Two New Trends in South Asia Present Opportunities for Australian Exporters

The countries in South Asia particularly India, Bangladesh and Sri Lanka share strong trade relationships, as well as a developing retail ecosystem. The region, even during the lockdowns, remained a strong importer of Australian processed food and agricultural products, highlighting that there is significant room for more Australian companies in the region. If you are an Australian company operating in South Asia, or considering it, these insights provide significant opportunities for you to look at how you can adapt your response to the changing demands of the South Asian consumers.

1.     Increased focus on health and wellness

Boosting health and immunity has become a focus among consumers in South Asia during the pandemic – and this is an area where Australia has already started to make inroads with plenty of more opportunities to spare. One of our iconic brands, Swisse recognized this opportunity well in advance, and is now selling across 10 major E-commerce platforms in India.

There is room for more and the region offers a multiplying consumer base who appreciates our clean, green and reliable manufacturing standards.

Similarly, there is an increased demand across South Asia for products that are perceived to be good for the immune system. In India and Bangladesh this applies to fresh produce, and in particular to Manuka honey from Australia. Australian citrus continues to be in high demand in Bangladesh even during the local harvest season.

Furthermore, there is an increase in demand for oats in the breakfast cereal category with leading mills/food manufacturers approaching Austrade for B2B import opportunity from Australia. Oats are generally seen as immune-boosting ‘clean’ products, and a desirable alternative to the hot, carb-laden traditional breakfasts in the region. I am referring to significant number as the breakfast cereal market continues to thrive in the region. In particular, the Indian breakfast cereal market was A$301 million growing at 18% CAGR with oats dominating the category at 30 % value share. Australia continued to lead the Indian imports with a market share of 70% of processed oats and 74% of raw oats.[1]

Other interests include- functional foods with health-promoting properties such as protein bars, whey protein, which have also accelerated amidst COVID-19 and we are in the process of launching several new Australian brand in the upcoming months.

The opportunity for Australian companies in this sector is significant when you consider the growth of E-commerce (which I have elaborated in the next para) and a South Asian consumer, which has turned from being reactive to pro-active when it comes to their health and wellness.

2.     E-commerce is the next big shift in the region

The E-commerce market in South Asia is uniquely poised for a boom, with the internet economy expected to grow to more than A$200 b within the next five years.[2] Online e-retail sales across South Asia clocked a sales volume of over A$75 b in the previous financial year, with an average y-o-y growth of over 40% across the major markets of India, Sri Lanka and Bangladesh.[3]

With a combined 670 m internet users, and over 130 m online shoppers, the region is the second largest mass market for Australian companies, second only to China.[4]

It is Austrade’s contention that the market for E-commerce products out of Australia, particularly in the health, beauty, nutraceutical and packaged food space, will grow exponentially in the coming years, alongside the burgeoning growth in the industry generally.

Importantly, given the preponderance of cheap mobile data, cheap delivery logistics, and a large and emerging middle class across Asia, E-commerce will likely generate significant new jobs (both corporate and manufacturing) in the coming years. The increasing development of this digital ecosystem in Australia will also lead to the creation of high growth businesses, and a next wave of Australian entrepreneurs who will venture overseas.

What does all this mean for Australian exporters?

These two consumer trends can really allow Australian companies to take a leap forward in the region. If an Australian company is able to develop their product and a brand narrative that speaks to health, immunity and is E-commerceable, then you have a stronger proposition for this market.

The rapid shift to e-commerce also gives Australian companies more effective route to market, which can open significant opportunities to test bed their products in the region. Austrade has ongoing engagement with some of the leading E-commerce platforms in the region, including an Australian store on Amazon India currently selling over 250 sku’s.[5]

One thing which we have been doggedly pursuing since March is to ensure that Australian companies and South Asia buyers stay connected- thru a series of webinars, podcasts and even B2B matchmaking sessions on WhatsApp. This has yielded results for Australian companies in forging stronger ties and for some making new business relationships.

Austrade continues engaging with peak bodies & states, developing a campaign to increase the pipeline of Australian companies in the region, as well as increasing our brand recognition in the market. Please connect with us at Austrade and we can assist you explore some of these trends further and make those valuable business connections in the region.

We as a market are too big to be ignored. It is time for you to have South Asia as a part of your overseas expansion. If not now, then when?

Source:

1. https://www.dgciskol.gov.in/
2. https://www.worldbank.org/en/news/press-release/2019/12/16/e-commerce-can-spur-growth-boost-trade-in-south-asia
3. https://openknowledge.worldbank.org/bitstream/handle/10986/32718/9781464815195.pdf?sequence=4&isAllowed=y 
4. https://www.gsma.com/mobilefordevelopment/wp-content/uploads/2019/09/Mobile-Internet-Connectivity-SouthAsia-Fact-Sheet.pdf   
5. https://www.amazon.in/l/20951450031