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  • Written by Tanya McGovern


Australian exporters are riding the global e-commerce wave into new international markets, with plans to invest in online marketing and the workforce to optimise this opportunity. Research from the 15th DHL Export Barometer 2018 shows that export confidence among Australian exporters is at an all-time high – a new record since the study began in 2003.

 

E-commerce continues to dominate the agenda – the DHL Export Barometer 2018 shows that 61% of exporters reported favourable growth in actual orders over the past 12 months, the highest record in the last decade. 75% of them also expect to record an increase in international sales over the next 12 months, a rise of 8% from last year’s result.

 

Commenting on exporters’ confidence in the international export market, Gary Edstein, CEO and Senior Vice President for DHL Express Oceania, said, “This year’s positive sentiment among the majority of exporters is a significant sign that the Australian export market is close to peak performance. Australian exporters have demonstrated a real tenacity that sees them pursuing further expansion in the face of global political and economic developments. Undoubtedly, e-commerce has been a positive force for this continual growth, contributing significantly to the confidence of Australian exporters and equipping them with the platforms necessary to go global.”

 

New Zealand remains the top export destination and Asia Pacific markets hold promise

Australian exporters are continuing to find strength in historical trade partners, with New Zealand remaining the most popular export market at 66% (up from 61% in 2017).

 

Tim Harcourt, JW Nevile Fellow in Economics, UNSW Sydney and Host of The Airport Economist, commented, “New Zealand continues to be an attractive export market for Australian business, thanks to the close bilateral ties shared under the long-standing Australia-New Zealand Closer Economic Relations Trade Agreement. Among exporters who have been exporting for more than 20 years, 80% of them continue to show confidence in trade with New Zealand – a testament to the enduring strength of the Trans-Tasman relationship.”

 

North America comes in at second place at 54% with growth of 6% on 2017, followed by Europe (42%), and the UK (41%). This is consistent with the findings from the study last year.

 

In the last 12 months, Australian exporters have also looked beyond traditional trade partners, with a focus on Asia Pacific. China leads at 41% (compared to 6% on 2017), with other countries and territories following close behind:

  • South East Asia at 38% (up 10% from 2017)

  • Hong Kong at 35% (up 8% from 2017)

  • The Pacific at 28% (up 4% from 2017)

  • Taiwan at 22% (up 8% from 2017)

 

Australian exporters remain optimistic amid global political developments

Australian exporters remain unshaken in the midst of the current global political and economic environment, opting to remain mostly positive or neutral towards these changes and developments.

 

This year, close to half (49%) of exporters believe that US foreign and economic policies will have limited impact on their export orders in the next two to three years, but 21% of them are cautious about the impact of US and China trade tensions on their export business.

 

On the flipside, exporters are positive about the impact of the Trans-Pacific Partnership (34%), China’s Belt and Road initiative (27%) and emerging export technologies such as artificial intelligence and blockchain (31%).

 

Harcourt commented, “What history has taught us is that political and economic events do come in peaks and troughs, and this may explain the record high level of confidence among Australian exporters despite these ongoing developments. They recognise that trade will inevitably continue, and there will be new growth opportunities to explore further. Australian exporters have developed exceptional skills in assessing their competitive position in the international market, adapting to regulatory changes and implementing innovative strategies to take on new challenges.”

 

 

E-commerce continues to drive growth

This year’s research indicates that Australian exporters have decidedly taken to e-commerce as a selling channel, with 4 in 5 exporters (79%) now generating orders or managing enquiries online. Pure e-commerce businesses are also on the rise, evident from the 12% increase, over the last four years, in exporters who generate 100% of their export orders through online channels. Amongst them, exporters in the fashion sector are reaping the most benefits from e-commerce, with 68% of sales generated from online channels – higher than the average of 47% across all other sectors.

 

“E-commerce, with its global accessibility and affordability, has been the real driver for growth among the consumer goods sector and particularly for small businesses. Tools like e-commerce plugins and social media have provided small Australian businesses with the opportunity to reach the international market with relative ease and within a shorter set-up timeframe. The traditional barriers to international trade, such as finding local distributors and negotiating partner contracts, are significantly lowered when a business adopts e-commerce as a channel to directly reach the customer,” Edstein commented.

 

Exporters plan to tackle new markets with growth strategies

In the coming year, close to 50% of Australian exporters are seeing potential in new markets, making plans to expand:

  • Europe tops the list as the most desirable new territory (17%) among exporters

  • South East Asia (15%), the UK (11%), Indonesia (11%) and Japan (11%) follow in close stride

  • New businesses which have been in operation for less than 5 years, are at the forefront of this trend, with 63% of them indicating that they plan to expand in the next 12 months

 

To support these growth plans, 39% of exporters are looking to increase their online marketing spend, and looking into social media to enhance their marketing mix. More than half of exporters (58%) are employing social media to market their products. Among the favourites are Facebook (45%), Instagram (30%) and LinkedIn (20%). Newer platforms are also growing in popularity, with exporters beginning to introduce Instagram Stories (10%), Facebook Messenger (8%), WeChat (6%) and Snapchat (3%) into their marketing mix. Online marketplaces, such as eBay, are also gaining traction with 23% of exporters utilising them to generate orders.

 

Other growth strategies include an emphasis on fulfilment and delivery (37%), customer service (29%), website design (27%), and to make available more localised products (24%). 70% of exporters also indicate that they will increase employee wages to drive retention and 51% of them will make new hires.

 

Harcourt commented, “Rising wages and the creation of new jobs are positive news for both Australian businesses, employees and the local economy. This year’s results show that growth on the international stage does bring investment back into the local economy, further strengthening the confidence of Australian businesses to continue with innovative strategies for international growth.”


 

About the DHL Export Barometer

 

Conducted by ACA Research, 212 Australian exporters were surveyed for the DHL Export Barometer 2018 between June 29 and July 23, 2018.

 

The DHL Export Barometer is an initiative aimed at analysing export confidence in Australia and identifying export trends, and was first launched in November 2003. It is based on nationwide independent research, examining the business outlook of Australian exporters, highlighting changes in overseas market demand and providing insights into the factors impacting Australia’s export trade.

 

DHL – The logistics company for the world

 

DHL is the leading global brand in the logistics industry. Our DHL family of divisions offer an unrivalled portfolio of logistics services ranging from national and international parcel delivery, e-commerce shipping and fulfillment solutions, international express, road, air and ocean transport to industrial supply chain management. With about 360,000 employees in more than 220 countries and territories worldwide, DHL connects people and businesses securely and reliably, enabling global trade flows. With specialized solutions for growth markets and industries including technology, life sciences and healthcare, energy, automotive and retail, a proven commitment to corporate responsibility and an unrivalled presence in developing markets, DHL is decisively positioned as “The logistics company for the world”.

 

DHL is part of Deutsche Post DHL Group. The Group generated revenues of more than 60 billion euros in 2017.

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