industrial migration’ can often

generate further economic growth7.

For Australian businesses looking to expand into Asia, there are

a range of different approaches to consider. However, one theme

is consistent; the growing middle class population in Asia presents

a massive opportunity. Not only is this population producing more

goods and services which Australia is able to import and trade,

but the income that those jobs provide to workers across Asia

is delivering them significantly increased spending power7.

2

TARGET MARKETS & BUSINESS CONSIDERATIONS


IN THE MIDDLE

The number of middle class consumers in the

Asia-Pacific region in 2009 was around 525 million.

That number is forecast to grow to approximately

3.2 billion by 20309. In terms of purchasing power,

the United States had the largest middle class

market in the world in 2015 (USD $4.7 trillion) but

was overtaken by China (in purchasing power parity

terms) during 201610. Current middle class population

in China is estimated to be over 260 million11.

The middle class expansion is a global trend; however,

the highest growth of middle class populations over

time will be concentrated in Asia. Estimates indicate

that the number of people joining the middle class

annually is more than 140 million12 and the majority

(88%) of the next billion people entering in the middle

class will be Asian13. By 2030 there may be almost

half a billion upper-middle and high income

consumers in China with disposable income of

more than USD$10,000 annually14.

Consumers are upgrading from imported staples

like infant formula and milk, into more premium

categories, including skincare, wine and healthy snack

foods. As households become wealthier, spending

on discretionary categories such as beauty and

wellness, furniture, home decoration, travel and

entertainment is also increasing15. The quality control

standards for imported goods are stringent across

many countries in Asia, but once a brand has

gained access to a market, it may be able to disrupt

the dominance of established local brands.

Bill

ion

s

20152000 20300

1

2

3

4

5

6

ASIA PACIFIC

MIDDLE EAST AND NORTH AFRICA

SUB-SAHARAN AFRICA

EUROPE

NORTH AMERICA

CENTRAL AND SOUTH AMERICA

ESTIMATED POPULATION GROWTH OF THE GLOBAL MIDDLE CLASS

Source: Brookings Institute



ACTIVE PLANNER

MARKETS TO CONSIDER

Consumer confidence across Asia continues to improve,

but consumers remain cautious about excessive

spending16. They are looking for high quality and value

for money. Confidence of consumers in China is growing

steadily with job market optimism fuelling a willingness

to spend. Additionally as more millennial consumers

are represented in middle class demographics, a lower

proportion of workers are savings focused16.

For businesses surveyed that are planning to establish

their operations in Asia, China is the key market

with 47% considering the region. By comparison,

60% of businesses active in Asia are in the China

market. Several other markets are clearly attractive, yet

respondents that are planning to expand into Asia are

overlooking several markets where Australian businesses

are already active.

China Incl. HK

Singapore

Japan

Malaysia

Indonesia

Thailand

India

Philippines

South Korea

Taiwan

0% 10% 20% 30% 40% 50% 60% 70%

TOP 10 ASIA MARKETS FOR SURVEY RESPONDENTS



Import from Asian countries

43% 37% 29% 38%

Export to Asian countries

36% 39% 33% 32%

Joint ventures

25% 33% 33% 30%

Greenfield investment (establishing on the ground operations from scratch)

24% 30% 29% 27% 17% 18% 29% 26%

Mergers & acquisitions (acquiring or merging with established operations/businesses in Asia)

2015 2016 2017 2018

ESTABLISHING OPERATIONS

Importing from Asian countries is the most common

way operations and dealings with Asia have been

established, with 38% of responses indicating this

approach. This represents a reversal of the downward

trend seen from 2015 to 2017. Although the 26% of

businesses that have established Asian operations

and dealings through mergers and acquisitions is

fewer than last year, this proportion remains significantly

higher than in 2015 and 2016.

Of the businesses active in Asia, 62% agree that they

had to increase the time spent working on their business

when launching their expansion activities, however this

did not necessarily result in less attention on domestic

operations, with only 45% of businesses indicating that

they had to reduce ‘the time taken to focus on growing

our domestic operations’. For businesses looking to

establish operations in Asia, 80% are planning to do so

within the next three years.

APPROACHES WHEN FIRST ESTABLISHING ASIAN OPERATIONS/DEALINGS



1. Lack of local knowledge in specific Asian countries

2. Limited diversity of language skills in their organisation

3. Lack of knowledge about target market(s) for their products/services

4. Lack of on-the-ground partners

5. The time it would take to realise a return-on-investment

6. Lack of suitable employees on the ground

7. Risk of reduced focus on their domestic market

8. Lack of capital funding to support sustained Asian expansion

9. Convincing existing employees to relocate overseas

10. Fear for the lack of demand for our goods/services

KEY FACTORS INHIBITING EXPANSION INTO ASIA

Survey respondents indicated that lack of local knowledge and limited language skills are the key factors stopping Australian businesses expanding into Asia. With such a diverse local population in Australia, there is plenty of opportunity to collaborate with organisations, including local business chambers for countries in Asia, along with Asian networking groups and industry bodies.

THE FAST MOVING CONSUMER CLASS

As incomes rise and the pace of living increases,

middle class consumers across Asia are consuming

more fast moving consumer goods (FMCG) products

and upgrading to premium brands. Overall FMCG

spending growth in Asia was 3.8%17. In China two large

ecommerce festivals in late 2017 helped to grow overall

FMCG sales by 15%. Dairy and beverage categories

were growing fastest in China, with sales gains of 10%

and 12% respectively18. Personal care, including health

and beauty products, is the fastest growing category

across Asia, with 7% growth19.

Most FMCG products (around 73%) are still purchased

through traditional ‘offline’ retail in China20 from

more than four million outlets across the country 21.

However, ecommerce is driving growth for these

products as consumers are able to read reviews and

follow social media influence, especially for fashion,

beauty and baby care categories. Chinese consumers

are spending more on premium goods that deliver

health benefits or elevate their lifestyle22. Southwest

and central provinces in China provided the strongest

growth of up to 7% on FMCG spending23.

Over the next few years, the major share of growth in

the consumption of goods and services is predicted to

come from five key countries in Asia: China, Indonesia,

Thailand, Singapore and India. Asia will have the

significant share of the global consumer packaged

goods market by 2019 at around USD $1.25 trillion24.

It is estimated that the largest segment, packaged foods,

will be worth around USD $780B24. Brands that

are able to provide a smooth customer experience,

across multiple sales channels, may be able to grow

marketshare faster.

45%of businesses active in Asia are exporters, up from 42% in 2017.





FUNDING OPERATIONS

In line with last year’s survey, the majority of active

businesses in Asia are funding their Asian operating

costs via operating surplus (43%). This year, marginally

less are funding their operating costs using bank

funding in Australia (down to 32% from 37%) and bank

funding from overseas has dropped to 2016 levels

(down to 19%). The use of personal funds (21%) and

Government assistance (13%) has grown this year.

ANZ Bank research indicates that SMEs are able to

unlock significant productivity and additional revenue

by utilising digital tools and data in their business25.

Digitally advanced SMEs generate more revenue per

employee and save almost 14 hours per week26. This

is an essential consideration for any business when

attempting to grow off-shore, to ensure the appropriate

time and capital is available in the domestic business.

FUNDING SOURCES

Operating surplus

43% 42% 43%

Bank funding in Australia

38% 37% 32%

Personal funds

15% 15% 21%

Private equity or investors

18% 20% 20%

Bank funding overseas

18% 26% 19%

Government assistance

8% 7% 13%

2016 2017 2018

43% of businesses found the amount of capital required to establish operations was higher than expected.

Source: ANZ The Digital Economy Report – Aug 201825



TRAVEL MONEY

Inbound tourists to Australia make an important

impact on the Australian economy and often

advocate to friends and family regarding the quality

of ‘Brand Australia’ when they return home.

Visitor numbers from Asia are continuing to grow

by more than 6% each year. Meanwhile, the number

of annual visitors from the United Kingdom and

New Zealand has fallen by 2% or below, while visitors

from the United States has increased by 10%27.

Visitor numbers are steadily growing from Japan (4%),

Thailand (6%), Korea (6%) and Taiwan (8%). The largest

growth is coming from India (16%), Hong Kong (14%),

China (12%) and Indonesia (11%). China overtook

New Zealand as the largest source of visitors over the

last year with 1.25m and 1.23m respectively28. The

total spending in Australia by international tourists

was a record AUD$42.3 billion in 2018, growing at 6%

with over half of that growth coming from spending

by Chinese visitors28 who are spending an average

of more than AUD$8,300 per person during a visit -

more than the expenditure of visitors from the

next three countries combined (USA, UK and NZ)28.

China

0 400,000 800,000 1.2M

New Zealand

United States

United Kingdom

Japan

Singapore

Malaysia

India

Korea

Hong Kong

Indonesia

Taiwan

Thailand

HEADING DOWN UNDER

Visitors to Australia by country of residence Source: Tourism Research Australia, International Visitor Survey, March 2018



KEY BUSINESS CONSIDERATIONS

For those businesses surveyed, that have the potential

to establish operations or business dealings in Asia, but

no current plans to do so, the most important area of

consideration and seeking advice is regarding legislative

and regulative framework/policy/governance (13%

combined average), followed by business networking.

Cultural and language considerations, including having

multi-lingual staff were also an important consideration.

The growth of cultural and language capabilities of SMEs

in Australia will likely improve if staff with the required

skills and experience can be employed within the

business, rather than outsourced to third party vendors.

