Several shipping containers outdoors used by Australian exporting companies
Business guide to Coronavirus

COVID-19: Advice for Australian business exporters

Sara Cheng, Head of International Business at My Business explains the struggles exporters are facing as the COVID-19 health crisis continues and offers advice on how to weather the storm.

The coronavirus pandemic has disrupted global trade. While the situation is changing daily, we are witnessing a lot of changes along the value chain. These include:

  • fast and dramatic foreign exchange fluctuation
  • reduction in buyers
  • a decline in sales and production activities
  • a lack of logistic services
  • shortage of raw materials and packaging supply  
  • increasing sea freight and air freight cost, increasing lead time for production, shipment, quarantine and customs clearance
  • an increasing number of businesses close down 
  • the rising unemployment rate
  • mismatching of information and channels for products of high demand. 

However, it is not all negative. We have also observed innovative exporters looking at new markets, new channels and new models to operate their business. The slowdown of global trade activities allows exporters to review their business and prepare a robust business and export strategy. When the pandemic effects ease, businesses can be better equipped and work on full speed.

To help you get through these times, here's some advice for exporters:

1. develop a risk management plan

  • If you are highly dependent on a limited number of overseas buyers or one or two markets only, you may consider diversity the markets to reduce market dependency risks.
  • If you are facing the challenges of shortage of raw materials and packaging supply imported from overseas, start looking for backup suppliers in another country, or even double-check the availability in the domestic market. Do allocate a small amount of supply from these new partners to keep the business relationship warm. They will come to your rescue when major suppliers cannot meet your demand.
  • Consider forex hedging and/or natural hedging through both having import and export activities, to minimise the forex (foreign exchange market) risks.

Are you preparing to export?

Whether you are an experienced exporter or exploring export opportunities for the first time, it's critical to understand what is required and to stay up to date. Our friendly team can guide you through the process of obtaining the right export documents you require to ensure smooth customs clearance and facilitate duty exemptions.

2. scrutinise your operational costs

  • Again, if you are in goods production, look for new suppliers of raw materials and packaging in another country from the existing suppliers and compare the price. The market intelligence can help you better negotiate the price with current suppliers too.
  • Check your eligibility for government and industry's financial support for exporters. Export Market Development Grant is a good starting point.
  • If you have a high fixed cost, consider outsourcing non-core functions even to overseas service providers.
  • If you have arranged remote working for employees, support them with a structured time management system, remote working process and tools online, and test this model. If it works fine and does not affect work efficiency nor generate business risks, consider moving some staff to work from home full-time or part-time permanently so to reduce some of the office cost.
  • Consider improving your inventory management to better control cash flow.

3. review your business strategy and ask yourself these questions

  • What have you observed and what insights have you got from your business operation during the COVID-19 spread period?
  • What does COVID-19 means for your business, your industry and your key stakeholders? What is the implication? What can be leveraged, and what needs to be fixed? What are the challenges and opportunities?
  • Can some or all of your business activities be digitalised and move online?
  • Can you shorten the value chain to be as close as possible to end-users overseas?
  • What is your core strength as an exporter which must be retained, grown and further leveraged? Is it unique and sustainable?
  • Do you have the flexibility with resources and production/supply capacity so you can operate on a lean cost?
  • Can you leverage external resources and capabilities both domestically and overseas while you focus on your core strength and core functions such as product development, branding and/or sales? Or maybe your best opportunity is to leverage the needs and trends of other exporters and focus on contract manufacturing only?
  • What is your business bottleneck in 80% of the time and currently? How can that be resolved?

Lastly, keep an eye on the fast-moving market and business environment, including import and export regulations. Remember to also stay updated on the latest Australian Government travel advice and travel restrictions in place for your safety.

For further information, please contact our International Business Team

My Business is on hand with a range of resources to help businesses navigate this difficult time, with practical advice and information to help you develop strategies to maintain and sustain. Visit our resource hub to find out more.

Sara Cheng

Head of International Business, My Business

Sara specialises in international business strategy, mergers and acquisitions, international market development, sourcing and outsourcing, as well as business investment in China.

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