In a resounding response to the mounting economic challenges plaguing Australia’s business landscape, a recent study has revealed that a staggering 51% of Australian businesses are gearing up to expand their horizons beyond domestic borders within the next year.
This seismic shift in strategy, driven by the relentless surge in operating costs, is poised to reshape the business landscape as companies actively explore overseas markets for sourcing suppliers and attracting customers.
The study conducted by Money Transfer Comparison has unveiled a significant shift in the strategies of Australian businesses as they grapple with the challenges of operating in an increasingly costly environment.
In the wake of rising operating expenses, driven by factors such as inflation and supply chain disruptions, more than half of Australian businesses (51%) are considering expanding their horizons beyond domestic borders within the next 12 months.
The economic climate in Australia has become notably challenging, with a staggering 85,686 businesses permanently closing their doors between March and June 2023, highlighting the urgent need for adaptation and resilience among the remaining enterprises. The fiercely competitive landscape and mounting costs have compelled Small and Medium-sized Enterprises (SMEs) to explore international markets for resources, customers, and clients, not merely as a strategy for growth but as a means of survival.
The research, which encompassed a survey of 202 independent business owners and decision-makers across a diverse spectrum of SMEs, was commissioned by Money Transfer Comparison. A detailed breakdown of the survey results, including insights specific to various business sizes and regions, can be accessed here:
One of the standout findings from the study is that more than half of all Australian businesses are considering sourcing suppliers or customers from overseas markets. Faced with mounting operational costs, one-third of businesses have already begun trimming non-essential expenditures and implementing cost-saving measures. In response to the escalating cost of doing business in Australia, 51 percent of respondents are prepared to explore international resources and clientele within the coming year. Among these respondents, 33 percent expressed a willingness to opt for offshore suppliers over local ones, while 18 percent are actively looking to tap into international customer bases.
Russell Gous, a spokesperson for Money Transfer Comparison, highlights the advantages of outsourcing in this context, emphasizing the potential for savings on labor and supplier costs, accessing less competitive markets, and expanding a business’s customer reach.
The study also reveals regional disparities in these shifting business strategies. West Australian businesses exhibit the highest propensity (68%) to explore overseas resources and customers in the next 12 months, whereas Queensland businesses display the lowest inclination (60%) toward transitioning from local to international suppliers and customers.
When considering business size across the SME spectrum, medium-sized enterprises stand out, with 60 percent actively considering offshore options. In contrast, only a quarter of micro-businesses (25%) are contemplating similar measures.
Russell Gous underscores the significance of these findings, noting that Australian business owners are demonstrating adaptability in the face of rapidly changing economic conditions. Outsourcing emerges as a viable solution, whether in the short or long term, enabling businesses to navigate the challenges posed by rising costs and addressing skills shortages.
The study also delves into the specific sectors that Australian businesses are most inclined to outsource. In response to the question of which categories of products and services they would consider sourcing more affordably from overseas, tech-related products and services take the lead. Software (38%) and IT hardware (31%) are at the forefront, with a substantial proportion of businesses also considering outsourcing for manufacturing (30%), labor (29%), shipping and logistics (27%), and research (15%).
Russell concludes: “The data provides a comprehensive picture of how Australian SMEs will lean on offshore outsourcing to mitigate some local challenges. The significant trend points towards the need for outsourcing within the next 12 months, and the preference towards the tech industry reflects Australia’s shortage of skills in this area.”
The full survey results, including breakdowns across different business sizes and States, can be found here: https://moneytransfercomparison.com/australian-business-supplies-overseas/
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