MAI knowledge

Why China is a Huge Opportunity for Australian Startups

July 15, 2016

Many Australian Startups founders see the United States as their go to place when it comes to international expansion, which isn’t a surprise, as it has no language barrier, a similar culture, and is the start-up capital of the world.

The market Australian Entrepreneurs should take a closer look at today is not the US, but China. It has a population (and market size) of over 1.3 billion people, which is 50 times Australia’s. This kind of scale is something that can be difficult for Australians to understand, to give a comparison, Shenzhen in southern china is the size of Melbourne with the population of Australia.

The sheer size of the Chinese market is only one of the reasons that Australian entrepreneurs should take a close look at China, another is that now is the perfect time to try and enter the Chinese market.

China is currently undergoing an economic transition, which is seeing a shift from a manufacturing and investment based economy to a more innovative consumption based economy. It is estimated that by 2030, there will be 297 million households in China that can be described as either middle income or affluent.[1]

The large power of these Chinese consumers going forward coupled with the shift towards a more innovative economy is creating heavy demand for high quality products globally and providing opportunities for Australian innovation to service this market.

Australian Startups also have a natural advantage when it comes to China, our 2-3 hour time difference and close geographic proximity make us an ideal country for China to do business with. There are however some issues in dealing with China, these typically include language, cultural and regulatory barriers.

They key to rectifying these issues is to do extensive research and establish the right partnerships, so that the process of expanding into China can run more smoothly.

In addition to this, Australian products are looked upon favorably by Chinese consumers, with the view that they are clean and high quality manufactured products. The recent surge in demand for infant formula coming from China shows just how powerful the Chinese consumer can be, with government intervention needed to slowdown the exporting activity.

A combination of all these factors, and more, show that China is a market that Australian Startups and Entrepreneurs can no longer afford to ignore. 

At MAI Capital we work with entrepreneurs to unlock the potential and opportunity in Australia, China and beyond.

 

 

[1] ANZ- Sleeping Giant Report ��7�E �

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