The pandemic and geopolitics have complicated Australian firm’s expansion plans in Asia. China, long a source of demand across just about every industry and product category, has also become a source of risk. What can Australian firms do in Asia? Diversify. The rest of Asia should not be overlooked.
Japan and Korea are among the largest wealthy markets in Asia. Consumers in these countries are continuing their switch to healthier and high-quality options with an increased openness to new, novel, and foreign brands. South Korea’s wine market is set to grow by over 6% annually through 2025, a trend likely to accelerate as both preference for and familiarity with wine increases.
Asia’s global cities—Singapore, Hong Kong, and Macau—punch far above their weight in economic and trade terms. Singaporeans are the wealthiest consumers in Asia. Rules are clear, consumers keen, and growth strong and sustained. Demand for coffee in Singapore alone continues to increase by 5-7% annually. Growth in Hong Kong’s food and beverage sector is set to grow by nearly 11% annually through 2025.
Taiwan, a cosmopolitan, wealthy, and open market is busy negotiating new trade deals and making itself and ever more welcoming place to export to and do business in. Australia and Taiwan recently inked a new cooperation agreement on agricultural goods—including investment and technology exchanges—between the two. More deals covering more industries and products are sure to follow. Australian brands entering now are pushing on an open door and will reap the rewards of getting in early; within a few years the push is likely to become a stampede.
Malaysia—larger than Taiwan and with incomes similar to those in China—benefits from its proximity to Singapore next door, English being widely spoken, and fast-growing incomes. Beer consumption alone will increase by over 40% over the next 5 years, meat and dairy by over 30%.
Asia’s third most populous country, Indonesia, is similarly fast-growing with consumers looking to upgrade their lifestyle with modern conveniences, new foods, quality beverages and much else that Australia offers in spades.
Across these and other markets in Asia consumer incomes are rising and demand for much of what Australian brands can produce best—high quality meat, coffee, alcohol, juices, soft drinks, healthy and organic products and much more.
China will remain a large source of demand in Asia and sales for Australian companies, yet the case for diversification—and the untapped opportunities on offer—is clear. Diversifying into other promising markets in Asia will allow Australia Inc to benefit from this while reducing risks, taking advantage of otherwise missed opportunities, and generating balanced and sustainable growth in the region.