Going North – why Aussie retailers should set their sights on the Asia Pacific
Wondering whether it’s time to start selling your wares offshore? The under-targeted Asia Pacific region represents an exciting opportunity for Aussie retailers willing to put in the effort, says Laura Doonin.
Looking to expand your customer base and increase sales in the 2020 financial year? For Australian brands that have succeeded in surviving a series of lean years at home, establishing a presence in offshore markets can be a golden opportunity to give the bottom line a boost.
A string of local players have already done so – Tony Bianco, Zimmermann and General Pants Co’s designer denim label, Ksubi – all of which derive a healthy slice of their revenue from overseas shoppers.
On our doorstep
The UK, the US and New Zealand are the markets that expansionist Aussie retailers typically tackle first. While there are cogent reasons for brands to continue to hone in on this triumvirate, they’re not the only territories in which it’s possible for local players to gain a toehold.
The large and increasingly prosperous nations to our north – China, India, Indonesia – and the mature Japanese and Korean markets represent a much bigger opportunity; a $1.4 trillion one within the next four years, according to research by Statista.
That’s the Asia Pacific region’s predicted annual retail ecommerce spend in 2023. By contrast, online shoppers in North and South America, Europe, the Middle East and Africa are expected to rack up a collective tab of $1.3 trillion during the same period.
Australia is well positioned geographically to service the burgeoning mass of buyers in the Asia Pacific region. Local brands with a long-term vision for growth and prosperity should be positioning themselves to enjoy their share of the spoils.
Related: Sarah Murdoch, global marketing director at Jurlique, chats to MarCast host Dave Jackson about her experience in China, vast differences in the Chinese consumer’s mindset and how it’s influenced her marketing strategy today.
The lure of the familiar
Put yourself in any retailer’s shoes and it’s easy to see the attractions of the Western hemisphere markets. Make a foray into the UK or the US and you’ll find consumer tastes and cultural conventions differ little from our own. There’s no language barrier to contend with, shipping is easy to arrange and converting currency a straightforward matter, at least for retailers with a modern ecommerce platform already in place.
By contrast, tackling one or more countries in the Asian region can appear a trickier – and riskier – affair. There’s been plenty written about the complexities and costs associated with establishing a presence in China, for example. The market is large and highly competitive, and starting out small is challenging given the social platforms that allow businesses to do so in other territories – Facebook, Instagram, YouTube et al – are non grata in the Middle Kingdom.
Building a brand necessitates becoming active on local web platforms, such as the giant Tmall, the Chinese answer to Amazon, with Chinese language content. It’s a brave business that attempts to do so without deep pockets or a local partner – the lack of either has deterred many Australian brands from trying.
Those that want to give it a go should begin by familiarising themselves with the Chinese consumer mindset and market. A clutch of big name brands, including Gucci, Chanel and Chemist Warehouse, have already blazed a trail. Examining their approaches to payment methods, customer service delivery and the like can be helpful for smaller players keen to avoid expensive errors.
Meanwhile, China is not the only Asian country with a burgeoning middle class, keen to embrace discretionary consumption.
India, too, has boundless potential. The rapidly developing subcontinental nation is set to become the world’s third-largest consumer market, behind the US and China, by 2030, according to the World Economic Forum.
And there are opportunities aplenty elsewhere in the region, including in Japan, where the demand for premium quality, beautifully merchandised items is perennial.
Foot in the water
China aside, making a foray into one or more Asia Pacific markets need not be an exorbitantly expensive exercise. With margins under squeeze at home, most Australian retailers don’t have a bigger than Ben Hur budget to play with – and the good news is, they don’t need one.
On-the-ground research and a commitment to delivering a genuinely localised customer experience are critical to success and they don’t have to cost the Earth.
Moustache Republic has seen clients enjoy big results by starting small, with a localised website and social media presence, currency conversion tools to make transactions seamless, irrespective of whether customers are paying in baht, ringgit or yen, and a carefully curated range.
Working with strategic local partners – retailers whose branding and customer experience are compatible – can also help a fledgling product or range gain traction. A contained experiment, conducted over three to six months, can enable an Australian brand to test the waters in a new territory, without compromising its financial position back home.
Planning for a bigger, brighter future
Australia’s retail market has been historically constrained by its size and geography; and homegrown brands and retailers will continue to have their fortunes dictated, partially at least, by prevailing economic conditions. Expanding offshore is an inevitability for those businesses which aspire to build brands which are big, rather than boutique.
Retailers that invest in establishing a presence in the emerging and rapidly growing markets of the Asia Pacific region may gain an early mover advantage and a lucrative revenue stream that’s shielded from domestic vicissitudes.
Laura Doonin is director of Moustache Republic
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Image credit:Anatoliy Gromov