Happy Independence Day Indonesia

At 10am on the 17th of August 1945 Indonesia proclaimed its independence.  Since then, every year on the 17th of August, Indonesians have celebrated this significant moment.

For weeks now Indonesians have been getting ready for this year’s Independence Day. They have been decorating buildings and shops with their national colours, and stocking up on celebratory food to share with family and friends. Some residents even paint their gates red and white to celebrate.

As close neighbours of Indonesia, Australia has a highly productive connection that covers political, commercial, environmental, cultural and social aspects with Indonesia. The relationship between Australia and Indonesia is a very important one for both countries.

The Department of Foreign Affairs and Trade estimates that Australia’s two-way trade with Indonesia rose 15 per cent to reach $14.8 billion in 2011. This makes Indonesia our 11th largest trade market*.

In January 2012 the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) entered into force for Indonesia. This is Australia’s most ambitious trade deal to date. It gives exporters many commercial benefits, including reduced tariffs and new opportunities to tap into global supply chains. For more information on AANZFTA visit the DFAT website.

Indonesia has a huge potential for trade. But there are differences in the IP protection schemes between the two countries.  Make sure your intellectual property (IP) is secure before you enter the Indonesian market. Visit IP Australia’s IP protection in Indonesia page to help you understand the IP issues you may face when exporting to Indonesia.


 *Source: Department of Foreign Affairs and Trade, 2012.

Europe’s internal turmoil yields external opportunities for Australian exporters

With continued bad press on the ‘Eurozone’ are there still market opportunities?  Of course there are precautions that must be taken when stepping into this high risk market. Several things must be considered to effectively assess possible Eurozone opportunities for Australian exporters. 

An internal analysis of the Eurozone appropriately measures the strengths and weaknesses of the market. Due to consistent financial turmoil there are distinct weaknesses presented throughout the European Union.  The weight of debt on European banks is severe while bank lending is at an all time low. Excessive government debt has developed a strain of uncertainty from a policy perspective and created pressure for improvements on regulation or even a possible Eurozone break up.  Constant chaos in the Eurozone has left business and consumer confidence at an all time low from a domestic standpoint. However, despite the Union’s weaknesses there is a sense of strength within European society. Citizens of the Eurozone are ready for change and quite keen for growth. With consistent disappointment from an internal perspective, society is looking elsewhere for financial stability.  

From an external perspective there are several opportunities that exist within the Eurozone. Because all internal help is currently being focused on the banking system, assistance in other regions of the market must come externally. This is where Australian exporters can potentially step in to take advantage of multiple opportunities. Buyouts, outsourcing, mergers and acquisitions are just a few of the opportunities presented in the Eurozone. High skilled European workers are willing to work for lower salaries due to the poor employment market. Companies on the verge of bankruptcy are willing to sellout at extreme costs. European businesses and consumers are now looking internationally for future growth although this can be a problem when they look towards Australia. 

The question is: Can Australian exporters provide the light at the end of the tunnel for the European debt crisis? Hear more on this topic and discussion of several other opportunities for Australian exporters at this year’s Economic Road show hosted by EFIC and the Export Council of Australia. For further details and registration click here

Join the discussion on Twitter #EconomicRoadshow2012

 Follow: @Aussieexport  & @EFIC_AU 

-Melissa Baker, International Project Co-Coordinator, Export Council of Australia 

Disclaimer: The subject matter in the article is for information purposes only. Please refer to the terms and conditions outlined on the blog for further details.

Opportunities override risk in the Middle East: exporting to emerging markets

According to economist Jim O’Neil, the next eleven countries to join the top emerging markets of the world [BRICs] include three countries in the Middle East, Iran, Pakistan and Turkey, making the region a potential hot spot for Australian exporters. Though there has been years of instability and conflict throughout the area, the Middle East is already on its way to becoming a global economic growth engine. 

Imports have increased every year since 2009 to the Middle East, according to the World Bank. The activity creating this level of growth in these nations is three-fold. First, there is the young, fast growing population, with high birth rates resulting in an expanding consumer market and increasing demand. Next, the Middle East is home to the most lucrative oil industry in the world causing a heavy production focus on oil and oil products and strong reliance on these exports. Finally, many Middle Eastern governments have budgeted to increase spending on infrastructure projects to boost the economy further. Government and society alike are agreeably developing a more stable and internationally involved economy.