When considering expansion into Asia, there are

numerous sources of information available, but it can be

overwhelming when getting started. Many industry white-

papers from professional services and legal firms cover

the key challenges when doing business internationally.

It is worth searching for such information regularly to find

revised publications that address updated international

regulations. Several industry bodies in Australia publish

guides to getting started in specific markets. These include

Austrade, DFAT, AsiaLink, Export Council of Australia and

state government trade offices which have workshops

and resources available throughout Australia.

TOP TEN IMPORTANT CONSIDERATIONS - BY BUSINESS SIZE

Annualturnover

16%

9%

12%

7%

0%

0%

3%

7%

2%

5%

Medium $5m to $39m

Large $40m+

16%

10%

4%

9%

5%

4%

6%

4%

3%

3%

Small $250k to $4.9m

11%

8%

11%

5%

6%

6%

4%

4%

6%

3%

Legislative & regulative framework

Business networking

Cultural language considerations

Capital funding

Country selection/differences

HR and employment

Finding market/demand

Legal

Knowledge and local expertise

Taxation

Legislation, regulations, policy and governance was the most important area where businesses require advice and guidance when expanding into Asia.

1



LOOKING BEYOND MAJOR CITIES

The megacities of China and throughout Asia have

provided excellent proving grounds for Australian

exports of dairy, beef and wine. These megacities

are also sources of inbound tourists and university

students. However when launching a brand into a

new marketplace in China, 2nd and 3rd tier cities may

provide a better opportunity for exporters, where less

competition exists from other international brands.

Overall, disposable household income per capita in

China has grown at a compound annual growth rate

of 8.2% over the past six years29.

Most of the 50 million households that are expected

to enter the middle class in China over the next

3 years30 will be located outside the largest, most

established cities. There are more than 670 cities across

the country31; 240 of them have a population of more

than 500,00032 people and 100 cities have more than

1 million people33. Many of these ‘smaller’ cities are

becoming increasingly open to imported products34.

China is also now the world’s largest market for food

and beverages, with an average growth rate of 15% per

cent of imported products in the past five years35.

ASEAN is home to more than 650 million people and

a large proportion have already migrated to cities and

entered the middle class36. Many living in this region

will benefit from industries connected to the increasing

trade flow between China and India, and throughout

the Asia Pacific region which will likely cause incomes

to rise. Less well known cities throughout Asia with

strong growth profiles may provide the ideal launch

pad for Australian businesses to reach new customers.

GLOBAL CONCENTRATION OF BUILT-UP URBAN AREAS

(WITH A POPULATION OF MORE THAN 500,000 WHICH ARE NOT CLASSED AS METROPOLITAN CITY CENTRES)

57.7%Asia

9.8%Europe

12.4%North America

0.7%Oceania

8%South America

11.4%Africa

Source: Demographia Research - World Urban Areas, March 2018

Throughout developed countries around the world, there is a striking difference between the populations of

cities and the areas classed outside of metropolitan centers. In Asia the proportion of people living in these urban

areas of more than 500,000 is very high, hundreds of these smaller cities may eventually hold more than 1,000,000

people. In contrast, the population of Australia and New Zealand is more dispersed and there are almost no

smaller cities or urban areas of this size, only a handful of metropolitan centers of 1-5 million people.



SECTION REFERENCES7 Brookings Institute - The Unprecedented Expansion Of The Global Middle Class (link)8 Brookings Institute - The Unprecedented Expansion Of The Global Middle Class (link)9 Australian Trade and Investment Commission (AusTrade) (link) 10 Brookings Institute (link)11 Mirae Asset – Impact of the Chinese Consumer Oct 2017 (link)12 Brookings Institute - The Unprecedented Expansion Of The Global Middle Class – Feb 2017 (link)13 Brookings Institute - The Unprecedented Expansion Of The Global Middle Class – Feb 2017 (link)14 Economist Intelligence Unit – The Chinese consumer in 2030 - Nov 2016 (link)15 Boston Consulting Group – Five Profiles That Explain China’s Consumer Economy, June 2017 (link)16 Nielsen Consumer Confidence Index – Apr 2018 (link)17 Kantar WorldPanel consumer Insights, July 2018 (link)18 Nielsen Consumer Confidence Index, April 2018 (link)19 Kantar WorldPanel consumer Insights, July 2018 (link)20 Nielsen Consumer Confidence Index, April 2018 (link)21 EY Greater China Consumer Products and Retail Sector Journal, Dec 201722 Bain & Company – China Shopper Report 2018 (link)23 Bain & Company – China Shopper Report 2018 (link)24 Accenture - The Future of Commerce has arrived, Nov 2016 (link)25 ANZ The Digital Economy Report – Transforming Australian Businesses, Aug 2018 (link)26 ANZ The Digital Economy Report – Transforming Australian Businesses, Aug 2018 (link)27 Tourism Research Australia – International Visitor Survey, December 2017 (link)28 Tourism Research Australia – International Visitor Survey, December 2017 (link)29 Bain & Company – China Shopper Report, July 2018 (link)30 Reuters, BCG, AliResearch (link)31 China City Development Institute (link)32 EY Greater China Consumer Products and Retail Sector Journal, Dec 201733 Demographia Research - World Urban Areas, March 2018 (link)34 The Australian - More to China than major cities, July 2018 (link)35 The Australian - More to China than major cities, July 2018 (link)36 ANZ BlueNotes – The Asian Super Cycle is here, Oct 2016 (link)

ANZ BE TRADE READY

ANZ Be Trade Ready is a digital tool, designed in

collaboration with the Export Council of Australia

to assist Australian businesses assess and plan

their international expansion.

This free tool combines ANZ insights and experience

in helping businesses expand across borders and will

provide you with a bespoke report. This report helps

to identify where your business is in the lifecycle of

global expansion, and outlines the tactical steps to

better position your business for international success.

Select from countries which Australia has Free Trade

Agreements with, along with a specific industry, to

identify key insights for a target market. These include

China, Japan, Korea, USA, New Zealand, Chile, and

all ASEAN countries. Visit http://betradeready.anz.com


https://www.brookings.edu/wp-content/uploads/2017/02/global_20170228_global-middle-class.pdf


http://www.austrade.gov.au

http://www.brookings.edu

http://investments.miraeasset.us/perspectives/new-china-impact-chinese-consumer/



https://www.eiu.com/public/topical_report.aspx?campaignid=Chineseconsumer2030

https://www.bcg.com/publications/2017/globalization-accelerating-growth-consumer-products-five-profiles-that-explain-chinas-consumer-economy.aspx

http://www.nielsen.com/au/en/insights/news/2018/with-consumer-confidence-up-last-year-2018-shows-promise-for-global-product-companies.html

https://www.kantarworldpanel.com/global/News/Consumer-Insights-Asia-a-visual-ride-into-FMCG-growth#


https://www.kantarworldpanel.com/global/News/Consumer-Insights-Asia-a-visual-ride-into-FMCG-growth#


https://www.bain.com/insights/china-shopper-report-2018-vol1/


https://www.accenture.com/au-en/retail-research-2016-consumer-research-apac

https://media.anz.com/digitalmindsets

https://media.anz.com/digitalmindsets

https://www.tra.gov.au/tra/ivs/ivs_dec_2017.html

https://www.tra.gov.au/tra/ivs/ivs_dec_2017.html


https://www.reuters.com/article/us-china-millennials-smallcities/small-town-kids-shape-future-of-chinas-consumption-idUSKBN1HW0IG

http://www.ccgov.net.cn/cityforum/index.htm

http://www.demographia.com/db-worldua.pdf

https://www.theaustralian.com.au/business/markets/more-to-china-than-major-cities/news-story/

https://www.theaustralian.com.au/business/markets/more-to-china-than-major-cities/news-story/

https://bluenotes.anz.com/posts/2016/10/longread-the-asian-super-cycle-is-here


Founded in 2005, the company has been exporting for over 12 years and is now present in 15 countries. Over the last two years the company has progressed from traditional retail channels to establish a greater presence on ecommerce platforms in Asia. International Sales Director Jamie Thurin shared his thoughts regarding the journey.

“Our first experience with the China market was through a 3rd party trader who was selling our products online. There was really good traction and we realised there was an excellent opportunity to get involved in a much bigger way.”

In Asia, Jamie found that traditional concepts around weight-loss and meal replacement products were still common. Many convenience stores were stocked with confectionary and sugary drinks to fill the gap in-between meals.

“Healthy snacking is not something that Chinese consumers are familiar with, so it’s a big challenge for us to educate the customer and create that awareness. It’s not just a direct translation of our western advertising, the product values and benefits

need to be explained in a culturally relevant way to Chinese consumers. In Australia, consumers recognise functional benefits such as high-protein, low-fat or low sugar. In China, consumers are more concerned with how it will make them feel, it’s the emotive side of it – feel good, look good – it really is a different kind of messaging.”

MARKETINGFinding the right marketing partners to conduct research and run campaigns in a Chinese language market has been a challenge for the company.

“Marketing is very expensive in China. So understanding which partner is right for your brand, your needs, your budget and desires in the market is important. There’s so much you can’t do on your own, from setting up your WeChat in Chinese and getting onto various ecommerce platforms. Through our consultants in Shanghai, we essentially have Chinese staff on the ground in China.”

After some testing, the company found that having too many SKUs (stock keeping units) on their ecommerce listings was detrimental to sales.

