Understanding Australia's Business and Consumer Environment: A Guide for Successful Business Down Under

Understanding Australia's Business and Consumer Environment

How will Australia's economy, business environment and consumer trends impact the success of your business? This e-book examines the fundamentals businesses must understand to successfully expand or operate in Australia.

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Heralded as the success story among advanced economies for weathering the global economic downturn of 2008-2009, Australia’s high income levels and steady growth offer good opportunities for consumer goods and services in a wide range of sectors.

Key Findings:

• At the height of the global slowdown, advanced economies as a whole contracted by 3.5% - contrasting with Australia’s 1.4% growth.
• Whereas incomes and consumer expenditure have stagnated across many advanced economies, Australia’s per capita disposable income and expenditure have expanded by 9.8% and 3.5% respectively in real terms since 2008.
• In 2012, Australia was ranked 15 out of 183 economies on the World Bank’s Ease of Doing Business Index, meaning it is the fifteenth easiest place in the world to start and operate a local firm.
• Australia has an educated population: 99.9% of adults (those aged 15+) were literate in 2011, but suffers from skills shortages.
• In 2011, the population aged 45-49 in Australia had the highest average gross income: A$77,810 (US$80,259).

Topics include:

• Ease of doing business rating
• Corruption index
• Literacy rate
• Future challenges
• Natural resources
• Media consumption
• Consumer trends
• More

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The Contrast of Indian Cities

India stands in stark contrast to most countries with large cities. Although it has some of the most populated cities in the world, it is not considered urbanised - only one-third of its population lives in cities. India has three cities with over 10 million citizens: Delhi, Mumbai, and Kolkata. Despite these large cities and their economic growth, poverty remains a problem in the country. It is estimated that one in six urban households lives in slums.

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India’s Rapid Unplanned Urbanisation Creates Opportunities and Challenges

India had the second highest urban population in the world in 2012 and will be amongst the fastest growing urban populations globally between 2013 and 2020 in absolute terms. This urbanising trend holds significant investment and consumer market potential but also creates challenges like over-crowding, pollution and rising crime levels.

India’s Urban and Rural Population: 2000-2020

Source: Euromonitor International from national statistics/UN

Note: Data for 2013-2020 refer to forecasts.

FIFA World Cup: Brazil

In this datagraphic series, Euromonitor International highlights the impact of hosting the World Cup on the country's tourism industry.

Go West Strategy in China Presents Risk and Opportunity for Luxury Goods

Analyst Insight by Rob Walker, Contributing Analyst, Euromonitor International

China’s interior provinces have potential to be a major growth engine for luxury goods, but as brands expand into the second and third tier cities of the West there is a risk too that they will dilute their cachet in the sophisticated first tier cities of the East.

The lure of southwest China

China’s interior provinces account for around two thirds of the population, but only a fifth of economic output. That disparity is narrowing, however. Infrastructure investment, retail modernisation and economic incentives to entice manufacturers are empowering second and third tier cities in the interior and helping push wealth westwards.

India’s Diverse Consumer Spending Patterns Require Multiple Business Strategies

Compared to the other BRIC Countries, India’s per household expenditure is low across most categories. However, there are large variations in household spending levels and consumption patterns, with richer regions such as Delhi, Goa and Mizoram having significantly greater capacity for discretionary spending. Marketers will need to implement multiple business strategies, tailoring to each region and target group, in order to successfully harness the tremendous potential of the Indian market.

The World's Largest Cities Are The Most Unequal

Analyst Insight by Kasparas Adomaitis, Senior City Analyst, Euromonitor International

City size remains the key explanatory factor for income inequalities across the world's urban agglomerations. The Gini coefficient is a standard economic measure of income inequality - the larger the value of the coefficient, the higher share of total income is concentrated in the pockets of the most affluent population. As illustrated in the chart below, the bigger the city, the greater value of the Gini coefficient. 

Discounters and Variety Stores Thrive in Lower Income States

As part of Euromonitor International's extended US coverage, channel size data will be available across 22 States. Growing at 8% and 4% respectively, the US variety stores and discounters channels performed remarkably well in 2012. This datagraphic highlights that rather than depending on a strong macroeconomic environment, both channels flourish in States with lower incomes. 

