In the past, exporting to a foreign country involved careful consideration of a variety of factors, including a strong team of local business partners, suppliers, export merchants, agents and distributors.
The planning and implementation of exporting has changed significantly, however, with the growing prevalence of eCommerce platforms. As Australian small businesses contemplate opportunities for exporting in 2018, it is important to understand how eCommerce platforms can be used to boost the growth of your business by opening new markets.
Growth of e-commerce
The presence of e-commerce is growing substantially. As the internet continues to fuel the interconnectedness of society, the number of consumers that small businesses can reach is magnified. This is particularly relevant for businesses looking to export to emerging market economies such as ASEAN, which is currently the world’s fourth largest internet market with 260 million users*.
By 2020 there will be about 480 million Internet users in ASEAN, part of a growing number of middle class consumers belonging to a major urbanisation process that is creating demand for Australian goods and services. Small businesses should consider preparing their own eCommerce platforms for the incoming wave of online consumers in 2018.
Greater financial support
Like any export plan, financial support for e-commerce is crucial. The Australian Government has established Free Trade Agreements (FTAs) with various partners in Asia, including ASEAN, Japan, Korea and China. These FTAs herald a new era of digital trade for Australian exporters.
For small businesses with a new export contract, Efic has been instrumental in providing additional working capital. An example is CarePlus, a Sydney-based company, which exports premium health products to China’s middle class via e-commerce platform Alibaba.
CarePlus required financial help to purchase more stock in order to fulfil large order. Unfortunately the banks were unable to help. Efic was able to provide CarePlus with a $300,000 export working capital guarantee, allowing its bank to release the necessary funds for the company to pay for the costs of its rapidly expanding business.
Entry into new markets that greater diversity and opportunities for growth
For companies in sectors where there is limited growth due to local market restrictions, there are opportunities to tap into foreign markets to offset this issue.
Kim Peirce, the founder and director of beauty business, Babe Scrub, quickly realised the Australian market alone wasn’t big enough to support the company’s growth potential.
“Export was always part of the equation for the business, and with a limited market in Australia, I always knew overseas markets would factor in our business success,” Ms Peirce said.
“We invested heavily in our entry into the US market due to the large export growth opportunities, and it wasn’t long after launch that we were able to secure our first export contract with a large department store.”
This level of market awareness is spreading among small business, and for those who are looking at outside markets, utilising eCommerce platforms served as a great way to tap into a broader scope of consumers.
This also makes for a smart time to invest in eCommerce platforms, with FTA’s and Efic, providing assistance to small businesses entering into new markets in 2018 and bolster business growth goals.
B2BEXPO Media Partner: Inside Small Business