Slim Secrets is an Australian health snack brand specialising in

convenient, nutritionally balanced snacks for health, weight and fitness

conscious consumers.

APPETITE FOR GROWTH CASE STUDY

PROTEIN BARS & HEALTHY SNACKS


" Finding our hero products was a big improvement. Having 24 products on our listing was too many. Having four or five which are more relevant to them was better for customers who are not familiar with the brand.”

Once products are available on ecommerce, regular promotions are required to drive customers to the pages and convert sales.

“Facebook and Instagram are essential for us in the Australia market, but in China we are on social networks like Weibo, WeChat and leverage optimisation on the Chinese search engine Baidu to ensure customers can find our product.”

The company has carried out influencer marketing through brand ambassadors including tennis champion Angelique Kerber, singer Avril Lavigne, TV personality Sophie Monk and world champion athlete Sally Pearson, which has contributed to sales growth in Asia.

“One of the best things we have learned recently is the value of approaching Chinese consumers in Australia first, through Chinese social media and other networks. They can help push your brand in a much more cost effective way, and help communicate it to friends and family China who are asking about products from Australia.”

The company is stocking products on several ecommerce platforms, including Tmall and Taobao in China, along with the Lazada platform to access South East Asia.

TIPS FOR SUCCESS“First, make sure you have a really successful brand back home, and then make sure you have strong brand presence to local Chinese consumers in Australia. Once that is established you can look at extending into the China market overseas, but you can’t skip those first two steps if you want to sustain your momentum.”

“I think it’s a very exciting time for SMEs wanting to do business overseas. There’s a huge demand for Australian products in China and all around the world, and I think if you’re ever thinking of giving it a go, now is the time to do that.”

While Jamie is passionate about the opportunity, he cautions Australian companies to do their homework first.

“Timing for an SME is important. It can be costly just going on a ‘fishing expedition’ to the market and not actually catch anything if you don’t fully understand your capability and readiness. Talk to partners, talk to consultants do plenty of research before you start spending money that could be better spent at home to promote your brand.”

Jamie Thurin joined the ANZ Opportunity Asia Delegation to Shanghai and Singapore in October 2018,

for Australian FMCG exporters. For more information visit http://betradeready.anz.com

Slim Secrets range on Lazada - a Singapore based ecommerce platform for markets in South East Asia.


CASE STUDY

3

84% of exporters surveyed are distributing physical goods.

DELIVERING THE GOODSOPERATIONS, LOGISTICS & ECOMMERCE

Improvements and optimisation in logistics and freight forwarding is making international markets more

accessible. The number of containers, airfreight and courier packages sent around the world is increasing

every year39. Growth in consumer consumption is driving this trend, with much of the demand from countries

in Asia, along with Australia and New Zealand40. In ASEAN countries, 3.8 million new internet users come

online every month, which is driving rapid ecommerce growth of around 31% annually41.

The global ecommerce market for physical goods was worth USD$1.57

trillion in 2017. It is forecast to grow by 19% in 2018 and reach over USD$2

trillion by 201937. This represents an incredible opportunity for Australian

exporters, but also represents a challenge for traditional retailers adapting

to the changing shopping habits of consumers. Retailers are revising

and cutting prices more frequently, to compete with the instant access

consumers have to competitive pricing for the same goods online38.


CURRENT OPERATIONS (IMPORT/EXPORT)

Trading relationships throughout Asia are continuing

to mature. More exporters from Australia are taking

advantage of free trade agreements (FTAs) to launch their

products into new markets. Conversely, producers across

Asia now have better access to the Australian market,

which was previously dominated by exporters from the

UK, Europe and USA.

In Australia, the major share of exports are handled by

large companies, with SMEs accounting for approximately

14% of export revenue of goods and 27% of service sector

exports, in 201641. Australian SMEs exported

AUD$16.2B worth of goods and services to China and

imported around $18.5B worth of goods and services from

China in 2017 42. This trade balance shortfall could provide

opportunity for SMEs to grow export volumes.

In this survey, more than three out of five businesses

that are active in Asia are importing (62%). This includes

components, materials and wholesale products.

This proportion has increased 3 percentage points in the

last year and is higher than in 2015 and 2016. The number

of organisations currently operating in Asia which reported

exporting to Asia has been consistent throughout the

survey, but has risen 3 percentage points since last year.

45%of businesses active in Asia are exporters, up from 42% in 2017.

CURRENT ASIAN OPERATIONS/BUSINESS DEALINGS

42% 42%42%45%

53%48%

59%62%

IMPORTING FROM ASIA EXPORTING TO ASIA

2015 201820172016


DELIVERING THE GOODS

BUILDING EFFICIENCY

From the exporters surveyed, 84% are distributing

physical goods, with over half (53%) indicating that

they are utilising a hub to help service customers in

the region. The most popular distribution hubs are in

China, Singapore, Hong Kong or Indonesia. There may

be additional efficiency which can be gained in doing

so, including managing inventory levels for seasonal

demand and bulk freight savings. Collaboration with

other experienced exporters and trade organisations

may enable businesses in Australia to leverage the

experience and relationships of others and avoid

common mistakes.

The World Bank maintains a ranking of countries in

a Logistics Performance Index43, with Germany

rated 1st, Japan 5th, Australia 19th, New Zealand 22nd

and China at 27th. Numerous factors impact

the ranking, including the income level of workers

and the infrastructure required to facilitate the smooth

movement of cargo. Businesses face a challenge

when accessing markets throughout South East

Asia, as the logistics capabilities of these countries

is still developing. For example, Malaysia is ranked

35th on the list, while Indonesia is further down at

51st and the Philippines at 64th. Collaboration and

knowledge sharing in these markets is essential

for Australian businesses.

The expertise of efficient Australian logistics companies

will be in demand across Asia, as investment is made

to meet growing consumer demand44. The appetite

for joint ventures and the development of logistics

projects has been

increasing in Indonesia, Thailand and Vietnam45.

China

Singapore

Hong Kong

Indonesia

Malaysia

Japan

India

Thailand

Taiwan

SURVEY RESULTS - LOCATIONS OF ASIA HUBS

33%

18%

16%

14%

12%

11%

10%

10%

6%



53%Over half of businesses exporting to Asia utilise a hub to service their customers.

FAST SHIPMENTS

While businesses surveyed had a variety of approaches

for managing the distribution of stock, 73% of exporters

were able to meet a delivery time of two weeks or less,

indicating fast shipping via air or sea freight . Twenty-two

percent of exporters take more than two weeks to deliver

products, perhaps due to sending products further or

in larger volumes. The demand for international sea

freight is growing steadily, and forecasts indicate

4.8% annual growth throughout Asia markets to 202046.

STOCK MANAGEMENT

26% 31% 25% 11% 1%

Our stock is sent to a distributor, we do not sell directly to Asian end-users

We send shipments to a distribution centre or warehouse that is managed on our behalf, and ship from there

We send shipments to a distribution centre or warehouse that we manage, and ship from there

We ship products directly from Australia to our Asian customers as it is ordered

Other

45%of exporters utilise 3rd party Logistics to manage distribution.



CURRENT ASIAN OPERATIONS/BUSINESS DEALINGS - BY BUSINESS SIZE

ECOMMERCE:

THE RISE OF ASIAN CONSUMERS

More consumers than ever are buying products

online. Traditional distribution into Asia through

“bricks and mortar” retail channels including

supermarkets and convenience stores have been slow

to keep up with the rampant demand from Asian

consumers discovering foreign brands online and

sharing their experiences with friends.

Half of exporters sold their products online,

with China, Japan and Indonesia the most

prevalent destinations for ecommerce sales. Busineses

reported strong sales growth in

China and Japan. Additional markets for

ecommerce deliveries from survey participants

included South Korea, Vietnam, Cambodia

and Malaysia.

EXPORTING TO ASIA & RUNNING

ECOMMERCE OPERATIONS

4% DON'T KNOW

51% YES

45% NO

2 in 5 large businesses using ecommerce for Asian customers are exporting to China (*40M+ turnover).

Total

39%

62%

45%

Active Asian operation business

dealings 2018

53%

53%

46%

Medium $5m to $39m

Large $40m+

32%

68%

49%

Small $250k to

$4.9m

27%

65%

36%

Business operations in Asia

Importing from Asia

Exporting from Asia



19.2% growth in online shopping in Australia during 2017.

ON THE MOVE

Throughout Asia, people largely travel via

scooters, bicycles and public transport, which

reduces the amount of groceries or consumer products

they can carry when shopping.

Additionally a large, young population throughout Asia

provides the workforce required for affordable delivery

options for ecommerce. It is estimated

that more than 1.2 million express delivery

workers zip around China on electric scooters

and motorised tricycles48.

For a developed economy like Australia where wages

are higher, it is a challenge to expand the workforce

required for affordable on-demand deliveries over long

distances and ensure that the process is economically

viable over time. As new ecommerce platforms enter

the market, they often provide free shipping to build

engagement with customers. While these factors

present challenges, there is no doubt that the appetite

exists, with Australia Post reporting that online shopping

in Australia grew 19.2% during 2017 49.

ECONOMIES OF SCALE

As a business grows in size it becomes easier to

produce and distribute products cost effectively,

through preferential agreements and discounts

on larger orders. A small company can carry a lot

of exposure to risk, without the revenue in place

to absorb unexpected problems; therefore growing

into a new market can be a daunting task.