Euromonitor International Releases State-Level US Data

We are pleased to announce the addition of United States regional and state-level data and analysis to its Passport market research database, identifying unique differences within the world’s largest economy.

“The US market is diverse and trends can vary significantly by state and region. For example, popular brands in the Southern region may not be well received in the Pacific,” said US Research Analyst, Jared Koerten. “This data allows users to identify regional trends, making it easier to develop existing products in new regions and enhance their chances of success.” 

The new data covers 22 of the largest states, equaling 80 percent of the US population, and helps retailers and brands target specific regions or states with potential growth opportunities. 

Regional-level reports and breaking news articles will help better understand trends and socioeconomic conditions in each region as they are happening.  

“While domestic businesses gain an obvious advantage from using regional data, international companies also benefit by finding potential opportunities for new business growth within a niche market in the US,” Koerten said.

Ten facts from Euromonitor’s new state-level data:

1. One-fifth of all bottled water sold in the US is in California.
2. More than 53 percent of variety stores in the US are located in the South.
3. Per capita disposable income in the Northeast is 15 percent higher than the national average.
4. The average consumer in Ohio spends nearly US$200 per year at discounters like Save-A-Lot and Aldi – nearly three times the national average.
5. Walgreen Co, the national leader in drugstores with an outlet share of over 26 percent in 2012, trails both rivals CVS Caremark Corp and Rite Aid Corp in the Northeast.
6. With per capita disposable income of $28,300 per year, Mississippi was the country’s poorest state in 2012.
7. The average consumer in the Midwest purchases more than 200 litres of carbonates every year.
8. The population in Arizona is projected to grow faster than any other state – growing more than 15 percent by 2020.
9. Per capita coffee consumption in the Northeast is nearly 12 percent higher than the national average.
10. Were it an independent country, California would rank just behind Canada as the world’s 12th largest retailing market, with total retail sales of nearly US$307 billion in 2012.

Forecast Economic Growth Across the World’s Major Cities

Analyst Insight by Kotryna Gailiute, Manager - Passport: Cities

Euromonitor's new database, Passport: Cities shows the world is becoming increasingly urbanised and all of the its major metropolises continue expanding in terms of GDP created in the city. Rates of growth, however, are very different across cities - while some are rapidly becoming wealthier, others are more saturated and have already lost growth momentum. If these cities continue following different growth paths, what will the urban world look like by 2020?  

Taking a closer look at Euromonitor International projections of real GDP growth in the world’s top 80 cities (India, Middle East and Africa is excluded from the analysis) reveals the leaders in wealth and growth until 2020. While the wealthiest cities will remain in the Western world, growth opportunities can definitely be identified in Asian, Eastern European and Latin American cities. This analysis provides GDP growth decomposition of the fast-growing cities, highlights the main growth factors and makes conclusions about changing consumption patterns and demand in cities.

Source: Euromonitor International

Chart 1 demonstrates that over the upcoming decade all the cities will grow economically and the wealthiest cities today will remain on top of the list in 2020. Tokyo, New York, Osaka, Paris and Los Angeles will remain the largest markets of urban consumers. These cities have relatively wealthy consumers with their preferences and lifestyles already formed. As these cities are in a mature development phase, their forecast GDP growth rate is rather moderate.

Economic expansion will be more significant in other parts of the world. Asian cities will move up in the list particularly significantly. In terms of total GDP, by 2020 Shanghai will catch up with Houston, Beijing and Tianjin will rank above Sydney and Toronto, Jakarta will overtake Vienna, Montreal and Dublin, and Kuala Lumpur will leave Amsterdam, Copenhagen and Vancouver behind.

The general trend is that Eastern European and Latin American cities will also move up. Saint Petersburg will have GDP comparable to that of Gothenburg by 2020 and Prague will create more value added than Marseille or Manchester. Bogota will do better than Lyon and Buenos Aires will take over Montreal.