Small Businesses In Australia Going Offshore
Recent research shows that 84% of Australian SMEs believe that their businesses will grow significantly over the next 12 months. This article will illustrate the factors and tools that paving the way for them to go global.
SME leaders are aware of the opportunities and have a sunny outlook when it comes to business growth and cross-border trade. Recent research from FedEx has shown that nine in 10 SMEs are confident that their imports or exports will either stay the same or increase over the next 12 months. In fact, cross-border trade contributes to business success, with half of the respondents that were surveyed in the research stating that it accounts for more than 50% of their businesses’ annual turnover.
While cross-border trade has a strong positive impact on business revenue, there is clear opportunity for SMEs to increase their export potential: 91% of businesses are importing goods, but only 75% are currently exporting goods.
Diversification opening new opportunities for SME trade
One compelling answer is that the markets Australian SMEs export to are highly diversified, reducing dependence on any one export region or market. The top 3 export markets circle the Pacific rim: New Zealand, China and the United States. But Australian SMEs are also looking at new markets such as India and Germany (both at 15%) and numerous markets within North Asia and South East Asia, such as Singapore (18%), South Korea (17%), Indonesia (14%) and Hong Kong (12%).
Recognizing the opportunities available overseas, and adjusting export levels to meet international demand ensures that SMEs are consistently maintaining a strong and stable revenue stream. This is further bolstered by continued positive perception of Australian products.
Brand Australia remains key
Industry 4.0 for SMEs
3 in 4 Australian SMEs have adopted new technologies in the last 2 years, and almost half are expected to increase usage over the next 12 months in the belief that it will reduce costs, speed up distribution and give access to new markets.
Not surprisingly, mobile payment is the most widely adopted technology by SMEs, while over a quarter use automation and another 22% use big data and analytics to support business opportunities. As SMEs continue to better understand the benefits technology can bring to their business, there is no doubt adoption will continue to increase.
Three in four (76 per cent) Australian SMEs have adopted new technologies in the last two years, and half (48 per cent) are expected to increase usage over the next 12 months, with the belief that it will reduce costs (41 per cent), speed up distribution (38 per cent) and give access to new markets (35 per cent).
Not surprisingly, mobile payments (42 per cent) is the most widely adopted technology by SMEs, while over a quarter (28 per cent) use automation and another 22 per cent use big data and analytics to support business opportunities. As SMEs continue to better understand the benefits technology can bring to their business, there is no doubt adoption will continue to increase.
Where certain technology might be too onerous for an SME to tackle, partners and suppliers can step in and deliver. For instance, blockchain is being investigated by the logistics trade to further assist in traceability and other potential efficiencies, which will benefit all cross-border businesses, small and large.
Old challenges and new
Completely seamless and borderless international trade for SMEs remains some way off, but Australian SMEs clearly have the appetite and, increasingly, the tools to take on the world.
i The data cited throughout this article is taken from FedEx owned SME research in Asia Pacific