Australian businesses have ambitious plans for international expansion, as new data from Airwallex reveals over two thirds of small-to-medium businesses (69%) plan to be operating outside Australia by 2027. Airwallex’s inaugural Australian Business Growth Index found 34% of businesses have operations overseas, but this is projected to double in the next five years.
What were the findings of Airwallex’s survey?
The independent research, which surveyed over 200 Aussie SMEs, found that businesses already operating in global markets are experiencing success. Of these businesses, two in five surveyed (42%) reported being profitable and more than half are breaking even (52%).
Moving overseas has unlocked new customer segments for small-to-medium enteprises (SMEs) and broadened their overall market share, with 80% saying the volume of new customers they’ve gained from moving into new markets has been “significant”.
The research also found that despite sustained economic hardship, including rising inflation and disrupted global supply chains, 96% of SMEs who are already operating overseas, and 99% of those planning to do so in the next twelve months, recorded growth last year.
For SMEs trading overseas, the region where they have seen the biggest growth in sales and revenue was Southeast Asia. Almost two in five respondents (39%) said this market had been their biggest generator of revenue in the past year, closely followed by the U.S. (29%).
These markets were echoed in terms of where the most beneficial prospects lie, with a quarter (26%) of SMEs operating or planning to operate overseas identifying Southeast Asia as the most lucrative in the year ahead. The U.S. followed behind Southeast Asia, with 25% of businesses with an international footprint or ambition naming the States out as the next most attractive market in the near future, surpassing China (18%) and EMEA/UK (15%).
What were the executive’s thoughts on the findings?
“Aussie businesses are bolstering their position to weather the current economic challenges. Expansion is now being used as a strategy to remain viable by tapping into new markets and widening the pool of potential clients,” said Sam Kothari, Head of Growth for ANZ at Airwallex.
“Aussies are innovators, and there is growing global demand for their products. Airwallex is the chosen partner to many businesses looking to alleviate the global roadblocks associated with setting up shop in international markets, including opening accounts overseas, high FX fees and managing employee expenses. We see ourselves playing a central role in opening the door for Aussie businesses to access borderless opportunities,” Sam further added.
What brands have made it so far on the global scene?
Sustainability sells – the reusable water bottle business sweeping the world up. memobottle is one Aussie-founded business which is enjoying commercial success in overseas markets, with 50% of its revenue being generated abroad, mainly in the Southeast Asia region.
In the past twelve months, the reusable water bottle movement has on-boarded distributors in Indonesia and Singapore, and exhibited at trade shows in the United States and Europe.
memobottle Director and co-founder Jonathan Byrt cites the business’ focus on international markets as crucial to its success during the pandemic period. “Having a global presence during this tumultuous 24 months has allowed us to switch marketing and revenue focus.”
“Being in multiple markets unlocked opportunities for the business which have allowed us to grow and expand. Our operations in China and the U.S. kept our revenue steady while Australia and Europe battled with sustained lockdowns and geopolitical events,” he said.
“The majority of sales from a recent product launch (65 per cent) came from customers in the States. If we had all our eggs in one basket, this wouldn’t have been possible.”
Orbitkey has their eyes on global dominance. Melbourne-founded Orbitkey has established a strong presence in the U.S. in recent years, which has become its dominant market above Australia, representing almost a third of its total sales (31%). The business now has its sights on Asia, where it has a small but growing presence. For Orbitkey’s co-founder and Managing Director Rex Kuo, Orbitkey was always destined to scale beyond its home market.
“As a product design company that prides itself on user-centred design and innovation, our products are designed for a global audience – not just Australians. We see great value and potential in the Asian market, where demand is growing exponentially from existing clients –- all of the signals are clear that expansion in this market looks lucrative,” commented Rex.
“It’s not just demand that makes Southeast Asia such an attractive business proposition. Cheaper and more competitive payment gateways are becoming more easily accessible than ever before, eliminating a large proportion of high transaction and currency conversion fees that were associated previously whilst doing B2C commerce in the region,” Rex added.
“We’re investing the revenue that was previously swallowed up by high transaction costs to maximise the opportunities for our growth in Southeast Asia, including locating a third-party logistics in Hong Kong which has made shipping to countries in Asia cheaper than before.”
“All of these components are coming together to make Southeast Asia one of the most dynamic business environments in the world. In addition, 9% of our total sales come from the region as present but this will surpass into double digits in no time,” Rex concluded.