Made in Melbourne, exporting to Asia
Tom Reilly | Saturday, 12 July 2008
ONE look at the soaring profits of mining companies is enough to show how important exports to China and other emerging markets are to the success of domestic companies.
But it is not just the vast multinationals such as BHP Billiton and Rio Tinto that are making their presence felt across South-East Asia. Thousands of Australian businesses, many of them small or medium sized, now export to the region.
"Of the Australian companies doing business in the region, only about 10% would be the huge corporations that are well-known names," says Tim Harcourt, chief economist with Austrade, the government body that helps domestic firms find foreign markets. "The vast majority are smaller firms. That said, about 90% of the business is done by that top 10% of exporters."
While the resources sector has been at the vanguard of the exporting game, the burgeoning middle classes in South-East Asia are behind a boom in Australian-produced goods and services. The expertise of engineers, architects, lawyers and educators has been much sought after, and top-end manufactured goods and foodstuffs.
Victorian-based outdoor clothing specialist Wilderness Wear has bucked the trend of importing clothing from Asia by selling their garments to Korea, Japan and Taiwan. And founder Philip Endersbee is hoping to add China to that list in the coming year.
"We've sent products to possible clients in China and they're very interested, as there's a middle class emerging there who are wanting to do things like bush trekking and climbing and can afford to buy high-quality gear," he says.
Mr Endersbee believes Australian companies can achieve success in South-East Asia even when competing in areas where these countries have large exports.
"If you think about your brand and product and produce high-end goods, which they don't do so well, then you can find a niche in the market," he says. "Also, it helps if you can address all those things which make dealing with China such a headache, such as long lead times, large minimum order quantities and lack of flexibility. If you can make these your strengths, then you can be certainly be competitive overseas."
There are more than 4250 domestic businesses exporting to China alone; more than 3000 of them have offices there.
Tim Harcourt believes that future growth in the country, especially for small and medium-sized companies, may well be focused on the second- and third-tier cities such as Kunming, Chengdu, Qiangdao and Chongqing as opposed to Beijing and Shanghai, which have been penetrated by foreign companies for many years.
"Austrade has 15 offices across China and we've had more and more people come to us looking to get involved in this market," Mr Harcourt says.
"They've always got good products but, unlike the multinationals, they don't have networks on the ground to help. We help them identify what the competition is
But it is not just the vast multinationals such as BHP Billiton and Rio Tinto that are making their presence felt across South-East Asia. Thousands of Australian businesses, many of them small or medium sized, now export to the region.
"Of the Australian companies doing business in the region, only about 10% would be the huge corporations that are well-known names," says Tim Harcourt, chief economist with Austrade, the government body that helps domestic firms find foreign markets. "The vast majority are smaller firms. That said, about 90% of the business is done by that top 10% of exporters."
While the resources sector has been at the vanguard of the exporting game, the burgeoning middle classes in South-East Asia are behind a boom in Australian-produced goods and services. The expertise of engineers, architects, lawyers and educators has been much sought after, and top-end manufactured goods and foodstuffs.
Victorian-based outdoor clothing specialist Wilderness Wear has bucked the trend of importing clothing from Asia by selling their garments to Korea, Japan and Taiwan. And founder Philip Endersbee is hoping to add China to that list in the coming year.
"We've sent products to possible clients in China and they're very interested, as there's a middle class emerging there who are wanting to do things like bush trekking and climbing and can afford to buy high-quality gear," he says.
Mr Endersbee believes Australian companies can achieve success in South-East Asia even when competing in areas where these countries have large exports.
"If you think about your brand and product and produce high-end goods, which they don't do so well, then you can find a niche in the market," he says. "Also, it helps if you can address all those things which make dealing with China such a headache, such as long lead times, large minimum order quantities and lack of flexibility. If you can make these your strengths, then you can be certainly be competitive overseas."
There are more than 4250 domestic businesses exporting to China alone; more than 3000 of them have offices there.
Tim Harcourt believes that future growth in the country, especially for small and medium-sized companies, may well be focused on the second- and third-tier cities such as Kunming, Chengdu, Qiangdao and Chongqing as opposed to Beijing and Shanghai, which have been penetrated by foreign companies for many years.
"Austrade has 15 offices across China and we've had more and more people come to us looking to get involved in this market," Mr Harcourt says.
"They've always got good products but, unlike the multinationals, they don't have networks on the ground to help. We help them identify what the competition is