One in three Australian SMBs are planning for international growth

Amit Mahto, Country Manager of Marketplace at Australia Amazon
Amit Mahto, Country Manager of Marketplace at Australia Amazon

One third of Australian SMB owners plan to expand internationally in the next two years, according to a new Global Empowerment study commissioned by Amazon Australia.

Many Australian SMBs have their sights set on North American customers with more than one in five already operating or hoping to expand to one of the world’s largest regions.

Trans-Tasman business growth tops the list, with more than one in three businesses already operating in or planning to expand into New Zealand closer to home.

The study, which surveyed Australian SMBs, reveals business owners’ aspirations to increase revenue, expand their customer base and future proof themselves as the pandemic continues.

More than three in four Small and Medium Businesses with existing international footprints cited the impact of COVID-19 as a factor encouraging them to consider global growth.

New data revealed by Amazon on the growing success of Australian businesses selling in its global stores shows that the potential for e-commerce to support global ambitions.

More than 11,000 Australian businesses, many of which are SMBs, now sell through Amazon and sold more than 25m units across its Australian and international stores in the past year.

Currently, 60% of Australian sellers export their products through Amazon to international customers, with export sales by Australian sellers increasing by 30% on the prior year.

New research into Australian SMB’s global ambitions

Further insights from the Global Empowerment study include:

Key motivators for growth

Whilst increase in revenue (49%) and expanding customer base (43%) are key motivators for Small and Medium Businesses in their attempts to grow internationally, future proofing of the business (28%), and the personal sense of achievement (28%) also score highly.

Pandemic drives export consideration

Almost a third of Australian SMBs with existing international footprints agreed that operating in other countries enabled them to navigate the challenges of the COVID-19 pandemic.

Two-thirds of existing exporters recognised an increase in global sales and 77% cite the impact of COVID-19 as a factor encouraging them to consider further international expansion.

No regrets

For those SMBs who have already expanded to international countries, 96% have no regrets, and over 80% wished they’d embarked on their global journey sooner.

With over a quarter reducing risks during low sales periods by leveraging peak seasons in other regions, and more than 60% increasing their customer base, it’s not surprising to see almost 80% now planning to expand to additional countries within the next 12 months.

SMBs’ hunger for support on global growth journeys

Despite a clear desire to expand internationally, the study found that a quarter of SMBs admitted to feeling overwhelmed, and 1 in 5 unsure of where to begin.

1 in 4 SMBs feel that they don’t have the right tools, support or knowledge to expand globally on their own. Local businesses are hungry for support across the following categories.

  • Cost effective solutions to handle shipping and fulfilment (28%)
  • Navigating local legal and compliance requirements (32%)
  • International marketing support (30%)
  • Local taxation advice (34%)
  • Mentorship (23%)

Amit Mahto, Head of Amazon Marketplace Australia, said that more local businesses were now harnessing Amazon’s worldwide active customer accounts, fulfilment services, and hundreds of seller tools, features and educational resources to support their international growth.

“With so much to think of when reaching overseas customers – from navigating local compliance requirements, product fulfilment, whilst building an understanding and marketing to a completely new audience – the small business seller faces many potential challenges.”

“We aim to be a destination where local sellers harness Amazon’s brand recognition, tools and features to help them list and manage products, and our fulfilment services globally.”

“We are extremely proud and humbled by the diverse and ever-growing community of sellers building their businesses with our Amazon Marketplace global stores.”

Amazon Australia has launched over one hundred new features, tools and services for its local sellers since January 2019. Brisbane-based Penny Skateboards embarked on a journey with Amazon in late 2019 to expand their international e-commerce channels.

As they continue to infiltrate the US skateboard scene, the past 12 months has seen Penny Skateboards recognise $1.73 million in revenue through Amazon globally.

Nathan Reid, the Head of Operations at Penny Skateboards offered additional insights.

“Whilst we previously had a presence in the United States of America, selling through Amazon has enabled us to catapult our sales and reach a huge range of American customers.”

“We were fortunate enough to integrate our e-commerce system with Amazon and set up US fulfilment solutions just before the first wave of COVID hit, meaning our sales have been able to thrive during the pandemic without encountering any issues with overseas fulfilment.”

“From its Olympics debut to its increasing popularity with influencers globally, we need to ensure our marketing campaigns move fast to leverage the skateboarding renaissance.”

“Amazon’s marketing tools enable us to do exactly that. With our mission to help people globally to get on a board and have fun without boundaries or expectations, we’re getting set to expand our e-commerce further in Canada, Mexico, UK and Europe with Amazon.”