Companies don’t make most of Asia

Australian companies are aware of business opportunities in Asia, but are holding back on taking advantage of them.

China continues to be the most attractive market in Asia for Australian businesses. Picture: iStock

Australian companies are aware of the business opportunities in Asia, but are holding back on taking the right steps to take advantage of them, according to a new survey by Asialink Business and the Commonwealth Bank.

The survey shows that while more than 80 per cent of Australian businesses have Asia on their radar, most are failing to generate significant revenue from the region’s markets.

“The business opportunities that exist in Asia are well known,” the Commonwealth Bank’s head of Asian business banking, Jonathan Yeung, said on the release of the report.

“But while many Australian businesses are including Asia as part of their strategy, we know that the majority of those organisations don’t optimise their operations to maximise revenue streams,” he said.

Asialink’s new Activating Asia report and the Asialink Business/CBA survey show that while 80 per cent of Australian businesses included Asia to some extent in their corporate strategy, more than half — about 54.7 per cent of those surveyed — generated less than 5 per cent of their revenue from Asia.

“Asia’s emerging middle class continue to offer huge growth potential for Australian businesses of all sizes,” Asialink Business chief executive Mukund Narayanamurti said.

“By 2030, emerging Asian economies will have middle class markets that are more than $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 survey polled 130 people from 94 companies on their engagement with Asia.

Mr Narayanamurti said the survey showed that companies that were doing well in Asia all shared 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.

Mr Yeung said it was critical for companies wanting to do ­business in Asia to be actively looking for staff with Asian language ability and experience in the region.

“Businesses which always mention Asian language capabilities or experience in their job ads earn on average five times the revenue in Asia than those that never mention these skills,” he said.

He said businesses that tailored or adjusted their product or service to the local Asian market earned on average more than eight times the revenue from Asian markets than those that sold the same product they made for the Australian market with the same marketing.

The survey also showed that technology was not a substitute for being on the ground for those wanting to do business in Asia.

It showed that 33 per cent of Australian businesses that earned more than 5 per cent of their revenues from Asia visited the region at least once a month.

This was more than double the rate of visits for those companies that earned less than 5 per cent of their revenues from Asian markets.

The survey showed that professional service businesses were among the top performers in Australian businesses in Asia.

Some 26 per cent of companies generating more than 50 per cent of their revenue in Asia were professional service firms, with private education and training firms making up another 25 per cent of the total.

The study shows that overall, Australian business sentiment towards Asia is positive.

Despite the China-US trade tensions, China continues to be the most attractive market in Asia for Australian businesses.

More than 40 per cent of the companies surveyed reported an active interest or an existing presence in China.