The proportion of businesses active in Asia conducting

activities beyond importing or exporting in Asia is

at its lowest level since the start of the study in

2015 (39%) however, the highest level of engagement

is from large businesses which is now 53%.

The small and medium businesses surveyed are

conducting more import, wholesale and retail activity

than the large businesses, who may be more focused

on manufacturing for domestic distribution and

export. The time and capital required to build

engagement with offshore partners is a challenge

for smaller businesses who want to grow exports.

Source: Australia Post (Includes domestic and international parcels)



BILLIONS OF BOXES

Ecommerce demand is driving improvements

and efficiency across logistics operations around

the world. The international parcel delivery market

is estimated to be 74.4 billion parcels per year, and

is expected to grow by 1 billion parcels* a year

by 2021. (*Parcel size less than 31.5kg/70 pounds)

Parcel delivery volume in China accounts for 53%

of global shipments, (40.1 billion parcels or 1270

parcels per second) this is triple that of the United

States which had 11.9 billion parcel deliveries last year.

In Australia 841 million parcels were delivered

during 2017, 8% up from 778 million in 2016.

INTERNATIONAL PARCEL SHIPPING VOLUME 2017

24% of small business exporters are selling online.

Parcels GrowthLocation

28%

8%

2.4%

8%

11.2%

17%

40.1 billion

11.9 billion

9.6 billion

1.5 billion

0.84 billion

74.4 Billion

China

USA

Japan

India

Australia

Global

Source: 2018 Pitney Bowes Parcel Shipping Index47



RETAIL INNOVATION

Digital disruption is putting pressure on traditional

retailers who have been slow to adapt, however those

same digital technologies, are also providing new

opportunities. A smart supply chain enables a retail

network to manage inventory and to facilitate custom

orders or delivery from a variety of outlets. The ability

to locate products quickly, with specific criteria has

long been used internally by logistics companies and is

now being used by billions of consumers around

the world when they search and shop online.

Successful online ecommerce sales promotions

can help drive customers to "offline" retail locations.

Dynamic in-store promotions and digital payment

methods allow retailers to build a comprehensive

database of customers, which is not possible during

traditional over-the-counter transactions. This trend

is known as “New Retail” or O2O (Online to Offline)50.

It is estimated that this retail transformation is growing

at a rate of around 30% annually in China to leverage

consumers’ swift adoption of mobile ecommerce and

digital payments51.

ONLINE SALES ACTIVITY

From this survey, Alibaba, JD.com and WeChat

Marketplace were the most common Asia-based

ecommerce platforms used. However, eBay, Amazon

and a company’s own website are still the most

popular channels for online sales to countries in Asia.

Notably, Vietnam and South Korea did not make

the top 10 in this survey, with both countries sitting

at 1%, yet industry reports indicate strong consumer

demand for Australian products.

South Korea is one of the worlds most engaged

ecommerce markets with 20% of all retail sales

completed online and more than half of shoppers

using mobile52. It is estimated that half of the country

twill be using ecommerce by 2021, with more than

32 million online shoppers spending more than

USD$30 billion annually53.

Indonesia presents a large opportunity; it is the world’s

fourth largest population with more than 266 million

people and a median age of less than 3054. This young

nation of smart-phone owning shoppers is embracing

ecommerce quickly. It is estimated that the ecommerce

market there will grow from around USD$9 billion last

year, to more than USD$55 billion by 202255. Online sales

in regional areas are growing even faster than in Jakarta.

27% of exporters are using their own website to sell products online.



SURVEY RESULTS - TOP 10 ASIA ECOMMERCE DESTINATIONS

China

Japan

Indonesia

Hong Kong

Malaysia

Brunei

Cambodia

Singapore

Philippines

Taiwan

27%

14%

8%

6%

6%

5%

4%

2%

2%

2%

ECOMMERCE PLATFORMS

The platforms which had the fastest increase in

use by survey respondents over the last year were

WeChat Marketplace, JD.com and VIP.com. All of these

platforms are based in China, but are accessible around

the world. The WeChat social network had over 900

million daily active users at the end of 2017, an increase

of 17% over the previous year56. The platforms all sell

products directly to consumers, and deliver products

in a variety of ways including express delivery for

kerbside payment and pickup, click to collect and

shipping products to residential or office addresses.

Businesses surveyed indicated that 19% are selling

their products through the wholesale B2B section of

Alibaba.com including the Alibaba Australia Pavilion57.

Ten percent indicated that they are using the Tmall

Global marketplace to sell directly to consumers.

Notably, the use of eBay for sales dropped 9

percentage points. For businesses selling online

via their own website, this year's survey indicated only

a 1 percentage point increase to 27% but it remains

an important platform for sales. Implementing

multi-language webpages and international shipping

options could provide further growth opportunities.



There are dozens of ecommerce platforms competing

for marketshare in Asia. With each year of this survey,

new platforms are adopted by exporters and some

platforms previously used are no longer relevant.

Platform developers battle for marketshare of

the hundreds of millions of users in the region.

While this dynamic environment is a daunting prospect

for new entrants, working with marketing specialists

and networking with other exporters will help to

narrow down the best options to try.

Platform 2017 2018

My company’s website

Amazon

eBay

Alibaba

WeChat Marketplace

JD.com

Groupon

AliExpress

Tmall Global

vip.com

Lazada

Qoo10

Taobao

Meituan

Rakuten

26%

37%

49%

–

3%

8%

13%

–

6%

3%

11%

5%

6%

–

8%

27%

40%

40%

19%

13%

13%

11%

11%

10%

9%

7%

7%

7%

7%

6%

SURVEY RESULTS

Platforms used to sell products online in Asia

1/2Around half of exporters surveyed are engaging in ecommerce to sell their products, however only 24% of small business exporters are doing so.



CHINA LEADING THE

FUTURE OF ECOMMERCE

Alibaba.com started in China in 1999 with a mission

to connect “Made in China” with the rest of the world.

It has enabled thousands of manufacturers in China

to sell direct from the factory to international customers

for almost 30 years. It is now the world’s largest business-

to-business trading platform and connects importers

and exporters from more than 240 counties and

regions58. Suppliers from Australia are now able to host

their products in the Australia Pavilion on Alibaba.com59.

Alibaba Group also operates the popular Tmall Global

and AliExpress marketplaces which connect vendors to

international consumers. Tencent operates the popular

WeChat Marketplace while competitors JD.com and VIP.

com function as hypermarkets, that stock and distribute

inventory rather than hosting the virtual shopfronts of

vendors. Overall, China now accounts for 40% of global

ecommerce activity60. JD.com has followed

Alibaba’s lead in 2017 and opened an Australian

office this year with plans to open warehouse

facilities across the country and sign agreements

with Australia’s largest brands61.

All platforms compete for marketshare and aim to

provide users with an integrated online shopping

experience to keep them engaged regularly.

Features include rewards programs, buying

suggestions powered by artificial intelligence and

integrated payment platforms like AliPay and

WeChat Pay. An online shopper is able to visit

at any time and on a far more regular basis than

visiting a physical store. This trend has put increasing

pressure on traditional retail stores to deliver a

more dynamic experience to bring in customers

and leverage digital marketing to reach them.

PRIMED AND READY

Amazon Australia is now operating warehouses and

fulfillment centres across the country. Local shoppers

were able to take part in the worldwide Prime Day

Sale which provides free two-day shipping to Prime

members. The highest selling items (apart from

Amazon’s own heavily discounted consumer electronics

devices), were nappies and dishwasher tablets. This is

similar to American sales results which indicate time-

poor parents are some of the most engaged and regular

consumers online, making bulk-purchase savings that

cut down on the overall household budget and save

time running to the supermarket for commodity items62.

Seventeen countries now take part in the massive

sale which was first held in 2015. In the USA, sales were

estimated at USD$3.4 billion this year, up more than 40%

on 201763. Small and medium businesses, which make up

the majority of sellers on Amazon’s global marketplaces,

had already exceeded more than USD$1 billion in sales

just 10 hours into the sale64. Amazon now accounts for

almost 50% of ecommerce activity in the USA65.



FOOD FOR THOUGHT

In China, the Alibaba Hema Fresh Markets are dedicated

supermarkets which function as ecommerce fulfillment

centres for fresh food and consumer goods. Free

deliveries are made within 3kms of the store in 30

minutes or less and there is no minimum order size66.

Using a dedicated app, customers can also scan QR

codes in-store to track food all the way back to where

it was grown or manufactured.. The information also

includes product details, food safety certificates and

the business licence of distributors. This is an important

innovation to help deliver the trust and security to

Chinese consumers. Total spending on fresh food

via ecommerce in China was estimated at more than

USD$25 billion during 201767.

In the US, Amazon is leveraging its acquisition of

the Whole Foods supermarket chain by launching

one hour kerbside pickup from inside the Amazon

Prime ecommerce app. Shoppers are able to wait in a

dedicated parking spot and have the groceries brought

to their car when they arrive. Kerbside pickup and click

and collect options will continue to grow in markets

where driving is more common68. Home delivery of

fresh food via Amazon is now available in 28 cities69,

and groceries were the fastest growing category for

sales on Amazon, with sales growth in food & beverage

at 40.1% in 201870.

