Australian Business Growth Index: Aussie SMEs continue growing globally
Despite rising inflation, disrupted supply chains and challenging economic conditions, Australian small businesses remain ambitious, with their sights set on international expansion.
Australia is fast becoming a launchpad for successful startups and SMEs (small-to-medium-enterprises) making big waves on the global stage.
However, the last few years have brought a myriad of challenges for the business community. Lockdowns, uncertainty, inflation, and supply-chain disruption have pushed Australia’s 2.4 million small businesses to evolve, innovate, and look beyond the local market for increased growth potential.
That's the overwhelming message from Airwallex’s inaugural Australian Business Growth Index, which surveyed hundreds of Aussie SMEs to gain insight into their challenges, expansion plans, and what the future could look like post-pandemic.
The digital economy, alongside rapid tech adoption and the rise of hybrid working, have helped to reduce the barrier for entry abroad. As a result, businesses with global operations are seeing more opportunities for growth and commercial success.
Our Growth Index found a third of SMEs are already operating internationally, such as Aussie retailer Orbitkey who are making inroads across the U.S. and Asia, and Melbourne-founded Deliciou who are now open for business across multiple markets including the UK and Europe.
Our research found this is set to become the new norm, with the majority of Aussie SMEs saying they plan to be operational outside of Australia in the next five years.
The Growth Index found 96% of SMEs who are already operating overseas, and 99% of those planning to do so in the next twelve months, recorded growth in the last year.
Looking ahead, Aussie businesses are making moves to bolster their position and weather the current economic challenges. The Australian Business Growth Index highlights how international expansion is being used as a strategy to remain resilient and viable by tapping into new markets and widening the pool of potential customers.
So, what are the findings?
Aussie SMEs are still growing globally
Despite sustained and varied economic challenges in the past year, 92% of Aussies SMEs told us they grew in the past 12 months.
A third (34%) of Aussie SMEs say their business is currently operating outside of Australia. This is set to double in the next five years, as more than two thirds of SMEs plan to be operational outside of Australia by 2027.
Southeast Asia is the top overseas destination
For SMEs trading overseas, the region where they have seen the biggest growth in sales and revenue is Southeast Asia.
These markets also offer the most attractive commercial opportunities for Aussie businesses. A quarter (26%) of SMEs operating or planning to operate overseas identify Southeast Asia as the most lucrative in the year ahead.
The U.S. followed closely behind Southeast Asia, with 25% of businesses with an international footprint or ambition calling the States out as the next most attractive market in the near future, surpassing China (18%) and Europe/UK (15%).
Those who have made the leap abroad are reaping the rewards
For Australian businesses already operating in international markets, the move has been lucrative. Moving overseas has unlocked access to new customer segments and broadened their overall market share.
Fintech is the future
From startups to large-scale enterprises, businesses are now benefitting from modern and innovative technologies. A third of Aussies SMEs (35%) have already fully transitioned to digital and fintech solutions for their banking needs. These solutions not only unlock new revenue streams and business growth opportunities, but also help senior leaders achieve more efficient business operations.
About the Airwallex Australian Business Growth Index
The Airwallex Australian Business Growth Index is the first edition of an annual series that takes the pulse of the Australian small business ecosystem. The Index explores a range of opportunities and challenges facing the SME sector, including growth, funding, staffing and technological innovation. Airwallex surveyed 202 small businesses in Australia (20-199 employees) in late May 2022 across a range of industries, locations and annual turnovers.