Throughout 2017, we at MAI Capital have been able to see some of the best that Australian and Chinese business has to offer, and have been regularly posting on our site about developments and events that occur within the space that we operate in. Coming to the end of 2017, we thought that it would be a good idea to take the opportunity to highlight some of the key themes that we have identified this year.
Positive Signs Locally
There have been some strong signs from the Australian market over the course of this year.Today, there are more resources available to Australian early stage companies than there has ever been, with this pool of resources only expected to increase going forward.
Some of the events that we have had the pleasure to attend this year have really hammered this home, including events put on by AusBiotech, Muru-D, York Butter Factory, UniMelb MAP, River City Labs and more.
It is good for Australian companies that there are so many of these resources, facilities and events accessible for early stage companies and it was encouraging to note that several of the key themes we have identified as prerequisites for success in the broader market were apparent in a few of the more successful companies selected to showcase themselves across these events.
We have said this before, but we believe that Australia’s strong local environment is largely conductive to innovation. Party due to relatively small market size however, international expansion is the key to turning Australian innovation into large scale commercial successes. This requires Australian businesses to keep tabs on what is happening both in their target markets and in countries that are developing similar products.
And while it is great to see all this positive activity coming from the local market, it is important to remember that we are not the only country in the world that is pushing hard on innovation and growth of early stage companies. Through our travels this year, we have seen some strong innovation activity first hand in countries like Israel, Japan and China, all of which showcased an ability to foster high levels of innovation, really highlighting that this is a global movement.
Strong Chinese Demand
While we have seen strong signs of innovation in other countries, this year has also shown us that Australia has a natural advantage over other countries when selling to China.
Australia and China’s strong relationship offers the best prospects to maximize shared economic interests for businesses and individuals located in both countries and our Free Trade Agreement is something that very few developed western countries have with China.
To demonstrate this, one needs to only look at 2017 Singles Day. This year’s Singles Day’s affirmed Australia’s position as a dominant player in a huge market, being one of the top international sellers to Chinese consumers during this period. Many Australian companies were able to capture the strong Chinese demand for Australian products and achieved record sales figures.
This large number of sales is fundamentally driven by heavy competition and innovation amongst sales platforms. The high levels of mobile penetration in China mean that mobile sales are the norm and so large platforms such as Alibaba and Tmall create unique shopping experiences for their customers that creates a huge demand for quality products.
Being able to successfully tap into this demand has the potential to fuel entire Australian industries into a level of growth that is much higher that what we are used to seeing. From our perspective, it is not hard to see this level of activity occurring in multiple Australian sectors going forward.
Looking Forward to 2018
Coming into 2018, we see the activity in both the Australian and Chinese markets and the opportunities for Australian businesses to meet the demands of China continuing to increase. We are excited to see how things unfold and are looking forward to providing value to those we work with in capturing these opportunities. We will continue to share our insights and analysis and are actively reviewing businesses looking to tackle the challenge of scaling into China.
Enjoy your holidays!