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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India to Become the Third Largest Computer and Related Services Provider in 2014

Analyst Insight by Mindaugas Starkus, Analyst - Industrial, Euromonitor International

India’s computer and related services industry is expected to surpass that of China in 2014 and double over 2013-2017, exceeding US$200 billion by the end of the period. This will firmly put India among the three largest IT service providers in the world, together with the US and Japan. Indian and foreign companies benefit from an abundance of well-educated, English-speaking IT professionals on relatively low wages, coupled with tax incentives provided by the government.

Some of the tax benefits given to companies in the country’s Software Technology Parks (STPs) expired in March 2011 and they now have to pay profit tax on export revenue. However, the industry remains highly profitable and the increase in taxation is unlikely to force a rethink among global IT giants as to the best location for their outsourcing operations. India’s computer and related services industry had a profit margin of 44% of turnover in 2011. This was significantly higher than 14% in the US, 21% in China or 22% in Germany.

14 Facts about Mothers from Euromonitor's Survey Research

Euromonitor International's Annual Survey revealed global trends among mothers. Read 10 key facts below and then listen to our podcast to learn more.

1. Despite other demands on their time, mothers exercise slightly more often than women who have no children (69% of mothers do physical activity weekly vs. 61% of female non-mothers; 41% of mothers go to the gym each week vs. 35% of female non-mothers).
2. Parents (both mothers and fathers) use shortcuts for information about nutrition—such as testimonials and packaging—more than non-parents.
3. Mothers use advertising (TV, print, internet) as a shortcut to find out about other product information.
4. Nine out of ten mothers prepare meals at home at least once a week, more often than anyone else, including fathers (7 out of 10).
5. Mothers typically prepare home-cooked meals using entirely raw ingredients (62%), relying less on pre-prepared ingredients, such as shop-bought sauces (43%).
6. When mothers do choose convenience options such as ready meals, it is because they are pressed for time—not because they prefer ready meals or because they cannot or do not like to cook.
7. Almost half (47%) of mothers say they are on a diet trying to lose weight
8. Although mothers say they are health-conscious, they “cave in” and snack more often than non-mothers during the daytime (2.2 vs. 2.0 snacks per day on average)
9. Mothers in developed markets are more willing to spend extra on convenient products (49%) versus “green” products (36%)
10. Mothers in emerging markets consider a variety of other product information beyond quality, price, and convenience, such as branding and packaging, as well as “green”
11. Mothers in emerging markets especially enjoy learning about new products (trying new products, browsing shopping malls), compared to mothers in developed markets
12. Mothers in developed markets are especially cost-conscious and enjoy bargain-hunting more than mothers in emerging markets (though they are not necessarily using their smartphones to find deals)
13. 60% of mothers visit social networking websites (e.g., Facebook) at least weekly, compared with 55% of fathers and 46% of non-parents
14. Mothers and fathers share photos and videos online more frequently than non-parents (31% vs. 32% vs. 27%)

These results about mothers were derived from responses to Euromonitor International’s Annual Survey 2011; this survey reached out to ~16,000 online consumers ranging in age from 15 to 65+ and living in 8 major markets:  Brazil, China, France, Germany, India, Japan, UK, USA.  

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Africa's Mobile Communications Revolution

Traditionally underserved by fixed-line telephony, the advent of mobile communications has been particularly beneficial to consumers in Africa and the Middle East. A large majority of households in such countries as Morocco and South Africa now have at least one mobile phone. This is helping to popularise such services as mobile payments in countries where bank accounts are rare. With handset prices falling, smartphones are growing in popularity, helping to drive strong growth in internet usage.

Apple Inc Q2 Earnings Tell a Story of a Changing Company

Analyst Insight by Mykola Golovko, Senior Analyst - Consumer Electronics, Euromonitor International

Apple Inc reported a net income of $US9.5 billion on $US43.6 billion in revenues. The results showed an 11% year-on-year increase in revenue accompanied by an 18% fall in profits. The company is selling more iPhones and iPads, but it’s making less money off of them. This implies lower post-sale revenue. Strong volume sales growth means that Apple Inc has strong replacement rates and continues to gain users. The core of the problem for the company is that these users are only interested in the hardware and have limited/no interest in spending money on Apple services and content. Much of this is because growth in smartphone and tablet sales is strongest in emerging markets where iPhones are often purchased as status symbols by consumers with limited access to and interest in services like iCloud.