AMAZON RETAIL ECOMMERECE SALES GROWTH BY PRODUCT CATEGORY - US 2018

Apparel & accessories

Auto & parts

Books music & video

Computer & consumer electronics

Food & beverage

Furniture & home furnishings

Health, personal care & beauty

Office equipment & supplies

Toys & hobby

38.2%

29.4%

18.9%

23.0%

40.1%

37.2%

37.9%

29.4%

30.7%

Other categories 30.4%

Source: eMarketer, June 2018



MISSED OPPORTUNITY?

With the rapid growth of ecommerce platforms and

the wave of digital consumers buying online and

discovering brands, some companies are missing out

by not factoring in the role that ecommerce can play

in their business. From this year’s survey, 78% of

businesses selling online in Asia have an ecommerce

strategy for the region, however this indicates that

1 in 5 are doing so with no strategy in place.

For many companies existing relationships with

distributors and agents may satisfy the level of sales

volume required. However the industry research

cited throughout this report indicates that for a

business to scale, its products and services need to be

discoverable online, in multiple languages and include

visibility on platforms which include user feedback

and reviews. This is a missed opportunity for the 64%

of businesses surveyed who are actively exporting

to Asia and have future plans for ecommerce sales, but

no strategy in place to do so.

When exporters approach a new agent or distributor,

the first thing the buyer will do is to search for the

product or service online (in their native language).

In the case of China, this search will not be via

Google, it will be via Baidu or one of several other

Chinese search engines and online marketplaces.

A strategy to build a viable internet presence in

Asian languages is essential in building engagement

with new distribution partners across Asia50.

BUSINESSES EXPORTING TO

ASIA WITH INTENTION TO START

E-COMMERCE OPERATIONS IN ASIA

1 in 5 businesses selling online in Asia have no ecommerce strategy for the region.

12% DON'T KNOW

24% YES

64% NO

DO YOU HAVE A STRATEGY IN PLACE?



SECTION REFERENCES37 AusPost StarTrack eCommerce Market Update Feb 2018 (link)38 Harvard Business School & MIT Sloan – Billion Prices Project, 2016 (link)39 DHL Global Trade Barometer June 2018 (link)40 OECD Consumer Confidence Index 2018 (link)41 PwC - The Future of ASEAN, Consumer Goods Report, May 2018 (link)41 IPA-Deakin SME Research Centre, Internationalisation Whitepaper, Sept 2018 (link)42 IPA-Deakin SME Research Centre, Internationalisation Whitepaper, Sept 2018 (link)43 World Bank - Connecting to Compete, Logistics Performance Index 2018 (link)44 World Bank – Trade Logistics 2018 (link)45 CBRE - Asia Pacific Logistics ViewPoint 2018 (link)46 DHL Ocean Freight Market Update Jul 2018 (link)47 2018 Pitney Bowes Parcel Shipping Index (link)48 China’s E-Commerce Boom Can Be a Tough Road, Jan 2017 (link)49 Inside Australian Online Shopping (link)50 Bain & Company – Embracing China’s New retail (link)51 Bain & Company – China Shopper Report 2018 (link)52 BusinessWire (link)53 eShopworld South Korea eCommerce 2017 (link)54 UN World Population Ageing Report (link)55 McKinsey & Company – Indonesia, the digital archipelago, Aug 2018 (link)56 United Media Solution, Tencent WeChat Report, Nov 2017 (link)57 Alibaba.com Australia Pavilion (link)58 Alibaba Group History (link)59 Alibaba.com - Australia Pavilion (link)60 Retail Touchpoints, July 2018 (link)61 Internet Retailing Australia (link)62 Nielsen – The Quest for Convenience (link)63 Bloomberg July 2018 (link)64 Internet Retailing Australia (link)65 eMarketer Retail Report, July 2018 (link)66 Alizila - Alibaba Group News, Aug 2018 (link)67 China Internet Watch (link)68 eMarketer Retail, Aug 2018 (link)69 Nasdaq, Amazon Expands Grocery Delivery From Whole Foods Market To More Cities, Aug 2018 (link)70 eMarketer Retail July 2018 https://retail.emarketer.com (link)



https://acquire.startrack.com.au/ecommerce/2018/recap/assets/img/auspost_ecommerce_update_feb_2018.pdf

http://www.thebillionpricesproject.com/

https://www.logistics.dhl/global-en/home/insights-and-innovation/insights/global-trade-barometer.html

https://data.oecd.org/leadind/consumer-confidence-index-cci.htm

https://www.pwc.com/gx/en/growth-markets-centre/publications/assets/pwc-gmc-the-future-of-asean-time-to-act.pdf

http://www.deakin.edu.au/business/research/the-ipa-deakin-sme-research-centre

http://www.deakin.edu.au/business/research/the-ipa-deakin-sme-research-centre

https://openknowledge.worldbank.org/bitstream/handle/10986/29971/LPI2018.pdf

http://www.worldbank.org/en/news/feature/2018/07/24/from-parts-to-products-why-trade-logistics-matter

https://www.cbre.com.au/global/research-and-reports

https://www.logistics.dhl/content/dam/dhl/global/dhl-global-forwarding/documents/pdf/dhl-dgf-ocean-freight-market-update-jul2018.pdf

https://www.pitneybowes.com/us/shipping-index.html

https://www.nytimes.com/2017/01/31/business/china-courier-delivery-labor.html

https://auspost.com.au/content/dam/auspost_corp/media/documents/2018-ecommerce-industry-paper-inside-australian-online-shopping.pdf

https://www.bain.com/insights/embracing-chinas-new-retail/

2018 https://www.bain.com/insights/china-shopper-report-2018-vol1/

https://www.businesswire.com/news/home/20180524006247/en/South-Korea-B2C-E-Commerce-Market-Report-2018

https://www.eshopworld.com/south-korea-ecommerce-insights-2017/

http://www.un.org/esa/population/publications/worldageing19502050/pdf/112indon.pdf

https://www.mckinsey.com/featured-insights/asia-pacific/the-digital-archipelago-how-online-commerce-is-driving-indonesias-economic-development

http://www.umssocial.com/2017-wechat-data-report/

http://australia.alibaba.com/index.html

https://www.alibabagroup.com/en/about/history

http://australia.alibaba.com/index.html

https://www.retailtouchpoints.com/features/news-briefs/china-accounts-for-40-of-global-e-commerce-but-it-s-a-tough-market-for-non-chinese-retailers

https://internetretailing.com.au/jd-com-launch-australia-month/

http://www.nielsen.com/bd/en/insights/reports/2018/the-quest-for-convenience.html

https://www.bloomberg.com/news/articles/2018-07-17/amazon-s-prime-day-sales-soar-despite-widespread-glitches

https://internetretailing.com.au/prime-day-drives-record-traffic-to-amazons-australian-site/

https://retail.emarketer.com/article/amazon-now-has-nearly-50-of-us-ecommerce-market

https://www.alizila.com/hema-food-tracking/

http://www.chinainternetwatch.com/22637/fresh-food-2017/

https://retail.emarketer.com/article/amazon-moves-leverage-its-brick-and-mortar-footprint/5b6c6e72ebd40005bc4dc75a?ecid=NL1014

https://www.nasdaq.com/article/amazon-expands-grocery-delivery-from-whole-foods-market-to-more-cities-20180829-00011

https://retail.emarketer.com/article/groceries-amazons-fastest-growing-category/5b524862ebd4000b241409a9

INTERNATIONAL SCALE

The company provides services such as international freight forwarding, contract logistics, as well as trucking distribution and specialised project logistics. It has 1,250 staff to support international operations. Yang Kee’s Group CEO, Ken Koh, commented on the expansion progress:

“We have grown a lot over recent years. Singapore now only accounts for 20% of our business, 80% of our business actually comes from overseas. Logistics is a network business, the bigger that network, the more branches you have, the more diverse geographical locations they are in, the stronger your services will be.”

The company has over 4 million square feet of logistics facility globally and has just completed the construction of its new integrated logistics hub near the future Tuas Mega Port in Singapore. Yang Kee is also looking to construct an automated container depot in the future which will be able to store a

total of 16 shipping containers highly stacked across a special framed architectural structure.

GROWING DEMAND

AXIMA logistics, the Australian subsidiary of Yang Kee, was founded 25 years ago. To better serve Australian brands and retailers, the company expanded into Hong Kong, China and the United States over the last 10 years. According to AXIMA CEO Sandra Fairchild, who is also CEO of Fliway in New Zealand, there is significant potential for continued growth throughout Asia:

“Apart from the major commodities that Australia and New Zealand produce, most other products you find on shelves have been imported. Therefore our business is skewed towards imported freight. However exports for our Australian clients have been steadily growing as they take advantage of opportunities to take their products and their brand presence offshore, to New Zealand, China, South East Asia and also to the US market.”

Yang Kee Logistics is headquartered in Singapore and has been expanding

internationally over several years. Established in 1990, the company

provides a full range of logistics services and recently acquired logistics

companies AXIMA in Australia and Fliway in New Zealand to extend its

coverage to 11 countries overall.

LOGISTICS EXPANSION

CASE STUDYYANG KEE LOGISTICS / AXIMA LOGISTICS


ECOMMERCE

In the domestic market, there is a need for logistics services to adapt to ecommerce demand. This industry shift has already seen AXIMA transform its processes to serve the changing marketplace.

“One of the significant trends, particularly over the last two or three years is the high growth in online purchasing by customers. I believe that ecommerce in Australia is still only about 8 percent of consumer spending, compared to 17 percent in other countries.”

