Aussies turn to China market
SMALL businesses across Australia are turning to the Chinese market to stay afloat, despite political tensions and Covid-19 causing difficulty.
Businesses have been increasingly apprehensive about exporting to China as the country put in place export bans on products including barley, wine, seafood and forestry products in recent years amid frosty tensions.
However, Aromababy Natural Skincare chief executive Catherine Cervasio says her business would not have survived if she hadn’t expanded overseas.
That is despite her products being sold in Myer and other Australian stores nationally.
“We wouldn’t have survived because there just wasn’t enough understanding and market knowledge here and it wasn’t enough demand for natural organic baby skincare,” Ms Cervasio said.
“At the time (we expanded overseas), there were only 200,000 to 300,000 births per year in Australia, compared to China with millions … they’ve got such a big population and you only need a small percentage to get traction.”
A report on opportunities for Australian small and medium-sized enterprises in China by Asialink Business found that there was still a chance to crack into the world’s biggest market.
That’s despite domestic worries about trade sanctions and ever changing Covid-19 restrictions that can cause costs for businesses.
“Despite challenges, the opportunities for Australian SMEs selling goods to China cannot be ignored,” the report said. “China is the world’s largest and most dynamic consumer market.
“It leads the way in logistics and e-commerce innovation, and this will only accelerate.
“By 2030, China is expected to have around 400 million upper-middle and higher-income households seeking access to high-quality products and services.”
Asialink chief executive Leigh Howard said some businesses would be able to reap the benefits from China and other Asian countries, though they would have to weigh up the risk and rewards.
“The consumer markets are really substantial in size, we’re seeing countries with large populations, in the tens or hundreds of millions, even past a billion, becoming more affluent,” he said. “That does translate into opportunities.”
For Ms Cervasio, expanding overseas helped her business early on.
“We started exporting and that export market really helped us sustain our business when it was just a trickle of orders coming through from Australia,” she said.
However, those looking to expand should not expect it to be easy, with a lot required to be successful.
“It was a lot more challenging, exporting to a country like China, there are a lot of barriers,” she said.
“We’ve got cultural barriers, language barriers, regulatory barriers, then there’s duty and taxes and important things like that,” Ms Cervasio said.