"Taking your products to the World - Capitalising on The Asian Century"

Taking your products to the World

Opening up the global eCommerce opportunity3rd Annual Online Retail Supply Chain Summit29 February 2016

Charles ThompsonGeneral Manager, InternationalAustralia Post | StarTrack Group

Reorienting to Asian

opportunities

“Last smile” engagement as a differentiator

Asset-light, Disrupters &

Marketplaces

A changing landscape demands agility and a global perspective

Big themes in parcels and ecommerce today

End-to-end customer

expectations

Global eCommerce and

competition

1 2 3

4 5

Page 3

Shares of global middle class consumption, 2000-2050

Source: OECD Development Centre Working Paper 285

Asia is shaping the future global middle class

Page 4

The Asian region is forecast to have sustained income growth … and we are on their doorstep

Affluent

Converging toward Affluent

Stalled income growth

Struggling

Source: OECD Development Centre Working Paper 285(1) Key drivers – technology, investment, demographic profile

The Four Speed World(1)

Our “tyranny of distance” is replaced by the “power of proximity”

Page 5

Recent weakness of Australian dollar has catalysed export opportunities

Growing share of Australian merchandise exports go to North Asia

Page 6

Forecast to grow from US$1.5 trillion in 2014 to US$2.4 trillion in 2017

525 681 8561053

483538

598660

347383

414

445

2014 2015 2016 2017

$1,505$1,771

$2,053$2,357

North America

Asia-Pacific

Latin AmericaCentral & Eastern Europe

Western Europe

Middle East & Africa

Source: eMarketer, 2014 analysis

Asia is forecast to underpin the growth of global eCommerce

Page 7

Large and growing populations with increased levels of technology will continue to drive cross-border trade growth in the region

IndonesiaPopulation

250 millionInternet penetration

42m Users(16% of population)

eCommerce – size

4.5bneCommerce - growth

51% p.a.

Source: ITU, e-marketer, AP team analysis

ChinaPopulation

1.4 billionInternet penetration

642m Users(47% of population)

eCommerce – size

440bneCommerce - growth

51% p.a.

PhilippinesPopulation

98 millionInternet penetration

39m Users(39% of population)

eCommerce – size

1.7bneCommerce - growth

17% p.a.

AustraliaPopulation

23 millionInternet penetration

21m Users(94% of population)

eCommerce – size

56.1bneCommerce - growth

10% p.a.

IndiaPopulation

1.3 billionInternet penetration

243m Users(20% of population)

eCommerce – size

30.3bneCommerce - growth

28% p.a.

LegendInternet penetration – Internet users, 2014

Market size, 2016 forecast (USD)2011-2016 CAGR

Directional

Demographics and internet penetration drive Asian eCommerce

Government target to connect 1.2 billion

(85%) to 3G or 4G by 2020

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By 2030, China’s middle class is projected to equate to 93% of the urban population

Projected China urban households (millions) by income groups

Source: ANZ Research, Business Insider Australia

Chart depicts expected changes to composition of Chinese household wealth from 2015 through to 2030

China’s growing middle class is a key driver of Asian eCommerce

Page 9

International tourism

Government incentives & Customs eCommerce leadership (price & choice)

Much of China’s eCommerce growth is driven by increased consumer purchasing power and government policy change

Growing middle-class Appreciation of the RMB (¥)

Rising incomes complement other drivers of Chinese eCommerce

Page 10

Alibaba’s 2015 Singles’ Day sales grew 60% YOY to net USD $14.3 billion (AUD $20 billion)

2015 Alibaba Singles’ Day – in numbers:

China Singles Day - Biggest annual online day (5x Black Friday)

Page 11

Food and wine Clothes & accessories Home

Health & skincare Baby food & products Dairy

Top imports from Australia – Quality, provenance and iconic

Chinese eCommerce preferences play to Australian advantages

Page 12

Sources: Wikipedia and Australia’s International Business Survey 2014

An optimistic outlook 74% of Australian businesses (1700 surveyed) plan to expand into 2+ markets over the next two years

Recent free trade agreements with China (2015), Japan (2014), Korea (2014), Malaysia (2013)