“Consumer preference toward ecommerce is increasing because it speaks to their needs, as opposed to retailers delivering products and services on their terms in a shop environment. When receiving an online delivery, the customer experience with the product should be as good as or better than what they would receive in a shop environment. It's a complex piece of work to ensure

For more information on this case study visit http://betradeready.anz.com

consistency, quality and speed and it provides a great opportunity for logistics service providers that can do it well.”

Many aspects of the logistics industry and growth of ecommerce can be supported by Australian business. Staff training, vehicle servicing, packaging, recycling, systems, technology and machinery used in distribution centres, along with the overall freight industry will be able to grow in line with demand.

As other countries in Asia grow their economies through increased manufacturing and export activities, it is driving the growth of logistics capacity and efficiency. Along with growing consumer demand, this improved capability provides significant opportunity for Australian exporters to gain access to new markets throughout Asia.

Yang Kee Integrated Logistics Hub, Tuas South Link Singapore


CASE STUDY

GROWTH BEYOND TRADE

ANZ Bank estimates that the demand for labour in services areas will continue to rise at an average pace

of 1.6% per year over the next 15 years72. Digital platforms and international connectivity online is enabling

more businesses to reach beyond local borders, to do business all over the world. Utilising digital tools within a

small-medium enterprise can unlock the productivity and revenue required to grow internationally 25.

International trade has progressed much further than just the

import and export of goods. An increasing proportion of Australian

exports are now made up of services, including tourism, education,

professional services and accounting. For tourism alone, growth of

6% last year outpaces the wider economy, with the sector contributing

AUD$55 billion to GDP and employing almost 600,000 Australians71.

4

STAFFING, DEMAND & SERVICES


MAIN DRIVERS OF INTERNATIONAL DEMAND

25%of the businesses who expect demand for their product or service to expand or contract in the next three years say their standard of quality is driving demand.

25%Quality of product sold

16%

13%

7%

5%

5%

Market demands

Cost (unspecified)

Growth in overseas economies/standards of living

Unique/innovative product

Product competitive with foreign markets

The reputation of high quality Australian goods,

especially food, beverages, dairy and supplements

has helped to promote the overall value of ‘Brand

Australia’ in key Asian markets of China and Japan.

There is potential to leverage this reputation across

many countries in Asia, in a variety of industries,

including tourism, hospitality, education and healthcare.

These service sectors are all showing strong growth

and will continue to do so as middle class consumers

from Asia experience more Australian fare. Several

markets in Asia have benefited from a 'demographic

dividend’ in the past, which is produced when a large,

youthful population provides an affordable labour force

to an economy. This demographic dividend starts to wane

as many countries across Asia transition to an ageing

population increase because the working age population

is not resupplied. Japan, Hong Kong, China, Thailand

and Korea have seen their working age population

decline in absolute terms within the last three years with

more people moving into retirement71. While this puts

pressure on the internal labour force dynamics, an ageing

population presents many new export opportunities,

including demand for increased healthcare, technology,

food and education for service industires71.


GROWTH BEYOND TRADE

REQUIREMENTS DURING ASIA EXPANSION

DON'T KNOW/NOT APPLICABLE

STRONGLY DISAGREE

DISAGREE

NEITHER AGREE OR DISAGREE

AGREE

STRONGLY AGREE

We had to increase the time spent

working on the business

We needed to recruit additional staff

We needed to consult extensively

with external resources

The time taken to focus on growing

our domestic operations reduced

16%47%21%12%4%

17%43%14%18%7%

17%38%20%18%5%

10%35%26%21%6%

Businesses that established dealings in or with Asia

in the last ten years were significantly more likely to

agree that they needed to recruit additional staff (61%

vs 50%), that they needed to consult extensively with

external resources (59% vs 50%), and that the time taken

to focus on growing their domestic operations reduced

(47% vs 36%). This may indicate that for businesses

that are still establishing their Asia expansion,

the operational pressure will build up over time.

However, new entrants to the market may be able to

leverage more digital efficiencies and partnerships.

In the case of service based businesses, the ability to

increase customer sales by increasing workforce may

allow for faster growth, without securing raw materials

and manufacturing capability. In many cases, if a

service or non-physical product is delivered online,

it can be faster to scale the business when responding

to demand.

61% of active businesses in Asia expect to expand their operations in the next three years.


GROWTH BEYOND TRADE

INCREASING HEADCOUNT

Australian businesses surveyed that are active in Asia

have hired an average of 13.4 additional staff in the

past three years to support Asian export demand

and expect to hire a further 13.7 staff, on average,

to support demand in the next three years.

Compared nationally using ABS data, this indicates

that businesses have employed approximately

889,000 staff over the last three years to support

Asian operations, and could hire approximately 927,000

workers over the next three years to support future

growth. Businesses that established their Asian operations

in the last 6-10 years hired the most staff to support Asian

export demand in the past three years (28 employees

on average) and also expect to hire the most staff in

the next three years (26 on average), suggesting that the

peak growth period occurs 6-10 years after establishment of

Asian operations.

60%of business had to recruit additional staff when launching Asia business activities.

AVERAGE CHANGE IN HEADCOUNT DUE TO ACTIVITY IN ASIA

2018

Small $250k - $4.9m

Medium $5m - $39m

Large $40m +

2.1

15.1

22.1

Average no. of new employees in the past

3 years to support export demand

Average no. of additional employees required in the

next 3 years to support Asian demand

ANNUAL TURNOVER

2.0

14.0

24.5

In the last 5 years

In the last 6 - 10 years

9.4

26.3

ESTABLISHED ASIAN OPERATIONS

10.7

28.1


GROWTH BEYOND TRADE

EXPORTING SERVICES

The World Bank estimates that for developed

countries, exports of goods and services account

for an average of 30% of GDP73. In Australia, exports

of goods and services account for 21.3% of GDP and

in New Zealand it is 27.5% of GDP74. The total combined

value of exports of goods and services in 2017 was

AUD$373.2B75 and NZD$71.8B76 respectively.

In 2017 services alone made up 21.8% of total exports

from Australia77, compared to 30.5% of the exports

from New Zealand78. This indicates that Australia has

the potential to grow this proportion of service exports

comparatively. The total value of service exports alone

from both countries is AUD$81.6B79 and NZD$21.9B80

respectively. Considering the workforce of Australia is five

times larger than New Zealand, there is potential to raise

service exports to AUD$100B or more, adding AUD$20B

to export revenue and employing thousands of staff.

The overall growth in the export of services from

Australia is growing steadily, with an average of more

than 8% growth annually for the last four years81.

As more businesses expand their international operations,

a larger proportion of their workforce is engaged

in service based roles. In the case of manufacturing

and exporting of goods, distribution, sales and

administration tasks may be performed internally or

outsourced to supporting partners. These service

roles are essential for achieving trade in multi-lingual

markets with complex and different regulations.

39%of businesses delivering services or non-physical products feel that the quality of their product is driving demand.

AUD$373.2 billion

AUSTRALIA'S TOTAL EXPORTS 2017

21.8%SERVICES

78.2%GOODS

NZD$71.8 billion

NEW ZEALAND'S TOTAL EXPORTS 2017

30.5%SERVICES

69.5%GOODS

Source: Austrade & DFAT, 2018

Source: Statistics NZ & MFAT, 2018


GROWTH BEYOND TRADE

FUTURE GROWTH

Service industries already employ almost nine out

of every ten Australian workers and are the largest

contributor to the Australian economy82. Over 1.1 million

Australian workers are engaged in exporting services.

By comparison less than 250,000 workers are employed

in mining exports82. Australia’s largest export category

is not agriculture, manufacturing nor mining; it is the

services sector. By comparison, as China’s economy

evolves, manufacturing has dropped to 40% of GDP,

while services have now climbed to more than 52%

of GDP 83.

The number of new investment projects in the mining

sector in Australia is now lower than during the boom;

many workers have moved into the comprehensive

infrastructure projects that are underway across the

country, in every sector from public transport to energy

production. The future outlook for education, healthcare

and related services indicates that investment in hospitals

and universities will continue to rise and provide

employment opportunities84. As China’s economy

evolves, manufacturing has dropped to 40% of

GDP, while services have now climbed to more than

52% of GDP85.

In the future, services will play an even greater role

in the Australian economy, providing new export

opportunities for businesses and more employment

opportunities than manufacturing industries, which

will see increased automation86. Additionally, many

of these jobs will likely require further education and

training, and could be regarded as more satisfying

for workers than repetitive manufacturing roles.

The complex labour requirements of an expanding

services sector, occurring at the same time as a

demographic wave of an ageing population,

will require industry and governments to collaborate

closely to secure Australia’s future workforce.

SECTION REFERENCES71 AusTrade Tourism driving economic growth, April 2018 (link)72 ANZ Research - Servicing Australia’s Future, June 2016 (link)73 World Bank / OECD (link)74 World Bank Trade % of GDP 2018 (link)75 Austrade – Australia’s export performance in FY2017 (link)76 Statistics New Zealand - Goods and Services Trade by Country: Year ended June 2017 (link)77 Austrade – Australia’s export performance in FY2017 (link)78 Statistics New Zealand - Goods and Services Trade by Country: Year ended June 2017 (link)79 Austrade – Australia’s export performance in FY2017 (link)80 Statistics New Zealand - Goods and Services Trade by Country: Year ended June 2017 (link)81 Austrade – Australia’s export performance in FY2017 (link)82 ANZ BlueNotes, Australia’s Jobs Future (link)83 Mirae Asset – Impact of the Chinese Consumer, Oct 2017 (link)84 ANZ Research - Servicing Australia’s Future, June 2016 (link)85 Mirae Asset – Impact of the Chinese Consumer, Oct 2017 (link)86 ANZ Research - Servicing Australia’s Future, June 2016 (link)

35%of exporters to Asia surveyed are exporting services.