This shift in focus opens up opportunities for Australian exporters. With a growing middle class opportunities lie in the retail sector. Consumers have more disposable income and are keen to spend more on convenience. The young population realizes the importance of education in today’s society presenting opportunities in the education services sector. Due to the heavy focus on the oil industry there is limited local production of horticulture in the Middle East. Australian agribusinesses should seek to supply the 80-90 percent imported food requirements in the region.  A large Muslim population in the Middle East gives Australian meat exporters a chance to provide to the substantial demand for Halal certified meats and animal products. The plan to build infrastructure networks has already created many opportunities for Australian service companies in management, design and construction. However, the various opportunities favorable for Australian exporter’s presents some challenges that must be known in order to achieve success in the Middle East. 

The Middle East is considered a high risk area and precautions must be considered when entering the market. Perhaps the biggest challenge to face when entering the market is the ongoing political risks including the war on terrorism mainly affecting the tourism and hospitality industries. In order to mitigate the risk, safety measures are a must and business managers should avoid political conversation.  Another discretion Australian exporters may face relate to trade barriers such as the requirements for precise regulation. In order to avoid problems, exporters must be well educated on procedures, documentation, rules and regulations in this region. Lastly, Australian exporters will experience strong competition from other nations including China and India. Exporters must understand the circumstances and formulate a general strategy for competitive advantage. 

Overall, the opportunities presented in the Middle Eastern market outweigh the potential challenges. The Export Council of Australian and EFIC will be hosting an Economic Road Show to discuss the potential opportunities in the Middle East and other emerging markets. To find out more or register for the event click here. 

Join the discussion on Twitter #EconomicRoadshow2012

Follow: @Aussieexport & @EFIC_AU

-Melissa Baker, International Project Co-Coordinator, Export Council of Australia 

Disclaimer: The subject matter in this article is for information purposes only. Please refer to the terms and conditions outlined on the blog for further details.

Hot Trends in the U.S. Housewares Market- Business Success in the US – Blog #7

Despite the economic downturn, North America remains one of the largest markets for ‘housewares’ in the world. According to the most recent estimates, the US and Canada accounted for 25% of global housewares retail sales totaling US$76.7 billion. So what are the latest trends in the market and what opportunities do these present for Australian exporters?

Dollars for Design
The primary, overarching trend in the U.S. housewares market is the move by the consumer toward high design. Whether this trend is manifested through more intelligent functionality or through more eye-appealing construction, the U.S. consumer has begun to appreciate the value that design adds to any product at any price. From $4,000 automatic coffee machines to cleverly designed baking tools, from ergonomic handles to new cooking methods such as induction or sous vide, from more functional cleaning tools to high-powered kitchen appliances, thoughtful design is being rewarded through increased purchases.

Sustainability
Although not as prominent as in years past, the U.S. consumer has not abandoned concerns for the environment and is voicing those concerns through purchasing behavior. Consumers look at country of origin, the uses of materials and the recyclability of the materials that make up the housewares products they purchase.

Constant Change
Another macro-trend is the move to more casual products for the home, somewhat prompted by the generational shifts underway with the aging of the Baby Boom cohort and the rise of Generation Y and the Millennials, who tend to value convenience and change the look of their living space more frequently. This has led to a much broader use of color in home products, to more unique shapes and sizes of kitchen appliances and eventually to greater replacement frequency of home goods by younger generations.

The Power of Celebrity
Perhaps the greatest change for home goods over the past five to 10 years is the emergence of the influence of professional chefs and home remodelers who have come to dominate the cable channels of U.S. television. Celebrity endorsements have become a major driver of business for cookware, cutlery, appliances, tabletop and other home categories. Guy Fieri, Paula Deen and Australia’s own Curtis Stone are leading the way.

Smart Shopping
The internet and digital technologies are having an increasing influence on the U.S. Housewares market. In a year where international retail markets floundered E-commerce displayed resilient growth, with sales increasing 16.1% to US$194.3 billion (in 2011) according to the US Department of Commerce. An explosion of digital innovations, most notably the emergence and rapid adoption of Smartphone and Tablet technology, has transformed the buyer seller relationship. Instead of getting defensive, some stores and brands are embracing the change by creating new personal touches that feature these new innovations in preference to more sales staff. In the future, QR codes and other innovative social shopping services will provide consumers with unparalleled choice. Retailers and vendors alike need to position themselves to take advantage of the huge growth opportunities this offers. 

