Build the right market entry strategy into Australia for your business and identify key opportunities for your commercial success in this thriving market.
Australia has a competitive advantage in producing and processing primary goods thanks to an abundance of natural resources, combined with strong transportation and telecommunications infrastructure.
The Index of Economic Freedom shows that Australia is one of the easiest places to do business and export products and services in the world. The political and regulatory framework of Australia contributes to this attractive business climate. Worldwide, it is considered as one of the most transparent and well-regulated business environments.
The main export products in Australia are cotton, wool, rice, and meat. Additionally, Australia is an international source of minerals and mining is one of the most significant industries in the country. Australia’s largest export market is Japan, followed by China, the United States, the Republic of Korea and New Zealand.
Get started with your Australian business expansion by first developing a strong market entry strategy.
How to develop your market entry strategy in Australia
The market in Australia has a lot to offer foreign entrepreneurs. If you plan your Australian market entry strategy carefully, you can set yourself up for long-term success.
To validate the opportunity and profitability of your product or service, you must conduct thorough market research. This research should include primary and secondary research and evaluation. This means collecting information through various means, including (but not limited to):
- Online research
- Going to Australia in person and seeking firsthand consumer and distributor perspectives
- Making business contacts in the area
- Investigating your competition
- Attending relevant trade shows.
You must gain an understanding of the cultural, social, and political landscapes when developing your market entry strategy in Australia.
If you are from a country with a different language or cultural norms than Australia, you should think about how you will communicate with your key contacts and integrate with local commercial and consumer expectations.
Explore the norms and behaviours of Australian industries and consumers that could have an effect on your product and on how you produce and deliver it. To comply with local regulations, you will need to understand your legal obligations, which can be very detailed for certain industries (such as health). It is wise to learn about distribution channels too.
It’s wise to engage with a consulting company or market entry strategist in Australian to conduct this research and gain local insight into market behaviour.
Identify consumer markets
Identify your key consumer markets based on your preliminary research. Define the characteristics of your ideal customer profile, including their tastes and preferences, demographic, and location within Australia.
This information will dictate how your company can make the biggest ‘splash’ when entering the Australian market, and will be key to getting the most value out of your ongoing investment. The ideal customer profile may not be what you initially expected; make sure to seek guidance from a trusted and knowledgeable market entry specialist based out of Australia to avoid any unexpected hurdles to accessing your customer base further down the line.
Connect with distributors and suppliers
Identify your potential distributors and suppliers. When expanding your business to Australia you will need to find distributors and suppliers who can provide you with the business’ needs. This process may require you or your representative in Australia to meet with these distributors. Where possible, you can engage with someone on the ground to support this activity if you are not yet based in the country.
You can find commercial representatives from third-parties, or work through a professional employment organization to hire a sales executive in Australia without having to formally incorporate your company in Australia.
Market validation: Verify your research findings
To verify your research, you need to engage with professional legal, accounting, and market entry specialists. These specialists can give you information about what you need to do to comply with the law to eventually start your company in Australia.
Registering your company vs. hiring staff through PEO
Once you have established and validated your Australian market entry strategy, you can then formally begin operations with a clear plan. Companies have two main options to enter the Australian market and begin operations:
- Incorporate a company in Australia
- Hire executive staff through a Professional Employer Organization (PEO).
You can choose to formally incorporate your company in the country. You’ll need the support of your legal representative – also known as a Resident Director – to do this, and ensure your company complies with all local legal and tax regulations.
The legal entity you choose to register your company as will have long-term ramifications for the operations of the company. Popular entities in Australia include a branch, partnership, trust, or company. Consult with an adviser who can identify which structure will work best for your business and future goals, and your governance needs within the business.
Through this method, you establish an immediate formal presence as a company in the country. The initial capital investment in this method to market entry in Australia is higher than hiring staff. However, your company may have a more immediate impact on the market and may find it easier to develop the brand with an established branch office.
Hire staff from abroad through PEO
A Professional Employer Organization (PEO) hires staff on behalf of other companies under what is called a ‘co-employment model.’ With this model, the PEO has authority to hire staff in Australia as the ‘Employer of Record’ in the local government’s eyes.
The hiring company can then operate with a lighter footprint in Australia, and lower initial start-up costs. Sales staff hired for the expanding company can set about meeting potential customers, distributors and clients, and work to promote the brand. The company can then build confidence and further validation of its prospects for success in Australia and decide later to formally incorporate their company.
Choose a location
The location of a new or expanding business can make the difference between a success or failure. This is especially applicable for businesses with a storefront and a lot of local employees. Using your market entry research, choose a strategic location for your company in Australia.
Set up and manage your accounting and reporting
Accounting and reporting standards in Australia differ from other countries. To ensure the ongoing success and longevity of your business, it is wise to work with the correct accounting and reporting standards from the beginning. When your accounting system is compatible with Australian standards, it will be easier to submit, which will eventually save yourself a lot of time and money. Be aware that your requirements to comply with these regulations differ depending on your market entry method of incorporation or engaging with a PEO.
Depending on your immediate needs and market entry method, you may also need to find an insurance plan that minimizes your risks and protects any applicable assets once you enter the market in Australia.
Australia possesses many attractive characteristics for an expanding multinational or the foreign entrepreneur. An open business environment and supportive legal framework enables expanding businesses to achieve success.
In order to build a comprehensive market entry strategy in Australia, engage with market entry strategists and other specialists to ensure your company starts off on the right foot and with a clear direction and plan towards integration. Be aware of your obligations to comply with all fiscal, legal, regulatory and accounting regulations.