GROWTH BEYOND TRADE

https://www.austrade.gov.au/news/latest-from-austrade/2018/tourism-driving-economic-growth

https://anzlive.secure.force.com/

https://data.worldbank.org/indicator/NE.EXP.GNFS.ZS

https://data.worldbank.org/indicator/NE.EXP.GNFS.ZS

https://www.austrade.gov.au/News/Economic-analysis/australias-export-performance-in-fy2017

http://archive.stats.govt.nz/browse_for_stats/industry_sectors/imports_and_exports/GoodsServicesTradeCountry_HOTPYeJun17.aspx


http://archive.stats.govt.nz/browse_for_stats/industry_sectors/imports_and_exports/international-trade-in-services.aspx


http://archive.stats.govt.nz/browse_for_stats/industry_sectors/imports_and_exports/GoodsServicesTradeCountry_HOTPYeJun17.aspx


https://bluenotes.anz.com/posts/2015/04/five-ways-services-can-be-australias-job-future





PROTECTING YOUR ASSETSBefore entering a new market, it’s important to consider IP protection, including patents, designs, trade marks and copyright, in the country in which you intend to export your goods and services. This exercise can be challenging as each country has different processes, regulations and time frames for applying for registration and receiving a decision. Therefore it’s advisable to consult an IP professional with expert knowledge in the region.

Intellectual Property firm Spruson & Ferguson is a leading provider of IP services in the Asia-Pacific region and a member of the IPH Limited group. Established in 1887, Spruson & Ferguson has itself expanded into new markets in Asia. They were the first Australian IP firm to establish a Singapore practice more than 20 years ago and since 2016 has opened five new offices across the region. The firm shared the following tips and questions for businesses to ask before expanding their brand into Asia:

When a business starts to trade internationally, protecting its brand assets

and other intellectual property (IP) is essential. Even if a business does

not have a device or technology which is eligible for patent protection,

there are many options for protecting the IP of a business. While there

is often no perfect solution, many actions can lower risk and provide clear

details of ownership and rights in the case of disputes.

BRAND & IP PROTECTION

CASE STUDYSPRUSON & FERGUSON - INTELLECTUAL PROPERTY FIRM


ElementsTypes of IP protection or other registrations that may be available in your export country

Inventions, innovative products processes or services (including product designs and im-portant functional features)

PatentsRegistered designs

Brands, logos, distinctive packaging feature, graphics, artwork, business names, trading names

Trade marksDomain namesBusiness or company name registrationsRegistered designsCopyright

Internet address Domain names

3-D articles, 2-D patterns and ornamentation Registered designs

Literary work (e.g. manuals) artistic works (e.g. drawings), photos, software, macro and electronic forms and systems, musical works, sound recordings, films and broadcasts

Copyright

Know-how and trade secrets (e.g. databases including customer and client lists, internal business processes)

Confidential Information (eg. via a non-disclosure agreement)

Plant varieties Plant breeder’s rights

1. WHAT ELEMENTS OF MY BUSINESS MAY BE PROTECTED BY IP?

2. I’M PLANNING TO EXPORT A PRODUCT,

PROCESS OR SERVICE,

WHAT DO I HAVE TO CHECK FIRST?

• Ensure that you don’t infringe on the IP rights

of other businesses by first conducting a search on

your local competitors’ IP rights in your

export destinations.

• Have you considered registration of your trade

marks, patents, registered designs or copyright

(where available) in the export markets including

any foreign language equivalent trade marks?

• Have you entered into appropriate agreements with

your distributors or other service providers in your

export market governing their use of your IP?

3. HOW DO I SECURE THE TRADE

MARK RIGHTS IN A NEW MARKET?

The rights of a trade mark are only enforceable in the

country where it is registered. As such, it’s important

to carefully consider your export destinations and

whether you have trade mark registrations in those

This summarises possible IP protection and other registrations available for intangible business assets.


CASE STUDY

countries. Registering your trade mark in Australia

is a great first step, but this will not provide you with

trade mark rights in any of your export destinations.

If you wish to secure trade mark registrations in your

export destinations there are two methods available

to you; national applications in each of the countries

you will export to, or an International Registration,

which will enable you to nominate the countries

you will export to as part of a single application.

Not all ASEAN countries are party to the International

Registration system, but most are.

4. WHAT HAPPENS IF SOMEONE

USES MY BRAND OR TRADE MARK

WITHOUT PERMISSION?

In most ASEAN countries there are remedies available

should a third party use your trade mark without

your permission. The applicable law (and cost of

the remedy) varies from jurisdiction-to-jurisdiction.

To reduce the risk of this occurring, a business should

file applications to register trade marks in the countries

where they are looking to do business, even if they

are in the early stages of business discussions with

potential suppliers, partners or distributors; or if they

are attending trade expos to promote their products

overseas. This is particularly important in countries that

are ‘first-to-file’ jurisdictions. In ‘first-to-file’ jurisdictions,

the first person to file the application has the superior

rights (by contrast Australia is a ‘first-to-use’ jurisdiction,

where the first user of the trade mark has the superior

rights). ‘First-to-file’ jurisdictions include the major

export markets of China and Indonesia. Trade mark

‘squatting’ is prevalent in ‘first-to-file’ countries and

applying to register your trade marks in those countries

as early as possible should be a priority. It is almost

always more cost-effective to register your trade marks

early than to attempt to wrestle them back from a third

party later or, worst-case, find yourself locked-out of an

important market because a third party has registered

your trade mark before you.

5. WHAT ABOUT OBTAINING

PATENT AND DESIGN REGISTRATIONS

IN MY EXPORT MARKET?

If you have already applied for patent and design

protection in Australia, there may be an opportunity

to obtain protection in your export markets,

however you should consult with your IP professional.

Importantly, remember if you sell or discuss your

product in public before your application for

patent or design registration is filed, you may lose

the opportunity to obtain IP protection for your

patent or design.

For more information please visit the

Australian Government IP Australia website:

http://www.ipaustralia.gov.au/ and the

Insights section of http://www.austrade.gov.au

ABOUT IPH AND SPRUSON & FERGUSON

Spruson & Ferguson companies are members of the

IPH Limited group – the leading IP professional services

group in the Asia-Pacific region. Established

in 1887, Spruson & Ferguson provides a range of

IP services from its Bangkok, Beijing, Brisbane,

Hong Kong, Jakarta, Kuala Lumpur, Melbourne,

Singapore and Sydney offices. With a combined

team of over 400 people, including patent attorneys,

trade mark attorneys and IP lawyers, Spruson &

Ferguson is one of the only IP firms with true

regional capability, knowledge and experience.

http://www.spruson.com

http://www.iphltd.com.au

GENERAL ADVICE DISCLAIMER

The above information is of general nature and is intended only

to provide a summary of aspects of the subject matter included.

It is not intended to be and should not be treated as comprehensive.

It does not constitute legal or professional advice and should not

be relied upon as a substitute for legal or other professional advice

on any particular matter or to make any particular ecision. Spruson

& Ferguson companies are members of the IPH Limited group,

an ‘ownership group’ for the purposes of the Code of Conduct for

Trans-Tasman Patent and Trade Marks Attorneys 2018.


CASE STUDY


CASE STUDY

Last year, the 2017 ANZ Opportunity Asia Report found that Australian businesses collectively stand to generate

an additional $278 billion in revenue if they act on their intentions to expand into Asia. One year on and this

exciting opportunity continues to grow with Australian businesses well placed to capture $393 billion in revenue.

That’s great news for business and significant for the broader Australian economy with the potential for more than

920,000 new jobs over the next three years.

Asia continues to be a powerhouse of growth when compared with traditional markets of the USA, UK and the

EU. The demand for high quality “Brand Australia” products and services is strong, with many sectors enjoying

success. China continues to be the main market; however North Asian markets including Japan, Korea and ASEAN

nations are growing trading partners. The ASEAN Free Trade Agreement (AANZFTA) has been a crucial tool in

enabling Australian businesses to expand and see success internationally.

The case studies and sections in this report highlighted what the next stage of growth in Asia can look like and

explored key insights to use when planning future expansion. This report also explored how a clear strategy and

partnerships between businesses is essential in securing and growing marketshare in Asia.

We encourage you to share this report with colleagues and business partners, so you can continue the

conversation and decide the right path for your business. Taking the next step isn’t always easy; we hope this

report has provided some useful insights for you to get you started.

CLOSING REMARKS


Mark HandGROUP EXECUTIVE, BUSINESS &

PRIVATE BANKING, ANZ AUSTRALIA

David GreenCEO, ANZ SINGAPORE &

HEAD OF SOUTH EAST ASIA, INDIA

& MIDDLE EAST, ANZ

Powering business owners to start, run and grow their business

We know that growing a thriving and successful international business has its challenges. That’s why we’ve

developed the ANZ Be Trade Ready tool (betradeready.anz.com) in collaboration with the Export Council

of Australia; to help Australian businesses assess and plan for their international expansion. Using ANZ

Be Trade Ready, businesses have developed more than 1,500 bespoke international expansion plans.

