India, Bangladesh and Sri Lanka have fast-evolving retail ecosystems and strong trade relationships with Australia. Even during COVID-19 lockdowns, these economies remain strong importers of Australian processed food and agricultural products. The Indian market, with 1.3 billion consumers, now features in the export strategies of many Australian FMCG companies, as they seek to diversify their export markets.
This insight examines the surge of interest in Australian-made health and wellness goods, and how e-commerce platforms are transforming accessibility for Australian exporters.
The health & wellness trend
Since the onset of the coronavirus pandemic, consumers in South Asia have focussed on boosting their health and immunity. This is a sector where Australian companies have already made commercial inroads — and more opportunities will arise. Australia's iconic wellness brand, Swisse, reacted quickly and is now selling across 10 major e-commerce platforms in India.
Indian consumers are highly receptive to Australian wellness products. Consumers appreciate our clean, green and reliable manufacturing standards, and these high standards confer an automatic brand premium on Australian wellness products.
Similarly, there is increased demand across South Asia for products that are perceived to boost people's immune system. In India and Bangladesh this applies to fresh produce, and in particular to Manuka honey. The demand for Australian citrus in Bangladesh has remained high this year, even during the local harvest season.
Breakfast cereal boom: oats are 'in'
In India, there is increased demand for breakfast-cereal oats. Oats are generally seen as 'clean', immune-boosting products and a desirable alternative to traditional breakfasts.
The breakfast cereal market is now thriving across South Asia. In India this market is now worth A$301 million annually and growing at 18 per cent per year. Oats dominate, taking a 30 per cent market share of breakfast cereals by value. Australia continues to lead in Indian imports, with a market share of 70 per cent for processed oats and 74 per cent for raw oats.[1] Leading cereal mills and food manufacturers have approached Austrade seeking B2B import opportunities from Australian suppliers.
Other categories in high demand include functional foods with health-promoting properties such as protein bars. Sales of whey protein have also accelerated during the coronavirus pandemic, although there are high tariffs associated with these processed food products. Several new brands of Australian protein bars and whey protein will launch in Indian in the upcoming months.
E-commerce: the next big shift
The rapid growth of e-commerce in the health and wellness sector is accelerating opportunities for Australian companies and South Asia is uniquely poised for a boom. With a combined 670 million internet users – and over 130 million online shoppers – the region is the second largest mass market for Australian companies, second only to China.[2]
Growth in regional e-commerce is rapid. Online retail clocked A$75 billion in sales across South Asia in 2018–19. With year-on-year growth of over 40 per cent[3] the region's internet economy is forecast to be worth more than A$200 billion within the next five years. [4]
This acceleration in e-commerce represents a revolution for retail in India, Sri Lanka and Bangladesh. For the first time, modern, western brands will become accessible to the majority of consumers, bypassing the traditional local store and its cumbersome distribution channels.
Based on market observations by Austrade in South Asia, we forecast that the market for Australian e-commerce products will grow exponentially in the coming years. This applies especially to health, beauty, nutraceuticals and processed-food products.
The impact on Australian exporters
These two consumer trends – a growing appetite for wellness goods and enthusiasm for e-commerce – create good scope for Australian companies wanting to diversify their export markets to the South Asia region. Australian companies with a brand narrative that speaks to health and immunity will likely find ready markets among consumers.
Meanwhile, the rapid shift to e-commerce gives Australian companies a more effective route to market than ever before. Additionally, e-commerce platforms provide Australian companies with the chance to test products in the region without making a significant up-front investment.
Get connected with e-commerce companies
Following recent successes, Austrade has ongoing engagements with some of the leading e-commerce platforms in the region. These include the Australian Store on Amazon India; launched in February 2020 the store currently sells over 250 SKUs.[5]
