Australian businesses are more aware than ever of the growth opportunities offered by Asia, but most are struggling to convert these opportunities into revenue outcomes. Groundbreaking research launched today by Asialink Business, sponsored by Commonwealth Bank of Australia, reveals that while awareness and interest in Asian markets — including China — is at a high, many businesses are struggling to activate the opportunities to deliver financial returns.
“Asia’s emerging middle class continue to offer huge growth potential for Australian businesses of all sizes. By 2030, emerging Asian economies will have middleclass markets that are more than AUD$20 trillion bigger than they are today — yet for Australian businesses, while Asia is now firmly on their radar, many are not activating these opportunities, especially small and medium enterprises.
“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, says.
Released today, the Activating Asia report and Asialink Business Commonwealth Bank of Australia survey results find that while 80% of Australian businesses include Asia to some extent in their corporate strategy, most are failing to generate significant revenue from these markets: More than half of the organisations (54.7%) surveyed generate less than 5% of their revenue from Asia.
CBA Head of Asian Business Banking, Jonathan Yeung says: “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.”
Drawing on a 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:
- Asia capable staff are critical: Businesses that succeed in the region are more likely to actively seek staff with language or in-country experience. For example, businesses that always mention Asian language capabilities or Asia experience in job ads earn, on average, more than 5 times the revenue from Asia than those that never mention these skills.
- Keep up with customers’ fast changing preferences: Businesses that tailor and adjust their product or service and marketing earn, on average, more than 8 times the revenue from Asian markets than those that sell the same offering using the same marketing.
- Technology is a complement, not a substitute for being on the ground 33 per cent of Australian businesses that earn more than 5 per cent of their revenues from Asia undertook in-country visits at least once a month – more than double that of businesses earning less than 5 per cent 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 Southeast Asia collectively ranking as the second most popular market for Australian organisations.
To actualise the diverse opportunities across the region, Activating Asia calls on Australian businesses to invest in building Asia capabilities and embed an Asia capable mindset into long-term business planning.