All of these trends will be on show at the 2013 International Home + Housewares Show in Chicago, USA to be held 2 through 5 March. 60,000 housewares professionals from more than 100 countries will attend in search of the latest in products for homes around the world. More information is available at www.housewares.org.    


“Change is the only constant. Hanging on is the only sin.”- Denise McCluggage

Author:
Perry Reynolds
Vice President, Marketing & Trade Development
International Housewares Association

For more information on accessing the US housewares market or attending the International Home and Housewares Show please contact Ian Smith, CEO of Access USA on 0417020429 or ian@accessusa.com.au

Entering the emerging market as an exporter: Brazil

To weather tough economic conditions, successful exporters are shifting gears to take advantage of developing markets, like Brazil, rather than dwelling on the global financial crisis.  

Brazil has the world’s sixth largest economy while still developing which is why it may be considered the best of the BRICs. The country’s booming economy is said to be up fifth by the end of 2012 and is home to the second largest industrial sector in the Americas. Brazil is internationally involved in several world economic organizations including the World Trade Organisation, G20 and The Cairns Group. With the consistent efforts of the government to maintain economic stability and a 25.7% total trade increase in 2011, Brazil offers a higher opportunity for Australian exporters to do business. 

The benefits of the expanding economy spill over to anyone involved in business throughout the country. Brazilian businesses realize the favorable circumstances for advancement and are making efforts to expand beyond boarders though trade agreements and foreign investments.  Agriculture production carries much of the economic development; therefore Australian exporters should focus on supplying Brazilian farmer’s high demand of equipment, technology and fuel.  

Domestically contributing to Brazil’s growth is the emergence of a new middle class. The new middle class consists of high spending consumers looking for quality finished goods. These Brazilians have an appetite for name brand products and convenience and are willing to pay for it. Take the U.S. Company Wal-Mart for example, currently the third largest retailer in Brazil. Fed-Ex has benefited from the new consumer class as well, despite the country’s poor infrastructure, and has even bought out one of Brazil’s largest transportation and logistics companies. 

Caution: Under Development

Great opportunity exists within Brazil’s boarders for Australian business; however there are still some issues the country faces as a developing economy. The nation relies heavily on commodity exports, particularly from China. In order to maintain economic growth and achieve overall stability without any backlash, Brazil cannot depend on commodity exports.

Perhaps the biggest problem existing in Brazil is the poor infrastructure system. Multinationals have steered away from doing business due to this ongoing issue. Australian exporters have faced logistical and distribution problems due to backed up airports and clogged road ways. With plans to host the 2014 World Cup and 2016 Olympics, there is hope that provided funding for infrastructure projects will resolve this setback and equally create ease for exporting.

Inefficiency is another major issue when dealing with Brazilian business. Poor infrastructure contributes to the problem but business in Brazil is slow in general. It takes over 100 days to start up a business and costs can be outrageous. 

Heavy government involvement has resulted in high taxes and tariffs for trade through Brazil. Duties and taxes on imports could add up to 100% to the price of goods. High tariffs and consumer sales tax on imported goods not only hurts the exporter, but the consumer as well.

Government regulation has also placed strict laws on labor, manufacturing, intellectual property and competition in Brazil. In order to begin business without getting slammed by fines and penalties, it is necessary to require a strong knowledge base in Brazilian law and business practices alike. The best way to this is by building a relationship with a Brazilian partner who has expertise on the stern regulations. 

Target practice

Several strategic choices should be considered when entering the Brazilian market. Targeting key demographic factors are critical to success. The first demographic, as stated above, is the emerging high spending middle class. According to a report from the Getúlio Vargas Foundation, Brazil's middle class has grown to 55% of Brazil's 191million citizens in 2011, up from 38% of the population in 2003. 

