Australian businesses looking to expand their net should consider China. As a large market, not too far away and with low production costs, it can be the perfect next step for many organisations.
Let’s look at the details.
1) It’s cheaper than a merger or acquisition
Globally speaking, Australia is a small market with a population of around 25 million. Improving your market share is hard, doubling it can be almost impossible. Your best option is a merger or acquisition – taking over or sharing someone else’s portion.
Expanding your horizons to China is an alternative. Not only is it cheaper than a merger or acquisition, there’s huge demand. Of course, there are some costs, but China provides better potential for real growth.
2) You diversify your business risk
Heading to China means you’re dealing with opposite seasons which allows you to compensate for seasonal demand.
Let’s take the example of a swimwear company. In winter, it’s pretty chilly in the South East of Australia. Swimwear isn’t in demand. At the same time in China, temperatures are increasing and consumers need swimwear. By expanding to China you maintain high sales through seasonal lows.
Additionally, by adding a secondary market to your portfolio, you protect your business against a poor economy in your domestic sector. If Australia is struggling, the Chinese market will likely still have spending power and demand for your business.