This week, the Chinese government cancelled a plan to implement a series of cross-border eCommerce laws that had the potential to stifle Australia’s international trade growth. For Australian businesses this back-peddle is great news.
Ease of access to Australian goods for Chinese consumers is not only good for the national economy but it also paves the way for our homegrown businesses to be international success stories.
Take for example much-loved Australian vitamin brand Blackmores, who focused on Asia as a platform for future growth back in 2010 and has since expanded into seven new countries. By 2015, the company’s export revenue had grown 25 per cent to more than $94 million.
Similarly, Tasmanian infant formula producer, Bellamy’s, floated in 2014 surging 34 per cent on its stock market debut. Bellamy’s has seen rapid growth in China since then helping to drive its share price to a peak last year.
Real and virtual barriers to cross-border trade are continuing to be dismantled — now, every online consumer, wherever in the world they might be, has the potential to shop from Australian retailers.
Why cross-border isn’t just for big businesses
The bottom-line benefits of cross-border trade are not just for big businesses. Rather, global marketplaces offer an opportunity for Australia’s small and medium business (SMB) community to grow revenues and profits.
The consumer shift towards eCommerce has opened the world’s virtual doors to Australian SMBs. The opportunity to scale a business is now at the fingertips of every business owner, and is possible from the comfort of an Australian living room.
Small businesses are nimble, innovative, and excitingly they have the potential to become big businesses. In Australia, SMBs punch well above their weight. They dominate private sector employment, employing more than 4.8 million Australians, and contribute close to $379 billion worth of industry value to the Australian economy. The number of actively trading businesses in Australia increased for the third year in a row in 2016, by 2.4 per cent — an increase primarily driven by growth in the small business community.
This growth can continue to be fuelled by the billions of consumers in both developed and developing markets now shopping online. The world has truly become an SMB’s oyster.
Why the cross the border opportunity is now
The potential posed by cross-border trade is evident in the numbers: McKinsey and Company estimate that the value of cross-border eCommerce transactions in China was over AUD$50 billion in 2015.
Overseas consumers have an increasing appetite for Australian goods and services. This demand expands the potential consumer market for an Australian business by billions. There is also another important driver: Australian brands have become synonymous with quality and Australian sellers have developed strong relationships of trust with buyers around the world. The ‘Australian-made’ certification, introduced nearly 30 years ago, has provided domestic businesses with an envied reputation for excellence in production and service, making our goods very marketable.
SMBs should be encouraged to look outside Australia’s borders for sales opportunities, particularly given the evidence points to unprecedented opportunities for online sales to key Asian markets.
Brian McDonnell is Director of Channel and Marketplaces, PayPal Australia
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