More than 80 percent of Australian businesses have Asia on their radar, but most are failing to generate significant revenue from Asian markets, a new report from Asialink Business has found.
Of the businesses surveyed, 83 percent generate less than half of their annual revenue from Asia, and 55 percent generate less than 5 percent of their annual revenue from Asia. This is because they haven’t taken the necessary steps to grow.
These include hiring staff with the right language skills and experience to operate in Asia, keeping up with Asian customers’ fast-changing preferences and having a presence on the ground – three characteristics that top performers in the Asian market share.
“The business opportunities that exist in Asia are well known and well versed. But while many Australians businesses are including Asia as part of their strategy, we know that majority of these organizations don’t optimize their operations to maximize revenue streams,” Jonathan Yeung, head of Asian business banking at Commonwealth Bank of Australia, which sponsored the report, said.
One business that is tapping into the Asian market successfully is Australian health and beauty brand G&M Cosmetics, which was profiled in the report.
The Sydney-based business, which has been manufacturing and selling to national and global retailers for over 22 years, first started exporting to China in 1998, and now exports 600,000 units of skincare products to the country every week.
CEO Zvonko Jordanov said it is crucial to understand the customer in each market you sell in.
For instance, Emu oil-based products are best-sellers in Taiwan and Malaysia, but Lanolin is preferred in China. This changes quickly, though, and Jodanov said avocado, goat’s milk, and manuka honey products are on the rise.
At its laboratory in Australia, G&M also looks at the suitability of certain skincare products for different markets based on local conditions, including weather and humidity.
“We’re all humans. The number one thing is that you respect the consumer. Give them a proper product and don’t promise the impossible,” Jordanov said.
According to the Asialink Business survey, businesses that tailor and adjust their product or service and marketing earn, on average, more than eight times the revenue from Asian markets than those that sell the same offering using the same marketing.
Businesses that always mention these Asian language skills and experience in the Asian market in job ads earn, on average more than five times the revenue from Asia than those that do not.
And 33 percent of businesses that earn more than 5 percent of their annual revenue from Asia undertook in-country visits at least once a month – more than double that of businesses earning less than 5 percent of their revenue from Asia.
The businesses most likely to be doing well in Asia were professional services firms, according to the report, followed by private education and training organizations.
China was the top Asian market for 44 per cent of respondents, followed by the ASEAN countries, which include Indonesia, Malaysia, Philippines, Singapore, Thailand, Vietnam, Laos, Brunei, Cambodia, and Myanmar, for 32 per cent of respondents.
Overall business sentiment towards Asia remains positive, despite the ongoing China-US trade tensions, the report found.