Last year the ANZ Opportunity Asia report pointed to a potential $138 billion windfall for our economy if Australian businesses acted on their intentions to enter the Asian market.
This year’s survey provided even greater reason for optimism, suggesting that the commercial opportunity now sits at around $278 billion.
The 2017 report which was launched at a recent ANZ customer delegation to Asia, reiterates the significant possibilities our geography, trade relations and reputation for high quality products, present.
This is especially the case for food and beverages, with around two-thirds of Australia’s agricultural products already exported each year.
Behind the $278b opportunity is the distinct uplift in Australian businesses which are already active in Asia and looking to expand, as well as the intentions of more Australian businesses to enter the market in the next three years.
Another catalyst is Asia’s growing middle class which, particularly in China, has a strong desire for our premium meat, dairy products, fresh fruits, seafood, wine and other products.
Willie Smith’s Cider, situated on 46 hectares of Tasmania’s Huon Valley, is one Australian enterprise sizing up the Asian market.
Already exporting to Hong Kong and Taiwan, China is a future focus following chief executive officer Andrew Smith’s recent visit to the region with ANZ.
Having transitioned to become an organic apple orchard in 1997 and later diversifying into apple cider, the multi-generational business is set to capitalise on Australia’s reputation for high quality and safe food and beverages.
Mr Smith, a fourth-generation owner, says that it’s not just this reputation that’s attracting consumers, but also the image consumers associate with Australia.
“While the scale and potential of a region like Asia presents is exciting, it does demand considered planning and an understanding of each of the markets.
At the same time, it’s important to appreciate and use the power of “Brand Australia” which is clearly influencing consumers’ purchasing.
Increasingly consumers in Asia are wanting to taste, feel and interact with Australian brands that carry our celebrated clean, green, fresh image,” Mr Smith said.
The sheer growth of the Asian market is an attractive proposition for brands like Willie Smith’s Cider with the number of middle class consumers in Asia forecast to grow from 525 million in 2009 to around 3.2 billion by 2030 while around 88 per cent of the world’s next billion people to enter the middle class will be in Asia.
Interestingly, ANZ’s latest report showed of those businesses operating in Asia, 68 per cent said the ASEAN region is the key region to be present in Asia, followed by Greater China (57pc) and North Asia (33pc).
Indonesia is the largest export market for Australian agriculture in ASEAN and despite being amongst the world’s largest agricultural producers, its appetite for Australian products continues to grow.
The value of Australian agricultural exports to Indonesia increased from $2.3 billion in 2009-2010 to $3.1 in 2015-2016.
Australia’s agri producers have reason to feel optimistic.
With the advent of ecommerce, improving freight infrastructure and trade agreements, the barriers to entry continue to dissolve. Although determining where to start can be daunting, connecting with industry, government and talking to peers that may already be exporting into Asia, are important first steps for any business wondering where to begin.
- Isaac Rankin is regional business banking general manager with Australia New Zealand Banking Group.