Optimism about global digital trade

Businesses and consumers are optimistic about the globalised economy according to new data from financial infrastructure platform Stripe. The company found that businesses are looking to expand into new international markets while consumers are increasingly willing to purchase cross-border goods and services online.

Despite macroeconomic challenges, both businesses and consumers are optimistic about buying and selling more outside of Australia. 62% of Australian businesses are planning to expand into other countries within the next two years, while 23% expect more than 75% growth internationally over the next five years.

Businesses in Australia feel there are fewer restrictions on how they operate today compared to the past. 58% think it is easier to run an international business today than it was five years ago. Only 16% find it harder to do so.

This optimism about the global economy also extends to consumers. 72% of consumers in Australia are open to the cross-border purchase of physical goods, and 68% are open to buying digital services.

Digital trade is expanding access to the global economy

Digital exports are levelling the playing field and allowing businesses of all sizes — from “single-person multinationals” to large and predominantly offline traditional enterprises — to access global markets.

Seventy-four per cent of sole proprietor businesses in Australia now sell internationally, heralding the rise of single-person multinationals. 11% of these sell to more than 11 global markets.

At the other end of the business spectrum, large traditional enterprises — often with thousands of employees — are leaning into cross-border expansion as well. From 2021 to 2022, there was a 24% growth in Australian enterprises selling internationally via digital channels on Stripe. Globally, 50% of enterprises plan to expand further internationally in the next two years.

Traditional, offline industries — such as education — are also transforming in a digitised global economy. 88% of education businesses around the world sell internationally today, and 70% plan to expand further internationally in the next two years.

Digital trade is diversifying international trade routes

Economic infrastructure for the internet means businesses can participate in global trade, regardless of where they’re located. However, most businesses have barely begun to tap this potential.

While many of the fastest-growing digital export routes are between neighbouring countries, there are striking exceptions. Australia and Ireland have a burgeoning trade relationship driven by travel and tourism, and in 2022 Ireland was the fastest-growing export destination for Australian businesses.

The overall geographic scale of digital export routes is also broadening for all countries analysed in the report. Based on Stripe transaction data from 2022, the top five digital export markets for all countries span across at least two continents. For Australia, the top five digital export markets stretch further, covering three continents — North America, Europe and Oceania (New Zealand).

“There’s no denying businesses in Australia and beyond are operating amid a challenging economic climate," said Karl Durrance, managing director for Australia and New Zealand at Stripe.

“During a period as crucial as this one, they need to make sure they are maximising their potential to increase cash flow, and expansion into overseas markets has proven to be an effective strategy to do just that. We are proud to be providing businesses with the simple, scalable financial infrastructure they need to achieve global growth,” he said.

Image credit: iStock.com/aislan13