Exporting To Australia Getting it right Scott Strain

Exporting To Australia Getting it right! Scott Strain Director for Trade at UKTI Australia & New Zealand UNCLASSIFIED

What we will be covering in today’s Webinar • A very brief overview of Australia & UK-Australia trade • What to expect • Ways to market • Typical distribution costs & quoting & getting paid • Preparing for success & visiting the market • Next steps and how UKTI can help • Overview of customs & importation – Diane Tipping • Q&A

What we will not be covering today • The various stages of exporting. If you are new to exporting go to www. opentoexport. com • A sector by sector breakdown of the Australian economy. Go to Slideshare. net and look for our “Doing Business in Australia & New Zealand” Webinar slides.

Why Australia? • You’ll feel at home immediately: – Over 1, 000 UK companies and more Brits than in any other country – Very similar business, legal and regulatory culture • Best performing OECD country economically, with good growth prospects • Strong Australian & NZ dollar making UK goods and services more affordable • Closely linked to fast growing Asia-Pacific nations • Massive opportunities for UK companies in oil and gas, health, ports, infrastructure, ICT, education, low carbon, financial and business services • Free trade agreements with China, the ASEAN nations and Singapore Type your title and date here 00/00/0000 UNCLASSIFIED 4

Australia & NZ - an economic snapshot NZ Australia UK Population 4. 4 million 22. 5 million 62 million Global GDP ranking 55 th 13 th 7 th GDP growth est. 2012 2. 3% 3% 0. 6% GDP per capita ($US 2011) $36, 648 $40, 800 $36, 600 Ease of doing business (World Bank 2011) 3 rd 15 th 7 th Unemployment (Sept 2012) 6. 5% 5. 1% 8. 1% Land mass – sq kms 263, 310 7 692 000 242 000 Type your title and date here 00/00/0000 UNCLASSIFIED 5

Australia – A brief geographical overview Type your title and date here 00/00/0000 UNCLASSIFIED 6

Australia- States & Territories UNCLASSIFIED

Another perspective

Top 7 Cities Where the market is. . . Population in Thousands UNCLASSIFIED

UK/Australia trade links • UK exports to Australia grew by over 60% from 2007 - 2011 (to more than £ 10 billion) • 7 th biggest market for services exports and 18 th largest for goods • UK is 2 nd biggest foreign direct investor in Australia Services 5, 500 5, 000 4, 500 4, 000 3, 500 3, 000 2, 500 2, 000 Type your title and date here 00/00/0000 UNCLASSIFIED Goods 6, 000 Millions • UK’s overall exports contracted first half of 2012, to Australia rose UK Exports to Australia: 2007 2008 2009 2010 2011 10

Australia: what to expect • A sophisticated multicultural market • Pacific area - fast growing - self-sufficient • Regional vs. National factors • Traditional sources of supply have changed • New ways of doing business • E Commerce • GST UNCLASSIFIED

What to expect from Australian importers • Value for money over price • Cautious about changing suppliers • Australian products preferred but they are open to international goods & services • Go with your best price – avoid haggling too much • Expect familiarity and a direct approach • Rigid enforcement of standards and practices – get it right first time!

Import Channels & Distribution • Importers & Wholesalers: usually small & specialist. Few general importers, • Commission Agents/Fulfilment Houses: few and far between • Manufacturers & End users • Retailers: usually source locally & use importers for smaller orders • Internet retail: the fastest growing market

Ways into the Market Combined Agent & Distributor Network State

Ways into the Market Industrial Products The Licensing Agreement

Ways into the Market The Subsidiary Approximately 2000 UK Subsidiaries in Australia

Typical Distribution Channel costs in Retail • Overseas buying agents/commission agents 3 -6% FOB • Importers & Wholesalers selling volume consumer goods 40 -80% on landed duty paid goods • Discount Department Stores 35 -40% of the selling price • Department Stores 40 -75% of the selling price • Small Retail 50 -100% of the selling price • Supermarket Chains 15 -35%

Quoting & Getting Paid • US dollar the most common currency • Most exporters expect Free On Board or Free Carrier quotations but; • Those importing commodities often prefer Cost & Freight terms • Most Australian importers take out their own insurance so don’t expect Cost Insurance and Freight or Cost Insurance Paid terms • Remember that any customs duties will be based upon the FOB price • Offer your best price, don’t haggle too much. • Letter of Credit common place • Remember to factor in delivery times to tour terms of payment

Key Elements for Success Set medium / long term strategies Set reasonable marketing plans and sales targets and review them regularly Committed distributor - right for your product Committed supplier Complete openness - pricing / margins Service is paramount Get involved Allow sufficient time UNCLASSIFIED

Key Lessons from the Market Visit • Think Australian - NOT POM, sell to Australians for volume • Add value vs. local offering • Support distributor • Price-points (understand margins and currency) • Need to innovate • Create volume / increase rate of sale to win both trade and distributor support UNCLASSIFIED

How can UKTI help you? • Provide grants to help you research the market through our Export Market Research Scheme (EMRS) • Conduct market research & contact finding for you through our Overseas Market Information Service (OMIS) • Help you attend Exhibitions through our Tradeshow Access Programme (TAP) Free. Digital. Photos. net • Help you successfully visit the market as part of a Trade Mission through our Visit Scheme (MVS) Type your title and date here 00/00/0000 UNCLASSIFIED 21

Next Steps • If you are interested in learning more about opportunities here then get in touch with your local UKTI International Trade Adviser. You can find your local ITA through our website www. ukti. gov. uk • or contact myself at Scott. Strain@fco. gov. uk and I will do what I can to help. Free. Digital. Photos. net Type your title and date here 00/00/0000 UNCLASSIFIED 22