MELBOURNE, Australia, Sept. 1, 2022 /PRNewswire/ -- Australian businesses have ambitious plans for international expansion, as new data from global fintech Airwallex reveals more than two thirds of small-to-medium Aussie businesses (69 per cent) plan to be operating outside Australia by 2027.
Airwallex's inaugural Australian Business Growth Index found a third of SMEs surveyed (34 per cent) currently have operations overseas, but this is projected to more than double in the next five years.
The independent research, which surveyed more than 200 Australian small-to-medium enterprises (SMEs), found that businesses already operating in international markets are experiencing commercial success. Of these businesses, two in five surveyed (42 per cent) reported being profitable and more than half are breaking even (52 per cent).
"Aussie businesses are bolstering their position to weather the current economic challenges," said Sam Kothari, Head of Growth for ANZ at Airwallex. "International expansion is now being used as a strategy to remain resilient and viable by tapping into new markets and widening the pool of potential customers."
Moving overseas has unlocked new customer segments for SMEs and broadened their overall market share, with 80 per cent 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 per cent of SMEs who are already operating overseas, and 99 per cent of those planning to do so in the next twelve months, recorded growth last year.
"Australians are innovators, and there is growing global demand for the products and services they provide," added Sam. "We have seen this firsthand; Airwallex is the chosen partner to many Australian 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 Australian businesses to access borderless opportunities all around the world."
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 per cent) said this market had been their biggest generator of revenue outside of Australia in the past year, closely followed by the U.S. (29 per cent).
These markets were echoed in terms of where the most beneficial prospects lie, with a quarter (26 per cent) of SMEs operating or planning to operate overseas identifying Southeast Asia as the most lucrative in the year ahead.
The U.S. followed closely behind Southeast Asia, with 25 per cent 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 per cent) and EMEA/UK (15 per cent).
Case studies
Sustainability sells – the reusable water bottle business sweeping the world up
memobottle is one Australian-founded business which is enjoying commercial success in overseas markets, with 50 per cent of its revenue now 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 U.S. 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 between regions. 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," said Jonathan.
"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."
In orbit around the world – 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 per cent). 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 customers –- all of the signals are clear that expansion in this market looks lucrative," said 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."
"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 (3PL) in Hong Kong which has made shipping to countries in Asia cheaper than ever before."
"All of these components are coming together to make Southeast Asia one of the most dynamic business environments in the world. 9 per cent of our total sales come from the region as present but this will surpass into double digits in no time.
Note to press
For more insights, please find Airwallex's Australian Business Growth Index report here.
The Airwallex Australian Business Growth Index
The Airwallex Australian Business Growth Index is the first edition of an annual series that takes the pulse of the Australian SME ecosystem. The Index explores a range of opportunities and challenges facing the SME sector, including growth, funding, staffing and technological innovation. Airwallex surveyed 202 small-to-medium businesses in Australia (20-199 employees) in late May 2022 across a range of industries, locations and annual turnovers.
About Airwallex
Airwallex is the leading financial technology platform for modern businesses growing beyond borders. With one of the world's most powerful payments and banking infrastructure, our technology empowers businesses of all sizes to accept payments, move money globally, and simplify their financial operations in a single platform.
Established in 2015 in Melbourne, our purpose is to connect entrepreneurs, business builders, makers and creators with opportunities in every corner of the world. Today, Airwallex has a global footprint across Asia-Pacific, Europe, and North America. Find out more at www.airwallex.com.