The next area to target is Brazil’s average age group. With its economy on the rise, the population is keeping up steadily making Brazil a young country.  According to the Central Intelligence Agency, the median age of Brazil is 30 years compared to average 37 years in Australia. In order to target this segment, businesses should consider popular social media channels for advertising as well as advanced technology for consumer goods. 

Another demographic factor to target is Brazil’s variety of culture. Although it is one country, there is a significant degree of cultural diversity throughout the various states and cities of Brazil. Despite the high diversity throughout the nation, one cultural aspect that is very important in any part of Brazil is making, committing and maintaining relationships. Personal interaction and individual relationships are essential to provide exceptional business performance in the country. 

There are multiple strategies to hedge financial risk as well.  The best way to enter into an unfamiliar foreign market is by partnering with someone who is knowledgeable. A joint venture is a great way to reduce the risk of the unknown and learn from someone who has experience in the country. A partnership with a Brazilian native is another strategy to get to know people and companies you will be dealing with.

All things considered, starting up a business practice can feel like a hassle but once involved in Brazil’s power house economy, the hard work pays off in profit.

Top Tips: Key considerations when exporting to Brazil 

• Country analysis and research
• Who is your competition and what are the competition laws
• Logistics planning, packaging and labeling requirements, payment procedures
• Trade barriers
• Employment laws
• Areas of opportunity: mining and minerals, sports infrastructure, sportswear (textile, clothing and footwear)
• Secure relationships with native Brazilian businesses

 -Author: Meilssa Baker, International Project Co-Coordinator, Export Council of Australia

Event Invitation- Bribery and corruption seminar

The bribery and corruption landscape is changing – the legislation is getting tougher, the prosecutions more frequent and the penalties more severe.   

Australian exporters who understand and proactively manage the risk will go a long way in protecting themselves and the markets into which they export.  Getting it right can have benefits that extend far beyond just ticking the right boxes to satisfy a regulator; the future of your export business can depend on it.

The Export Council of Australia would like you to attend a special FLEX session to discuss the very real risks associated with bribery and corruption, from an Australian and international perspective.  Key Australian trading markets’ laws will be examined, as well as existing UN agreements.

Details

• Sydney: Friday 3rd August 2012 from 12.30-2.00pm at McGrathNicol, Level 31, 60 Margaret Street Sydney NSW 2000. RSVP: If you are interested in attending the above discussion please RSVP to Lisa McAuley at lisamcauley@export.org.auor call 02 8243 7400
• Melbourne: Thursday 2nd August 2012 from 8.00-9.00am at Victoria University, Room 10.48, Level 10, 300 Flinders Street, Melbourne. RSVP: To confirm your attendance please e-mail Collins Rex at collinsrex@export.org.au
• Adelaide: Thursday 2nd August 2012 from 8.00-9.00am at Hunt & Hunt offices, Level 12, 26 Flinders Street, Adelaide. RSVP:To confirm your attendance please e-mail Bob Shepard at bobshepard@export.org.au
• Brisbane: Wednesday 1st August 2012 from 8.00-9.00am at Logan Office of Economic Development. RSVP: To confirm your attendance please e-ail Sam Ow at samow@export.org.au
• Brisbane: Thursday 2nd August 2012 from 9.00-10.00am at Moreton Bay Regional Council. RSVP: To confirm your attendance please e-mail Sam Ow at samow@export.org.au

Madrid System Web Based Services

The World Intellectual Property Organization (WIPO) has recently developed a suite of online tools to help brand owners manage their international trade marks. The Madrid system, used by hundreds of Australian businesses each year to lodge trade mark applications in key markets around the globe including China, Japan and United States, has now been enhanced with the following new services for international trade mark holders:

Madrid Real-Time Status allows you to access the status in real time of your trade mark documents being processed by WIPO.  This allows you to see what is happening to your request at any time in the process.

Madrid Electronic Alert is a free "watch service" for monitoring the status of certain trade mark registrations.

Subscribers can receive daily email alerts when changes are recorded in the International Trade marks register.

Madrid Portfolio Manager allows holders of international registrations and their representatives to access their international trade mark portfolios, helpful when submitting new requests in the WIPO international trade mark registry. 

To access the new services, you need to register a WIPO user account linked to your email address, all services are free and video tutorials are available on each product.

For more information on the new services visit www.wipo.int

For more information on international trade marks visit IP Australia's website