With so much uncertainty in the world, is export something you should consider, or should you just be focussing on the local market for now? It’s an interesting question that many businesses have been facing with the closing down of trade routes due to COVID-19, trade wars between countries, drought, bushfires and so much more that’s been happening in the last 12-24 months.
There are plenty of reasons to still consider exporting for your business, particularly knowing that the export markets do continue to grow, and that the increasing demand for safe and trusted Australian products remains. It is interesting to note businesses that export hire 23 per cent more staff, pay 11 per cent higher wages and have labour productivity that is 13 per cent higher than non-exporting firms.
Here are some of the reasons to still consider exporting as part of your business growth.
Current worldwide issues can provide market opportunities that may not have already been there. COVID-19, for example, is providing some great opportunities across the Asian markets, as buyers and consumers in these markets can see that we have dealt with the pandemic much better than many of our competing countries including the USA, UK and European nations. It confirms their thoughts that Australia has the systems and processes in place to produce high quality food from a clean and hygienic platform.
Growth in Sales
Companies who are experiencing slower sales growth or have reached their sales ceiling in Australia may well look at exporting to continue to increase their sales growth. Afterall, Australia has a population of 25 million people; Asia and the Middle East combined has a population of around 4.8 billion people!
It is well known that Australian products are in demand in many countries due to our high and consistent quality. Consumers globally are looking for products that they can trust, and this gives us a competitive advantage.
Travel pre-pandemic was experiencing significant growth, especially across the Asian and Middle East regions. The expectation is that this will return post-pandemic. These travellers often visit retailers and food service venues in-market. Having your product displayed in multiple markets increases your brand visibility and enhances your company’s reputation of being a serious business that produces highly demanded products.
Despite COVID-19, many food businesses have seen significant growth in demand for their products, particularly those that supply the retail and eCommerce channels. Brands that are available in international markets have also demonstrated a stronger upside. With so many industries faltering as a result of the pandemic, investors see investing in food-producing businesses as an attractive option.
Market & Risk Diversification
Unfortunately, as has been proven recently, you never quite know what is around the corner. Putting all your eggs in either the domestic, retail, food service or eCommerce channels may result in catastrophic outcomes for your business. Being able to diversify your market and spread your risk, provides you with a safety net – this includes participating in export channels.
With fresh food, companies that can provide the international market with produce when it is not in season in that country or available from the northern hemisphere will always be in demand.
Economies of Scale
Plenty of Australian businesses have the capacity to produce much more than their current market demands. By exporting, you can utilise this additional capacity, reduce your marginal costs, increase your sales and be more profitable.
Exporting has plenty of benefits for those businesses in the position to take advantage of it. Whether you are exporting to Asian nations or to the Middle East, there are a lot of opportunities available for Australian businesses who can produce high-quality products.
Want to find out more about exporting and how it can help your business grow? Export Connect has an online export masterclass that you can join and receive highly rated insights on how to develop a successful export business. Click below to find out why 100% of masterclass participants recommend the Export Connect masterclass to industry peers.