UK

China USA New Zealand

Japan

China is now the top export target for Australian business

Page 13

Key barriers to China market entry that must be considered before you enter

Local knowledge & language

Regulations

Payments

Duties/taxes

Licences

But there are challenges to capturing the China opportunity

Sources: Austrade research and Australia Post intelligence

Page 14

Visit austrade.com.au for further information to help you get export ready

“Doing business in China has its

own risks, success is

not guaranteed”

“Get your product and brand ready for the Chinese

market”

“Protect your intellectual

property with a Trademark”

“Understand key regulations and

customs procedures”

“Ensure that you have the

necessary export documents”

“Be prepared to register your

company as a legal entity”

Do your due diligence… … Get your brand ready … Protect your IP

… Know the regs and customs … Export documentation … Company registration

Customer learnings to help your business succeed

Getting export ready for China and Asia generally is critical

Page 15

• Postal and commercial solutions

• Marketplace partnerships

• Sai Cheng China JV

• Hong Kong & Asia supply chain (incl. distribution & warehousing)

• Payment solutions

International - Powered by Australia Post

Using our trusted brand, partners and secure supply chain capabilities to meet and exceed the expectations of Asian eCommerce consumers

Our cross-border solutions can open up the Asian opportunity

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We leverage postal and commercial capabilities to deliver superior value and service

Our international solutions will evolve with your business needs

Micro business(B2C, Marketplaces)

Customer segment

Small & Medium business(B2C, B2B, Marketplaces)

Larger enterprises(B2C, B2B, B2B4C)

Optimised network (freight profile, speed)

Postal or commercial network solutions to and from Asia and the World

Tailored to customer need, e.g.• Volume, freight mix• Receiver type• Speed

Additional featuresE.g.• 3PL, VAS, returns• Packaging solutions• Tracking

Additional features (features and VAS)

Advice to expand into new markets

Talk to us: international.sales@

startrack.com.au

Consumers(C2C)

International

Page 17

A snapshot of brands selling into China via our Australian flagship store on Alibaba’s Tmall marketplace - auspost.tmall.hk

Our marketplace partnerships complement our direct solutions

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StarTrack Warehouses in every major city with aggregation offered nationally

Through our 4400 lodgement points, we

have the largest network in Australia

Perth

Tasmania

Sydney

Brisbane

Adelaide

Melbourne

Zhenzhou

Shanghai

Ningbo

Shenzhen

1 bonded warehouse3,000m2 warehouse

5 warehouses (1 bonded)20,000m2 warehouse space

1 bonded warehouse3,500m2 warehouse

2 bonded warehouses, 1 non-bonded12,000m2 warehouse space

China

Wine acceptance point via import licence provided by China Merchant International

More than 3 million sqm of warehouse that is located in 31 provinces across China owned by China Post that are available to Sai Cheng

In Tier 1 and 2 cities, Sai Cheng owns more than 30,000 sqm warehouse

A 10 year relationship to link Australian and Chinese businesses and consumers

Our Sai Cheng JV with China Post provides unrivalled access

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Product Market Overview

Fashion and accessories

We have an iconic Australian fashion brand sending to China who sell through their own sales channels and use our Express Courier International product to fulfil direct to customer within 4 days

Vitamins and Supplements

We support one of Australia's largest vitamins and supplements companies to export $3.5m worth of product to China. They have their own Tmall platform and consumer network

Milk Powder and dairy products

The growth in Milk Powder into China has seen our international product revenue grow as Chinese customers trust the EMS brand which is the largest delivery network worldwide

Wine and produce

We are building B2C, B2B and B2B2C solutions into China using our combined postal and commercial capabilities in international logistics

We provide B2C, B2B and B2B4C supply chain solutions into China for over 100 Australian businesses

International

We are already helping businesses build secure sales in Asia

Page 20

• Exciting time for Australian businesses

• Huge opportunities

• We have the solutions to help you succeed overseas

Our ambition:

To be the punter’s supply chain into and out of Australia

Conclusion – Let us help you to realise export sales opportunities

For more information: [email protected]

Thank you Questions?

Charles ThompsonGeneral Manager of International

[email protected]