Market of the Month – Australia
Best Prospects for U.S. Exporters
When 16 U.S. naval ships arrived in Australia in 1908, more than 80,000 people turned out to greet the Great White Fleet. In the 100 years since, Australians have embraced U.S. products and services with similar enthusiasm. The result is a network of agents and distributors handling U.S. products and services – a network that enjoys a reputation in Australia for quality, market appeal and after-sales service. Despite a population of 21 million, Australia ranks as the 15th-largest market for U.S. merchandise exports, creating an annual trade surplus of $10 billion for the United States.
Chart Showing the US Trade Surplus with Australia
Australia has one of the world’s best financial, legal and political systems; a world-class infrastructure; advanced communications networks; modern land, sea and air connections; and strong intellectual property protection. It also has a high per capita income, an advanced industrial base and a 16-year growth record – all of which generate substantial purchasing power. The recent Australia–U.S. Free Trade Agreement, coupled with the strength of the Australian currency, has created unlimited opportunities in this resilient economy.
Map of Australia
 | Gross Domestic Product: $770 billion |
| Gross Domestic Product Growth Rate: 2.9% |
| Gross Domestic Product Per Capita: $37,500 (2007 estimate) |
| Gross Domestic Income Growth Rate: 4.8% |
| Gross Domestic Product by Sector: |
- Agriculture: 4%
- Industry: 26%
- Services: 70%
| Major Exports: coal, iron ore, gold, meat, wool, alumina, wheat, machinery and transport equipment |
| Exporting to: Japan, China, South Korea, the United States, India, New Zealand and the United Kingdom |
| Major Imports: machinery and transport equipment; computers and office machines; telecommunication equipment and parts; and crude oil and petroleum products |
| Importing From: China, the United States, Japan, Singapore and Germany |
| Imports From the United States: $19.2 billion (2007) |
| Exports to the United States: $8.6 billion (2007) |
| Total Area: 2,957,488 square miles |
| Government: Westminster-style. Australia is a federation of six states and three self-governing territories with their own constitutions, parliaments, governments and laws. The national or central government is termed the federal government, or the Commonwealth. |
Best Prospects for U.S. Exporters
Australia has few barriers to entry, a familiar legal and corporate framework, sophisticated consumer and industrial demand, and a straightforward, English-speaking, business culture. The Australia–U.S. Free Trade Agreement enhances the long and successful trading relationship by eliminating tariffs on almost all manufactured and agricultural goods. We at the U.S. Commercial Service in Australia believe 2008 will be an excellent time for American companies with innovative products and technologies to develop an entry strategy for the Australian market or to re-examine previous business plans for this market.
Current opportunities exist in tourism, oil and gas, renewable energy, environmental technologies and medical device sectors.
Infrastructure projects, both public and private, are likely to offer opportunities to American companies ranging across engineering, building products, construction machinery and a host of ancillary industries.
The services sectors, such as franchising, consulting, software, IT and engineering, have experienced higher growth than traditional manufacturing sectors in recent years, creating opportunities for experienced U.S. companies.
Our 2008 Country Commercial Guide identifies the following best prospects for 2008:
| Aircraft and Parts |
| Automotive Parts and Accessories |
| Construction Machinery |
| Cosmetics |
| Franchising |
| Information Technology Services |
| Medical Equipment |
| Mining Equipment |
| Oil and Gas Equipment |
| Recreational Boating |
| Renewable Energy Equipment |
| Software |
| Travel and Tourism |
| Water Resources Equipment |
Sydney Opera House Near the Business District
1. Do your homework
Successful market entry strategies for Australia have three common elements: understanding the market, selecting the optimal partner, and providing ongoing marketing support to that partner. A common language and familiar business framework may lead Americans to overlook Australia’s cultural and market differences. This is a dangerous trap, as it is vital to first gain an understanding of the Australian context for a product or service. This context includes its competitors, standards, regulations, sales channels and applications.
2. Choose a sales method
Success in the Australian market also requires the establishment of a local sales presence. For many American exporters, this means appointing an agent or distributor. That includes negotiating the arrangement, with factors such as rights to certain states in Australia, the entire country or New Zealand as well. An increasing number of businesses and investors also see Australia as a secure platform from which to serve third markets in Asia.
Local Trade Show
3. Understand the market
Australia is the size of the continental United States. It is relatively distant, however, from many of its trading partners. Its sheer size prompts Australian firms to stress the importance of local support and service. Therefore, American companies should plan to visit Australia to meet prospective partners, to demonstrate ongoing support (such as joining the partner to call on a major client), or to participate in trade shows.
4. Be sure of your ground
Most of the criteria American firms use to select agents or distributors in the United States are applicable to Australia, with expectations adjusted to the scale of the market. Performing due diligence is just as important in Australia as it is in the United States, and the U.S. Commercial Service offers resources to assist in that work.
In 2007, U.S. Commercial Service Australia recorded 178 success stories for U.S. exporters across a range of sectors. Following are several recent examples:
Watchguard Video appointed an Australian distributor for its in-car video recorders for police vehicles, after signing up for a Gold Key Matching Service. “They (the local company) are very well engaged in sales activities, and we expect for the relationship to be very strong. Thank you for your help in getting us to this point."
Melbourne - Famous for its Trams
Patterson Fan manufactures premium, multipurpose, high-velocity fans with industrial and commercial applications. Patterson Fan appointed a local distributor in February 2008, following a Gold Key Matching Service. "I thank you very much for the GREAT job in arranging all those business meetings. I have done many Gold Keys in the past five years and I must say that this one was one of the top two in all aspects. ... [W]ill once again thank you for doing such a great job."
www.buyusa.gov/australia/en/eventsinoz.html
Franchising and Business Opportunities Expo
May 5–6, 2008, Royal Adelaide Show Grounds
May 17–18, 2008, Perth Convention Exhibition Centre
September 12–14, 2008, Brisbane Convention & Exhibition Centre
October 10–12, 2008, Melbourne Exhibition and Convention Centre
CeBIT Australia, 2008
May 20–22, 2008 Sydney Convention & Exhibition Centre
Sanctuary Cove International Boat Show
May 22–25, 2008
Sanctuary Cove Queensland
AUTO EQUIP EXPO 2008
August 8–10, 2008
Sydney Convention & Exhibition Centre
AUSBIOTECH 2008
October 26–29, 2008
Melbourne Conference Center
AOG 2009 / AustralAsian Oil & Gas
February 17–19, 2009
Perth Convention Exhibition Centre
Australian International Airshow & Defense Exposition
March 24–29, 2009
Avalon Airport, Victoria
(U.S. Pavilion)
David J. Murphy
Senior Commercial Officer
U.S. Commercial Service (SYD)
PSC 280, Unit 11024
APO AP 96554-0002
Tel: +61 2 9373-9202
Fax: +61 2 9221-0573
E-Mail: Sydney.Office.Box@mail.doc.gov