MORE than 80% of Australian businesses have Asia on their radar, but most businesses are failing to generate significant revenue from Asian markets, according to a report from Asialink Business, sponsored by the Commonwealth Bank of Australia.
More than half of businesses (55%) surveyed generate less than 5% of their annual revenue from Asia.
Asia’s emerging middle class continues to offer huge growth potential for Australian businesses of all sizes. By 2030, emerging Asian economies will have middle class markets that are more than $20 trillion bigger than they are today.
“The Asialink Business Commonwealth Bank of Australia survey demonstrates that the ‘top performers’ all share common strengths, including employing a highly Asia capable team, customising products to keep-up with changing local tastes, and investing in an on-the-ground presence in Asia,” Asialink Business CEO, Mukund Narayanamurti, said.
CBA head of Asian business banking, Jonathan Yeung said, “The business opportunities that exist in Asia are well known and well versed. But while many Australians businesses are including Asia as part of their strategy, we know that majority of these organisations don’t optimise their operations to maximise revenue streams.
“Through our research, we’ve charted a practical roadmap for Australian businesses to build the specific skills, knowledge and networks they need to succeed and capitalise on the opportunities in the region.
“We are excited to launch the Activating Asia report, the latest report in our Asia Capability research partnership with Asialink Business,” Mr Yeung said.
Drawing on unique survey of businesses across diverse sectors of the economy, and backed by practical case studies and interviews, Activating Asia reveals three key lessons for succeeding in Asia’s competitive markets. These include having staff with language or in-country experience; keeping up with fast-changing customer preferences; and being on the ground.
The survey found that 33% of Australian businesses that earn more than 5% of their revenues from Asia undertook in-country visits at least once a month – more than double that of businesses earning less than 5% of revenues from Asian markets.
Professional services businesses feature in the top performers — of those businesses that generate more than 50% of their revenue from Asia, 26% are professional services firms, followed closely by private education and training organisations at 25%.
The study also reveals that overall business sentiment towards Asia is positive. Despite the ongoing China-US trade tensions, China continues as the most attractive market for Australian businesses.
Nearly half of participating businesses (44%) report an active interest or existing presence in China. Australian businesses also have significant interest in the opportunities presented by the ten ASEAN economies in south-east Asia collectively ranking as the second most popular market for Australian organisations.