Date post: | 30-Jan-2015 |
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Exporting To Australia Getting it right!Scott StrainDirector for Trade at UKTI Australia & New Zealand
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What we will be covering in today’s Webinar
• A very brief overview of Australia & UK-Australia trade
• What to expect
• Ways to market
• Typical distribution costs & quoting & getting paid
• Preparing for success & visiting the market
• Next steps and how UKTI can help
• Overview of customs & importation – Diane Tipping
• Q&A
What we will not be covering today
• The various stages of exporting. If you are new to exporting go to www.opentoexport.com
• A sector by sector breakdown of the Australian economy. Go to Slideshare.net and look for our “Doing Business in Australia & New Zealand” Webinar slides.
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Why Australia?
• You’ll feel at home immediately:
– Over 1,000 UK companies and more Brits than in any other country
– Very similar business, legal and regulatory culture
• Best performing OECD country economically, with good growth prospects
• Strong Australian & NZ dollar making UK goods and services more affordable
• Closely linked to fast growing Asia-Pacific nations
• Massive opportunities for UK companies in oil and gas, health, ports, infrastructure, ICT, education, low carbon, financial and business services
• Free trade agreements with China, the ASEAN nations and Singapore
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Australia & NZ - an economic snapshot
NZ Australia UK
Population 4.4 million 22.5 million 62 million
Global GDP ranking 55th 13th 7th
GDP growth est. 2012 2.3% 3 % 0.6%
GDP per capita ($US 2011) $36,648 $40,800 $36,600
Ease of doing business (World Bank 2011)
3rd 15th 7th
Unemployment (Sept 2012) 6.5% 5.1% 8.1%
Land mass – sq kms 263,310 7 692 000 000
242 000
Australia – A brief geographical overview
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Australia- States & Territories
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Another perspective
Top 7 Cities
Population in Thousands
Where the market is...
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UK/Australia trade links
• UK exports to Australia grew by over 60% from 2007 - 2011 (to more than £10 billion)
• UK’s overall exports contracted first half of 2012, to Australia rose
• 7th biggest market for services exports and 18th largest for goods
• UK is 2nd biggest foreign direct investor in Australia
Australia: what to expect
• A sophisticated multicultural market
• Pacific area- fast growing- self-sufficient
• Regional vs. National factors
• Traditional sources of supply have changed
• New ways of doing business
• E Commerce
• GST
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What to expect from Australian importers
• Value for money over price
• Cautious about changing suppliers
• Australian products preferred but they are open to international goods & services
• Go with your best price – avoid haggling too much
• Expect familiarity and a direct approach
• Rigid enforcement of standards and practices – get it right first time!
Import Channels & Distribution
• Importers & Wholesalers: usually small & specialist. Few general importers,
• Commission Agents/Fulfilment Houses: few and far between
• Manufacturers & End users
• Retailers: usually source locally & use importers for smaller orders
• Internet retail: the fastest growing market
Ways into the MarketCombined Agent & Distributor Network
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DISTRIBUTO R
END USERS
AGENT
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DISTRIBUTO R
UK FIRMState State
Ways into the MarketIndustrial ProductsThe Licensing Agreement
EXPO RT PO TENTIAL ?
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AUSTRALIAN FIRM -LICENCING AG REEM ENT
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Ways into the MarketThe Subsidiary
EXPO RT PO TENTIAL
END USER END USER END USER
AUSTRALIAN SUBSIDIAR Y
UK FIRM
Approximately 2000 UK Subsidiaries in Australia
Typical Distribution Channel costs in Retail
• Overseas buying agents/commission agents 3-6% FOB
• Importers & Wholesalers selling volume consumer goods 40-80% on landed duty paid goods
• Discount Department Stores 35-40% of the selling price
• Department Stores 40-75% of the selling price
• Small Retail 50-100% of the selling price
• Supermarket Chains 15-35%
Quoting & Getting Paid
• US dollar the most common currency
• Most exporters expect Free On Board or Free Carrier quotations but;
• Those importing commodities often prefer Cost & Freight terms
• Most Australian importers take out their own insurance so don’t expect Cost Insurance and Freight or Cost Insurance Paid terms
• Remember that any customs duties will be based upon the FOB price
• Offer your best price, don’t haggle too much.
• Letter of Credit common place
• Remember to factor in delivery times to tour terms of payment
Key Elements for Success
Set medium / long term strategies
Set reasonable marketing plans and sales targets and review them regularly
Committed distributor - right for your product
Committed supplier
Complete openness - pricing / margins
Service is paramount
Get involved
Allow sufficient time
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Key Lessons from the Market Visit
• Think Australian - NOT POM, sell to Australians for volume
• Add value vs. local offering
• Support distributor
• Price-points (understand margins and currency)
• Need to innovate
• Create volume / increase rate of sale to win both trade and distributor support
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How can UKTI help you?
• Provide grants to help you research the market through our Export Market Research Scheme (EMRS)
• Conduct market research & contact finding for you through our Overseas Market Information Service (OMIS)
• Help you attend Exhibitions through our Tradeshow Access Programme (TAP)
• Help you successfully visit the market as part of a Trade Mission through our Visit Scheme (MVS)
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Next Steps
• If you are interested in learning more about opportunities here then get in touch with your local UKTI International Trade Adviser. You can find your local ITA through our website www.ukti.gov.uk
• or contact myself at [email protected] and I will do what I can to help.
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