Australian exporters are taking the world in their stride, thanks to e-commerce and innovation. Research from the DHL Export Barometer 2017 shows export confidence is at its highest level since 2011, with overall positivity in international trade evident.
The 14th annual research study into Australian exporter confidence found that two-thirds (67%) of exporters surveyed expect sales to increase over the next 12 months – just 2% below the peaks of positivity seen in 2007 and 2010.
Furthermore, exporters have reported a growth in actual orders, with 56% of exporters recording an increase in orders over the past 12 months, which is the highest percentage in over six years.
Being active online appears to pay off, with 83% of exporters who generate all their orders from online channels expecting an increase in revenue.
CEO for DHL Express Oceania Gary Edstein said: “Optimism among the majority of exporters is a great indication that the Australian e-commerce market is in a good shape. We are seeing innovative businesses gain significant traction on the global scale, encouraged by the ease of access to larger international markets via e-commerce and online channels.
“In particular, we’ve seen a rise in the number of newer exporters who have been exporting for less than five years. They now make up around one-third of Australian exporter landscape.”
As an indication of the overall optimism, employment growth is expected to increase with about 51% of exporters indicating they will employ more staff next year. 63% of exporters also expect to increase their workers’ wages.
E-commerce becomes the norm and online marketing increases
The DHL Export Barometer 2017 shows online commerce now permeates the export sector.
A whopping 78% of Australian exporters generate orders from online channels – and nine in ten (89%) of those who export consumer goods source orders online. Furthermore, 85% of small businesses (those with up to four employees) generate business online.
Mr Edstein said: “The profile of businesses involved in exporting has changed massively in the past five years due to e-commerce. We have seen significant growth in SME customers and businesses that send goods directly to consumers – as compared to via a retail presence or an international partnership previously.”
Proving the popularity of online marketing to bring in these sales, a quarter of exporters say they spend 60% or more of their marketing budget on these online platforms. For instance, exporters have also been investing on enhancing their websites (visualisation and usability), improving fulfillment and customer service.
New Zealand is top export market as Australian businesses consolidate target markets
In an uncertain economic environment, Australian exporters are focusing their efforts on a handful of markets, with traditional English-speaking destinations emerging as top priorities.
New Zealand remains the top export market for Australian exporters, with 61% sending goods across the Tasman, and one in four naming it their largest export market. North America comes second (among 48%), with Europe (38%) and the UK (36%) following closely behind. In North East Asia, China (35%) and Hong Kong (27%) takes the lead, ahead of the Japan and South Korea who have Free Trade Agreement (FTA) with Australia.
Exporters look to new markets to continue growth in the long term
Results from this study showed that the proportion of exporters selling to multiple regions has reduced sharply from 76% in 2015 to 68% in 2017. Similarly, the average number of countries that businesses export to is now 4.4, falling from 5.2 in 2016.
However, over the next 12 months, 54% of exporters claim they plan to target new territories, particularly in New Zealand and South East Asia. This includes 66% of those who have been exporting for less than five years.
Exporters appear to understand that to continue to grow, they need to diversify trading efforts, offsetting any potential negative impact from disruptive trade policies in an international location. It is also a positive sign that one in four exporters thought there were no challenges to exporting, suggesting that traditional concerns such as regulatory and legal barriers are subsiding.