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Ecommerce boosts Pacific exports

Digital adoption is fuelling Pacific export growth, and while access to finance remains a barrier to business growth, new data from Pacific Trade Invest Australia’s (PTI Australia) third export survey shows export confidence is high.

The research surveyed more than 200 businesses across agriculture (including forestry, farming and fisheries), tourism, manufacturing, services and resources (including fuel and energy, minerals, gems and pearls) across 16 Pacific Islands.

The report, developed by PTI Australia with the support of ACA Research and the Australian Government, fills the lack of private sector data from the region, providing a snapshot of export dynamics in the Pacific and insight into changes and trends in Pacific exports.

Data shows the proportion of new exporters – enterprises who started exporting in the past three years – has grown 10 per cent in four years to reach 41 per cent, and while the number of businesses reporting an increase in export orders over the past year has slightly declined (49 percent down from 56 percent in 2016), export confidence remains high, with more than two out of three businesses expecting growth over the next year. In line with confidence, most exporters expect to increase employee numbers during the next 12 months.

Fuelling this growth are online channels, which are used by 79 percent of exporters – including social media (67 per cent) and their own or third-party websites or apps (52 and 20 per cent respectively) – to generate revenue.
Tim Harcourt, former chief economist of the Australian Trade Commission (Austrade) and JW Nevile Fellow in Economics at the University of New South Wales, prefaced the report noting that with small populations but vast distances and complicated logistics, the Pacific had a lot to gain from online commerce.

“PTI Australia’s research shows exporters are innovative and proactive in finding new ways to boost sales and there is no doubt the rise of ecommerce, supported by easier access to digital devices, increased usage among customers and better ICT infrastructure, is key to growth,” Mr Harcourt said.

“Government assistance makes a difference too in the Pacific with nearly a third of businesses surveyed contacting PTI Australia for assistance in increasing export orders.”

Australia and New Zealand are the key export markets for Pacific Island exporters with 92 per cent of exporters regarding them as main destinations but intra-regional trade is growing too with more than two in three businesses trading within the region.
“Just as the Pacific continues to play its key role as a ‘nursery’ for Australian and New Zealand exporters, Pacific exporters are also finding the Trans-Tasman economies as their happy hunting ground. Pacific-based exporters in general use intra-regional trade to get their sea legs as an international exporter before expanding to Australasia, Asia and beyond,” Mr Harcourt said.
Access to finance remains one of the biggest challenges faced by the majority of exporters in the region – with the majority of exporters (59 per cent) finding it difficult to obtain finance for their exporting activities – along with high energy prices and transport costs, and the impact of natural disasters.

PTI Australia trade and investment commissioner, Caleb Jarvis, said it was interesting to see most exporters indicate they would consider some level of foreign investment to grow and overcome financing barriers.

“This indicates the market is primed for impact investment, which can drive sustainable economic growth in sectors such as agriculture, aquaculture, forestry, manufacturing, renewable energy, eco-tourism and microfinance,” Mr Jarvis said.
“PTI Australia will continue to support Pacific businesses to facilitate trade, attract investment and create jobs to make long-term, sustainable improvements to Pacific economies.”

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