At ANZ, we have a history that stretches over 180 years and are committed to the Asia Pacific region, where

we’ve had a presence for over 30 years across 34 markets. We are dedicated to helping Australian businesses

start, run and grow their business and our extensive footprint in the Asia Pacific region is there to help you

make the right connections.


BUILD YOUR STRATEGYANZ has built a range of resources to assist in growing your domestic

business and helping to progress your international ambitions.

We welcome you to explore the resources below and contact us

if you have any questions.

ANZ BE TRADE READY

ANZ Be Trade Ready, a digital tool developed in

collaboration with the Export Council of Australia and

using insights from these Opportunity Asia Reports,

is a one-stop-shop allowing businesses to research,

plan and prepare for international expansion using

one simple, easy to use platform.

This free digital tool is the first of its kind for the Australian

market. Using ANZ Be Trade Ready businesses can:

Navigate Free Trade Agreements

Explore dynamic market and industry trends

Benchmark themselves against other businesses

and assess ‘trade readiness’

Leverage insights from this Opportunity Asia report

and apply them to their businesses by forecasting

revenue and calculating capital requirements

Create a bespoke international expansion plan that

can be downloaded http://betradeready.anz.com

OPPORTUNITY ASIA REPORTS

Digital versions of the current and previous editions of this report include customer case studies and useful

information to help understand markets across Asia.

http://betradeready.anz.com/OpportunityAsia


OPPORTUNITY ASIA DELEGATIONS

The International Business Development team at ANZ run several delegations each year, with the aim of

supporting Australian businesses to grow their knowledge and network internationally. Previous destinations

have included China, Japan, Singapore and Hong Kong. Many iconic Australian businesses have participated

in the programs which include presentations and panel sessions with local experts, business matching,

networking and product showcase events, along with industry focused site visits.

To find out more email: [email protected]

ANZ BLUENOTES

bluenotes is a publication of ANZ's newsroom, a forum for insights, opinion, research and news about the

economy, financial services, investment and society, from within ANZ and outside. The site includes company

profiles of ANZ business customers, along with case studies and interviews with business leaders.

http://bluenotes.anz.com

ANZ BUSINESS GROWTH PROGRAM

Take part in a globally recognised program that helps Australian businesses to develop the skills needed to

establish an organisation that can sustain growth. The program is available as an online guide and a workshop

format facilitated by the Australian Centre for Business Growth at University SA in partnership with ANZ.

http://anz.com.au/promo/businessgrowth/


mailto:%20internationalbusiness%40anz.com?subject=Opportunity%20Asia%20Delegations%20ENQUIRY

ABOUT ANZWE VALUE YOUR INTERNATIONAL RELATIONSHIP

ANZ operates in 34 markets globally, including 29 in Asia Pacific. We have a dedicated team of bankers on the

ground to support Australian businesses in key markets including New Zealand, Singapore, Hong Kong and China.

Your relationship manager together with our Asia Pacific specialist will work with you on a suitable solution to

support your international banking needs. We connect you to opportunities centred around trade and capital flows.

ANZ has been operating in Asia for over 40 years and is recognised as a Top 4 Corporate Bank in Asia, 6 years in

a row1. With the widest geographic coverage amongst the Australian banks, we are best placed to support your

international business needs.

[email protected]

CONTACT US

If you would like to learn more about our global capabilities or express interest in attending one of our Opportunity

Asia customer delegations, email ANZ’s International Business Development team

ABOUT THIS REPORT

The survey data in the report has been collected and analysed for review by EY Sweeney Australia. Refer to the

survey demographics table on the opposite page for more information on the data set used. For additional

details, please refer to the legal disclaimer on the inside back cover of the report. This report has been prepared

by the ANZ International Business Development team, which is part of the Business & Private Banking division

of ANZ Australia. Publishing Date: October 2018

1 Greenwich Associates Large Corporate Banking Study 2018


mailto:internationalbusiness%40anz.com?subject=Opportunity%20in%20Asia%20Delgations%20ENQUIRY

SURVEY DEMOGRAPHICS FUTURE GROWTH

The purpose of the research is to understand the evolving

opportunities, experiences and outlook of Australian

businesses already doing or wishing to do business in

Asia, as well as those not currently considering it.

After a successful launch of the survey and report

in 2015, new topics or sectors are focused on each

year, along with key existing topics remaining for

trend purposes.

Sample profile

Segment

35

20

45

Sample sizeunderweighted #

Percentage of sampleweighted %

344

237

422

Actives

Planners

Potentials

Business sizeBy annual turnover

39

37

24

389

377

237

Small $250k - $4.9m

Medium $5m - $39m

Large $40m +

State

35

30

17

9

8

348

304

170

93

88

NSW / ACT

VIC / TAS

QLD

SA / NT

WA

ActivesAlready have operations or business dealings with Asia

PlannersConsidering operations or business dealings with Asia

PotentialsNot considering operations or business dealings with Asia

TOTAL 1.003 100

Each year we survey 1,000 businesses across Australia for this report, through a combination of telephone and

online interviews. If you would like to take part in the survey, please email: [email protected]


mailto:internationalbusiness%40anz.com?subject=Survey%20ENQUIRY

1. Disclaimer for all jurisdictions, where content is authored by ANZ: Except if otherwise specified in section 2 below, this publication is issued and distributed in your country/region by Australia and New Zealand Banking Group Limited (ABN 11 005 357 522) (“ANZ”), on the basis that it is only for the information of the specified recipient or permitted user of the relevant website (collectively, “recipient”). This publication may not be reproduced, distributed or published by any recipient for any purpose. It is general information and has been prepared without taking into account the objectives, financial situation or needs of any person. Nothing in this publication is intended to be an offer to sell, or a solicitation of an offer to buy, any product, instrument or investment, to effect any transaction or to conclude any legal act of any kind. If, despite the foregoing, any services or products referred to in this publication are deemed to be offered in the jurisdiction in which this publication is received or accessed, no such service or product is intended for nor available to persons resident in that jurisdiction if it would be contradictory to local law or regulation. Such local laws, regulations and other limitations always apply with nonexclusive jurisdiction of local courts. Before making an investment decision, recipients should seek independent financial, legal, tax and other relevant advice having regard to their particular circumstances. The views and recommendations expressed in this publication are the author’s. They are based on information known by the author and on sources which the author believes to be reliable, but may involve material elements of subjective judgement and analysis. Unless specifically stated otherwise: they are current on the date of this publication and are subject to change without notice; and, all price information is indicative only. Any of the views and recommendations which comprise estimates, forecasts or other projections, are subject to significant uncertainties and contingencies that cannot reasonably be anticipated. On this basis, such views and recommendations may not always be achieved or prove to be correct. Indications of past performance in this publication will not necessarily be repeated in the future. No representation is being made that any investment will or is likely to achieve profits or losses similar to those achieved in the past, or that significant losses will be avoided. Additionally, this publication may contain ‘forward looking statements’. Actual events or results or actual performance may differ materially from those reflected or contemplated in such forward looking statements. All investments entail a risk and may result in both profits and losses. Foreign currency rates of exchange may adversely affect the value, price or income of any products or services described in this publication. The products and services described in this publication are not suitable for all investors, and transacting in these products or services may be considered risky. ANZ and its related bodies corporate and affiliates, and the officers, employees, contractors and agents of each of them (including the author) (“Affiliates”), do not make any representation as to the accuracy, completeness or currency of the views or recommendations expressed in this publication. Neither ANZ nor its Affiliates accept any responsibility to inform you of any matter that subsequently comes to their notice, which may affect the accuracy, completeness or currency of the information in this publication. Except as required by law, and only to the extent so required: neither ANZ nor its Affiliates warrant or guarantee the performance of any of the products or services described in this publication or any return on any associated investment; and, ANZ and its Affiliates expressly disclaim any responsibility and shall not be liable for any loss, damage, claim, liability, proceedings, cost or expense (“Liability”) arising directly or indirectly and whether in tort (including negligence), contract, equity or otherwise out of or in connection with this publication. If this publication has been distributed by electronic transmission, such as e-mail, then such transmission cannot be guaranteed to be secure or error-free as information could be intercepted, corrupted, lost, destroyed, arrive late or incomplete, or contain viruses. ANZ and its Affiliates do not accept any Liability as a result of electronic transmission of this publication.

2. Country/region specific information: Australia. This publication is distributed in Australia by ANZ. ANZ holds an Australian Financial Services Licence no. 234527. A copy of ANZ’s Financial Services Guide is available at http://www.anz.com.au

DISCLAIMER


ANZ

BE TRADE READY

A digital tool designed in collaboration with the Export Council of Australia to assist Australian businesses

assess and plan their international expansion.

Visit http://betradeready.anz.com

Could gain $393 billion in additional revenue from Asian expansion

Can benefit from the significant demand for high quality Australian products and services across Asia

AUSTRALIAN BUSINESSES AUSTRALIAN COMMUNITIES

Could thrive from approximately 927,000 new jobs that can be created if businesses act on their intentions to expand into Asia

Australia and New Zealand Banking Group Limited (ANZ) ABN 11 005 357 522

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DISCOVER THE NEXT STAGE OF GROWTH IN ASIA - ANZ€¦ · business decision makers. We encourage you to share it with your network to continue the conversation and identify the growth