With a highly diverse, youthful population and in a strategic position for targeting the APAC region, Australia offers plenty of growth opportunities for businesses. Although on its own not a massive market, many companies start in Australia and expand or use Australia as a point in their global strategy.
After reading this guide you will understand the opportunities presented by Australia and how to take make the most of them, as well as have a general understanding of Australia’s place in the global balance of powers and why this affects businesses.
2 Expanding business to Australia
Australia has evolved over the years and now is a major consumer market that most companies consider a starting point for the attractive APAC region. Australia has ties to Asia through agreements such as the China-Australian Free Trade Agreement, but is also highly in tune with American culture and brands. With multiple influences, government incentives and a youthful population, Australia makes an attractive ecommerce and fulfillment market.
3 Quick facts and advantages of doing business in Australia
Highly diverse population with migration accounting for 60% of the population change. This leads to a country that is highly receptive to new products and new companies1
90% of the population lives in a city (Sydney and Melbourne are primary urban areas)2
According to Australia Post, average delivery times to most cities on the eastern seaboard is 1 to 3 days, but from the east coast to Perth and western cities can average 5 to 6 days3
Australia has the world’s highest per capita expenditure on clothes, and it’s projected to grow 56.5% by 2025. Australia is an attractive landscape for clothes and other industries such as lifestyle and sporting goods4
4 Customer trends
It’s crucial to think about customer behavior when expanding in new markets. How does your target customer usually buy products? What’s their preferred method of delivery? The following factors will help you consider how customer trends will affect the way you go about doing business in Australia.
A recent study by Roy Morgan indicates that Australians spent over $41 billion while shopping online in 2016, with 4 out of 10 people purchasing at least once a month via ecommerce stores.
- Australian consumers want fast delivery times, including same day delivery. Over 80% of Australians have used or want to use same-day shipping, and 75% have used or want weekend or after-hours shipping1
- Standard, Express and Click & Collect are the top 3 most common shipping options that Australian retailers currently offer
- Mobile-friendly shopping experiences, whether it be an app or a web-based mobile friendly store, ensure that your customer is able to make purchases from wherever they are. With over 19.4 million mobile phone users in Australia, over 35% of ecommerce transactions were made on mobile devices, and nearly 27% of mobile users make purchases on a weekly basis2
5 Fulfillment models
Cross-border into Australia
For many companies, testing out the Australian market is fairly easy. Using a point in APAC, they ship cross-border into Australia. Australians are used to shopping cross-border, making it a market receptive to a cross-border strategy. The main points of entry into Australia are from Hong Kong, China or Singapore.
The most common Australian fulfillment models are a single fulfillment center in the Sydney area, or 2 fulfillment centers in Sydney and Melbourne. In this scenario, Sydney and Brisbane are covered by a Sydney location and Melbourne, Perth and Adelaide are covered by the Melbourne location.
Small parcels carriers
The most common carrier in the area is Australia Post, which covers the whole of Australia. Australia Post has a number of different delivery methods which can cater to your export plans, including secure parcel collection lockers (accessible 24/7) with hundreds of locker stations throughout the country.
For business parcel deliveries:
- Australia Post and Toll makeup 60% of market share
- TNT 10% of market share
- DHL 5% of market share
For direct-to-consumer deliveries:1
- Australia Post 75% market share
- Toll 10% market share
- TNT 5% market share
Other small parcel carriers
The Australian market has seen many courier and small parcel players emerge to provide innovative shipping solutions. Here’s a few examples:
Sendle leverages partner courier companies’ spare capacity for orders
ParcelPoint uses over 1500 outlets including newstands, pharmacies and convenience stores to provide pick up locations
WizMe offers a national flat rate of $10.69 plus a small cost for a box
The Australian ↩
7 How to start doing business in Australia
Because Australia isn’t a massive market, many companies start in Australia and expand or use Australia as a point in their global strategy.
When weighing up your move into the Australian market, think about the pros and cons of incorporating a company and the type of German company structure that might suit you. Once you’re set on a business vehicle, apply for an ABN (Australian Business Number), TFN (Tax File Number), GST (goods and services tax) and PAYG (pay as you go tax—if you have employees).
You’ll also need to determine whether your product will need an import declaration, and trademark registration if you decide to set up your own Australian domain. Finally, find a fulfillment center and carriers that provide coverage in Australia in the regions that you’re targeting.
Market Finder contains a breakdown of the World Bank’s Doing Business Index, where you can get a heads-up about the ease of doing business in Australia. It ranks on a scale of 1 - 190 how easy it is for a business to set up and run a local firm in each of the world economies. Ten topics are assessed to gain the score. These include the ease of getting electricity, the ease of getting credit, and the potential for cross-border trade.
When trading in a new market, it’s good to know the administrative, regulatory, and logistical challenges that may lie ahead. Navigating legal requirements and working out logistics is made a lot easier with Market Finder - find further support and tools including in-depth guides and insights.
Ingram Micro Commerce & Lifecycle Services provides logistics solutions to help businesses connect supply and demand.
The materials provided on the site are for informational purposes only. For financial, tax, or legal advice, consult a specialist.