While ANZ’s report pointed to Ebay and Amazon as the two most preferred online sales platforms among businesses operating in Asia, these platforms have made few inroads in countries like China. Here Alibaba and JD.com remain the leading ecommerce platforms commanding 58 per cent and 16.3 per cent market share respectively.
Now that’s service
Today more than 1.1 million Australian workers are engaged in exporting services including tourism, education, professional services and accounting. Last year, services accounted for 21.8 per cent of total exports from Australia, compared with 30.5 per cent of New Zealand’s exports. This suggests, despite the relative difference between the countries, Australia’s services sector has the chance to increase trade with Asia.
Australian job ads juggernaut Seek Limited expanded internationally in 2005 and now has a presence across Asia. Recognising the growing opportunity, the company plans to invest further in Asia in 2019.
Seek’s experience points to the rise in trade provided by a digital economy and online platforms. International connectivity can create cost effective reach beyond local borders.
Important considerations for service providers looking to export include accessing or undertaking market research and finding ways to protect a brand’s intellectual property.
Bumps in the road
Despite the opportunities Asia presents, it’s important to fully understand the potential barriers. Firstly, operating costs in Asia continue to climb. Among other things this can be attributed to regulatory and compliance costs, tax liabilities and access to capital and logistics.
One of the other major cost drivers is labour. China’s manufacturing workers’ average hourly wages reached $A3.60 in 2016, a 64 per cent increase since 2011, according to Euromonitor.
These challenges can be mitigated, however, by identifying and working with the right partners and collaborating with like-minded local businesses.
In a world of fake news, businesses must also consider product imitations and risks to intellectual property as recently experienced by iconic wine brand Penfolds. Reputations built on long-standing, high quality products and service can quickly deteriorate.
But companies like New Zealand’s Fonterra and vitamin supplier Blackmores are fighting back, working with e-commerce giant Alibaba to pilot blockchain technology to improve supply chain traceability and transparency.