Apple Inc’s ecosystem of hardware, software, services, and other content is its main advantage over rivals who, Samsung Corp aside, compete for razor-thin margins by trying to best each other’s hardware spec sheets. As Apple Inc’s user base expands to lower-income consumers some margin erosion is inevitable. A lower cost iPhone or iPad mini, Apple TV, iWatch or any other suggested or rumoured device will not be sufficient minimize losses in profitability on its own. Apple Inc needs to focus on developing services and products for its shifting user base, and generating post-sale revenue from consumers in emerging markets.

Top Three Trends in Social Media for 2013

Analyst Insight by Pavel Marceux, Analyst - Technology, Communications and Media, Euromonitor International

Euromonitor International has identified three key global trends in Social Media for 2013. Social media is set for another year of transformation as market forces push greater crossover into other sub-segments and consumers demand wider availability of technical services. Top three social media trends: 1) The evolution of social networking platforms into a full-cycle offering of commercialised retailing and advertising solutions is set to continue. 2) The greatest user expansion will occur in communication-hungry emerging markets such as India and Indonesia. 3) Social media brands will focus much more on developing and integrating new content in an increasingly competitive and feature-driven environment.

Growing Role of Mobile Technology in Shopping

This article explores the in-store technology use and smartphone activities of global shoppers, drawing on results from the Out and About survey of 6,200 consumers in 15 markets worldwide.

Changing landscape of in-store technology use

Mobile technology is playing an increasingly important role as shoppers turn to their smartphones in stores to read reviews, compare prices, and check product availability. Consumers no longer need to rely on in-store salespeople or advertisements as their only sources of information. Indeed, even loyal in-store shoppers, who would never consider ordering a product online, sometimes look to the internet for more information before making a purchase in store. Ever-growing rates of internet access and smartphone ownership across the globe indicate that this increased use of technology in stores will remain a significant shopping trend. This article explores specific shopping-related technology activities growing in popularity among global consumers, focusing on implications for traditional brick and mortar stores as they adapt to these new shopping behaviours.

ANTAD RECAP

Analyst Insight por Ana Trulin, Analista de Investigación - Mexico en Euromonitor International

Del 13 al 17 de junio se llevó a cabo a la Expo ANTAD en la ciudad de Guadalajara, Jalisco, México. Como antecedente, ANTAD (Asociación Nacional de Tiendas de Autoservicio y Departamentales) es una de las Asociaciones más grandes del país, representando en 2011 el 3.2% del PIB mexicano.

A “ojo de buen cubero”, el piso de exposición superaba en tamaño a muchas de las expos más grandes que se hacen en el DF como por ejemplo Franquicias, Alimentaria, y Food Technology Summit.  La gente estaba aglomerada en el piso de exposición así como en el área designada para conferencias y muy sorprendente fue que se notaba que mucha gente estaba realmente haciendo negocios.

Will Users Like Facebook Home?

Analyst Insight by Mykola Golovko, Senior Analyst - Consumer Electronics, Euromonitor International

The Facebook Home software works as an Android overlay making its social network the centre of the phone experience. Facebook hopes to grow its mobile ad revenue by capturing the attention of the user on the home and lock screens, with a deeply-integrated user-interface overhaul. This is possible only on a platform as open as Android and unlikely to be rolled out to other operating systems. The mobile advertising market is something that Facebook, like many of its competitors, has been looking to gain momentum in. A smartphone centred around Facebook is a major advantage for the company over its rivals in capturing this revenue.

However, Facebook Inc’s Home will only be available on small set of high-end devices released within the past year. This means that its popularity will be largest in developed markets where the presence of these phones is the highest. Global smartphone volume sales grew almost 43% in 2012, but this growth has been mainly driven by low-cost smartphones in emerging markets. The overlay is targeted at users who have a high-end smartphone and who’s smartphone usage is already centred around Facebook. This is a small addressable audience and it would be hard to envision a scenario where the install base reaches over 5%-10% of compatible devices by the end of 2013.

Luxury Goods Landscape: China

Benefitting from a fast-growing middle class and a fast-developing distribution network, sales of luxury goods in China have consistently outperformed the global market. Sales of luxury goods in China tripled in value in the 5 years to 2012 and by 2017 the country’s luxury market is set to double in value again. By 2017 it is set to overtake France, the UK, Italy and Japan, making China the second biggest luxury market in the world after the US.