Helping small business target global opportunities

At Australia Post, we have a long history of championing small business and helping them connect to new markets. Today, some of the most exciting new markets are overseas, and they’ve never been more accessible.

So I’m very excited to share our latest Insights Paper, Meet the Australian Small Businesses Taking on the World, launched today by the Hon. Phillip Dalidakis, Victorian Minister for Trade & Investment, Innovation & the Digital Economy and Small Business.

Based on two pieces of Australia Post research ? reaching more than 2,500 small businesses ? the paper reveals which international markets small businesses are currently selling to, what they’re selling and how.

It identifies three clear stages of maturity for small businesses entering and exploring overseas markets – Aspiring, Emerging and Established – and uncovers some of the challenges, learnings and successes experienced as they go and grow into overseas markets, concluding with some recommendations about the kind of support they need to make the leap.

How Australian small businesses are taking on the world today

Our research identified that 27% of Australian small businesses report having customers located overseas – that extrapolates to 734,000 in total, which is amazing. But it also means that the vast majority have not yet taken the plunge – what an exciting opportunity for growth.

So who are they?

The paper compares and contrasts three segments, each with distinct characteristics and attitudes towards selling internationally

Aspiring Explorers

Those yet to sell internationally but intending to in the next three months. They aren’t sure if it’s worth the effort and are unsure of how to get help.

Emerging Explorers

Those currently receiving some overseas orders but have typically been sending overseas for less than a year. Many emerging small businesses might start their overseas experience by accident when their Etsy or eBay store catches someone’s eye in a far-away location.

Established Explorers

Have been sending goods or parcels overseas for a year or more. They know how to send but want to optimise their overseas business, as well as needing help on which markets to target next.

Targetting overseas markets

It’s not surprising that we’re seeing small businesses starting to venture overseas – the growth of eCommerce means that a small business today has the opportunity to be global from day one – but how can we accelerate their participation?

The research indicates that those small businesses who do expand into selling overseas often focus first on markets with similar cultures, or languages – as indicated by the finding that the top three locations for small businesses selling overseas are the US (46%), NZ (42%) and the UK (38%). However, China (35%) is not too far behind, with other south-east Asian countries like Singapore, Malaysia, Indonesia and Thailand also in the mix.

There’s an enormous opportunity for rapid regional growth. By 2030, four of the five biggest economies in the world will be righ[1]t on our doorstep in Asia. China continues to open up to trade and rapidly increase its level of imports and Indonesia is tipped to be the world’s fourth biggest economy by 2030.

So it’s encouraging to see that our aspiring explorers are starting to recognise the value to be found in non-English-speaking markets. In fact, this group is five times more likely to consider selling into China than anyone else.

An opportunity to grow Australia’s export economy

Today, small businesses represent 59% of Australian exporters but they are credited with contributing only 1% to Australia’s export sector. And some of this goes under the radar with consignments valued at less than $2,000 not currently captured by the ABS. If we can nurture their growth to shift small business from 1% of exports to the US benchmark of 5.5%1 we have the potential to open up a $4.4b opportunity.

Our research shows that overwhelmingly, small businesses want clearer and more reliable information about the processes involved with entering a market but many of the assistance available today is actually targeted more to medium or large exporters.

If we can make it easier for them to plan and prepare by providing simple and affordable services, small businesses are much more likely to take that first step and make it successful.

It’s an exciting time to be a small business, and an exciting time to help them take on the world.

Get your copy of the whitepaper here.

[1] Census 2014, https://www.census.gov/foreign-trade/Press-Release/edb/2014/exh1a.pdf, accessed 15 May 2017. Includes Manufacturer and Wholesaler companies. Excludes companies manufacturing pre-packaged software and books, freight forwarders and other transportation service firms, business services, engineering and management services, gas and oil extraction, coal mining, communication services and companies where industry could not be determined