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Scott Strain, UKTI's Trade Director for Australasia was joined by Dianne Tipping, Chairman of Export Council of Australia to give hints and tips to British companies looking to export to Australia.
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Exporting To Australia Getting it right!Scott StrainDirector for Trade at UKTI Australia & New Zealand
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What we will be covering in today’s Webinar
• A very brief overview of Australia & UK-Australia trade
• What to expect
• Ways to market
• Typical distribution costs & quoting & getting paid
• Preparing for success & visiting the market
• Next steps and how UKTI can help
• Overview of customs & importation – Diane Tipping
• Q&A
What we will not be covering today
• The various stages of exporting. If you are new to exporting go to www.opentoexport.com
• A sector by sector breakdown of the Australian economy. Go to Slideshare.net and look for our “Doing Business in Australia & New Zealand” Webinar slides.
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Why Australia?
• You’ll feel at home immediately:
– Over 1,000 UK companies and more Brits than in any other country
– Very similar business, legal and regulatory culture
• Best performing OECD country economically, with good growth prospects
• Strong Australian & NZ dollar making UK goods and services more affordable
• Closely linked to fast growing Asia-Pacific nations
• Massive opportunities for UK companies in oil and gas, health, ports, infrastructure, ICT, education, low carbon, financial and business services
• Free trade agreements with China, the ASEAN nations and Singapore
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Australia & NZ - an economic snapshot
NZ Australia UK
Population 4.4 million 22.5 million 62 million
Global GDP ranking 55th 13th 7th
GDP growth est. 2012 2.3% 3 % 0.6%
GDP per capita ($US 2011) $36,648 $40,800 $36,600
Ease of doing business (World Bank 2011)
3rd 15th 7th
Unemployment (Sept 2012) 6.5% 5.1% 8.1%
Land mass – sq kms 263,310 7 692 000 000
242 000
Australia – A brief geographical overview
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Australia- States & Territories
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Another perspective
Top 7 Cities
Population in Thousands
Where the market is...
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UK/Australia trade links
• UK exports to Australia grew by over 60% from 2007 - 2011 (to more than £10 billion)
• UK’s overall exports contracted first half of 2012, to Australia rose
• 7th biggest market for services exports and 18th largest for goods
• UK is 2nd biggest foreign direct investor in Australia
Australia: what to expect
• A sophisticated multicultural market
• Pacific area- fast growing- self-sufficient
• Regional vs. National factors
• Traditional sources of supply have changed
• New ways of doing business
• E Commerce
• GST
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What to expect from Australian importers
• Value for money over price
• Cautious about changing suppliers
• Australian products preferred but they are open to international goods & services
• Go with your best price – avoid haggling too much
• Expect familiarity and a direct approach
• Rigid enforcement of standards and practices – get it right first time!
Import Channels & Distribution
• Importers & Wholesalers: usually small & specialist. Few general importers,
• Commission Agents/Fulfilment Houses: few and far between
• Manufacturers & End users
• Retailers: usually source locally & use importers for smaller orders
• Internet retail: the fastest growing market
Ways into the MarketCombined Agent & Distributor Network
END USER
DISTRIBUTO R
END USERS
AGENT
END USER
DISTRIBUTO R
UK FIRMState State
Ways into the MarketIndustrial ProductsThe Licensing Agreement
EXPO RT PO TENTIAL ?
END USER END USER END USER
AUSTRALIAN FIRM -LICENCING AG REEM ENT
UK FIRM
Ways into the MarketThe Subsidiary
EXPO RT PO TENTIAL
END USER END USER END USER
AUSTRALIAN SUBSIDIAR Y
UK FIRM
Approximately 2000 UK Subsidiaries in Australia
Typical Distribution Channel costs in Retail
• Overseas buying agents/commission agents 3-6% FOB
• Importers & Wholesalers selling volume consumer goods 40-80% on landed duty paid goods
• Discount Department Stores 35-40% of the selling price
• Department Stores 40-75% of the selling price
• Small Retail 50-100% of the selling price
• Supermarket Chains 15-35%
Quoting & Getting Paid
• US dollar the most common currency
• Most exporters expect Free On Board or Free Carrier quotations but;
• Those importing commodities often prefer Cost & Freight terms
• Most Australian importers take out their own insurance so don’t expect Cost Insurance and Freight or Cost Insurance Paid terms
• Remember that any customs duties will be based upon the FOB price
• Offer your best price, don’t haggle too much.
• Letter of Credit common place
• Remember to factor in delivery times to tour terms of payment
Key Elements for Success
Set medium / long term strategies
Set reasonable marketing plans and sales targets and review them regularly
Committed distributor - right for your product
Committed supplier
Complete openness - pricing / margins
Service is paramount
Get involved
Allow sufficient time
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Key Lessons from the Market Visit
• Think Australian - NOT POM, sell to Australians for volume
• Add value vs. local offering
• Support distributor
• Price-points (understand margins and currency)
• Need to innovate
• Create volume / increase rate of sale to win both trade and distributor support
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How can UKTI help you?
• Provide grants to help you research the market through our Export Market Research Scheme (EMRS)
• Conduct market research & contact finding for you through our Overseas Market Information Service (OMIS)
• Help you attend Exhibitions through our Tradeshow Access Programme (TAP)
• Help you successfully visit the market as part of a Trade Mission through our Visit Scheme (MVS)
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Next Steps
• If you are interested in learning more about opportunities here then get in touch with your local UKTI International Trade Adviser. You can find your local ITA through our website www.ukti.gov.uk
• or contact myself at [email protected] and I will do what I can to help.
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