Australia is one of the world’s largest countries, the only one to cover an entire continent, and has more kangaroos than people (really). It’s also a fantastic market opportunity for British businesses looking to expand internationally. Here are three things to know about the land Down Under.
2023 is the year that the free trade agreement (FTA) between the UK and Australia comes into effect. The FTA was – is – symbolic, since it was the first new trade deal the UK negotiated from scratch since leaving the European Union. The UK government hopes it will increase trade with Australia by 53%, boost the UK economy by £2.3 billion, and add £900 million to household wages in the long run.
A summary of the FTA is here but in essence, the government claims that there will be:
Although the trade agreement was signed in 2021, it had to be debated and ratified by both countries’ parliaments, which took place in 2022. The agreement is expected to come into force soon. One sector expected to prosper is food and drink – the FTA allows food and drink products to exit customs more quickly than before, so businesses can have certainty and ship with ease when exporting to Australia.
In 2021, the combined value of UK/Australian trade was £14.4 billion. A total of 15,300 UK VAT-registered businesses, employing a total of 3.4 million people, exported goods to Australia that year.
A working holiday visa to Australia (and vice versa to the UK) has been popular amongst many younger people. The visa allows holders to live and work in Australia for 12 months which can be extended for another year subject to certain types of work being carried out. Traditionally, the visa was for under-30s and the new FTA increases it to under-35s, and allows holders to stay for up to three years (subject to certain requirements). Now, Australia’s leading tourism body wants to go further – by raising the working holiday visa cut-off to age 50.
While the policy remains undecided, the rationale for raising the age limit would be to address worker shortages across Australia. By including older people in the scheme, Australia could broaden the range of skills and experiences it can attract, boosting the labour market. Australia’s federal government is conducting a migration review to find ways of addressing worker shortages and this is one idea potentially on the table.
Australia generated revenues of just under US $41 billion from e-commerce in 2021, which made it the 13th largest e-commerce market in the world. Revenues dipped slightly in 2022 (attributed to the effects of the Russia/Ukraine war) but according to Statista, are forecast to hit US $50 billion in 2023.
Big players in Australian e-commerce include Woolworths (which in Australia, is a grocery chain), Coles (also a grocery chain), Amazon and Apple.
Food and personal care is the largest e-commerce segment in Australia, followed by (in order) fashion, toys, hobby crafts and DIY, electronics and media, furniture and appliances. According to Australia Post’s Inside Australian Online Shopping Report 2022 (which reports on 2021):
Key drivers for Australian consumers include free delivery, discounts and coupons, hassle-free returns, loyalty rewards and points, plus positive consumer reviews.
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