Australia market
Commonwealth of Australia
Fig. 1 National flag of Australia
Australia, officially the Commonwealth of Australia, is a sovereign country comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands. It is the largest country in Oceania and the world's sixth-largest country by total area. Australia is a highly developed country, with the world's 14th-largest economy. It has a high-income economy, with the world's tenth-highest per capita income. Australia is a member of the United Nations, G20, Commonwealth of Nations, ANZUS, Organisation for Economic Co-operation and Development (OECD), World Trade Organization, Asia-Pacific Economic Cooperation, Pacific Islands Forum, and the ASEAN Plus Six mechanism.
Fig. 2 Map of Australia
A wealthy country, Australia has a market economy, a high GDP per capita, and a relatively low rate of poverty. In terms of average wealth, Australia ranked second in the world after Switzerland from 2013 until 2018. In 2018, Australia overtook Switzerland and became the country with the highest average wealth. Australia's poverty rate increased from 10.2% to 11.8%, from 2000/01 to 2013. It was identified by the Credit Suisse Research Institute as the nation with the highest median wealth in the world and the second-highest average wealth per adult in 2013. Ranked fifth in the Index of Economic Freedom (2017), Australia is the world's 14th largest economy and has the tenth highest per capita GDP (nominal) at US$55,692. As of September 2018, there were 12,640,800 people employed (either full- or part-time), with an unemployment rate of 5.2%. Data released in mid-November 2013 showed that the number of welfare recipients had grown by 55%. In 2007 228,621 Newstart unemployment allowance recipients were registered, a total that increased to 646,414 in March 2013.Australia is a major exporter of agricultural products, particularly wheat and wool, minerals such as iron-ore and gold, and energy in the forms of liquified natural gas and coal. Although agriculture and natural resources account for only 3% and 5% of GDP respectively, they contribute substantially to export performance. Australia's largest export markets are Japan, China, the United States, South Korea, and New Zealand. Australia is the world's fourth largest exporter of wine, and the wine industry contributes A$5.5 billion per year to the nation's economy.
1. Introduction to Australia
The Australian household appliances market has experienced low, steady growth in recent years, a trend that is forecast to continue through to 2019. Growth is low as the Australian market has reached maturity. It is dominated by strong local players like Harvey Norman and Winning Group. There is scope for growth in online sales, which have not seen great adoption in Australia. Amazon does not sell household appliances in the country, while winning only sells through stores. Harvey Norman does sell online and is looking to grow this channel significantly. Table 1 shows the household appliance market in Australia, the Australian household appliances market had total revenues of $6.8bn in 2014, representing a compound annual growth rate (CAGR) of 1.4% between 2010 and 2014. In comparison, the Japanese and Chinese markets grew with CAGRs of 0.9% and 13.2% respectively, over the same period, to reach respective values of $17.6bn and $109.6bn in 2014. The major domestic appliances segment was the market most lucrative in 2014, with total revenues of $4.9bn, equivalent to 71.8% of the market's overall value. The minor domestic appliances segment contributed revenues of $1.9bn in 2014, equating to 28.2% of the market's aggregate value. The performance of the market is forecast to follow a similar pattern with an anticipated CAGR of 1.5% for the five –year period 2014 - 2019, which is expected to drive the market to a value of $7.3bn by the end of 2019. Comparatively, the Japanese and Chinese markets will grow with CAGRs of 3.1% and 10.2% respectively, over the same period, to reach respective values of $20.6bn and $178.2bn in 2019. There is the potential for growth should smart connected appliances enjoy strong adoption ratios. These are appliances that can communicate with other devices like smartphones and tablets and which can be controlled from these other devices. They come at a premium in terms of cost and could therefore increase the market's value. The Australian household appliances market grew by 2% in 2014 to reach a value of $6.8 billion. The compound annual growth rate of the market in the period 2010–14 was 1.4%. In 2019, the Australian household appliances market is forecast to have a value of $7.3 billion, an increase of 7.4% since 2014. The compound annual growth rate of the market in the period 2014–19 is predicted to be 1.5%.
Table 1 Australia household appliances market value (2010-19)
2. WDIRC selling
The forecast of WDIRC selling can be shown in Table 2 during the first ten years since product launched. Here the assumptions of households, occupancy ratio, initial sale, selling price, and manufacture cost are 8,400,000, 0.0060%, 504, 350 and 200, respectively. The first year is set as the baseline for comparison with the following years, the sale volume, year penetration, revenue, cost and profit are 504 (sets), 60 (ppm), 176,400(USD), 100,800 (USD) and 75,600 (USD), respectively. As we think, the growth rate with years will be 1, 1.33, 2.49, 3.04, 4.81, 6.64, 6.90, 6.93, 8.30 and 9 times over the first year. The year penetration of WDIRC will be from 60 ppm to 540 ppm at the end of tenth year, the totally ownership (penetration) is close to 0.302%, it still is a low penetration ratio in Australia even WDIRC listed in market for ten years. However the revenue, manufacture cost and profit these three also present an ascending trend, the profit earned from Australia is about $ 0.680 million at the tenth year in an exclusive market, it owns a huge market and profit in this market. Totally according to our prediction and assumption, the selling in Australia will be up to 25,418 sets, even this; the penetration ratio is still lower than other consumption electric products such as TV, Refrigerator, Air conditioner, and Wash machine.
Table 2 To estimate the selling of WDIRC in Australia
How about the annual growth rate for selling WDIRC in Australia market? Fig. 3 shows the result. Here the calculation of revenue can use this equation as “WDIRC’s Revenue = Annual growth rate * Year + Baseline”, the formula can be written in a mathematic equation in Figure. According to this regression by data simulation, the annual growth rate it take about $167.207k per year (r2 =0.9816), in other words, by averaged the annual revenue is $167.207k in Australia market for selling WDIRC products during the first decade.
Fig. 3 To estimation the revenue of WDIRC selling in Australia market
3. Rice selling
A ten-years forecast to WFR sale, after WDIRC launched in Australia market, is presented in Table 3. The first year since the marketing of WDIRC, online/offline deals for WFR sale are 724 kg, here the assumptions of population, rice consumption, sharing of WFR, online buying rate and market sharing are 24,152,200, 10.00, 0.01%, 10.00%, and 30%, respectively. How to calculate the WFR volume by online/offline sale, Eq. 1 is the equation for calculating the WFR sale volume.
Eq. 1 SaleVolume=Population x RiceConsumption x WFRratio x On/OffBuyingRatio x MSharingRatio
(eg. 724 = 24,152,200 x 10.0 x 0.0001 x 0.1 x 0.3)
The use rate of WFR is set as 0.00003 kg/person-year. Based on this, we can get the annual revenue is $ 724 (WFR priced as $1), and the profitability is set to 10%, so the profit that will earn $ 72. Changing with the time, the ratio of WDIRC in kitchens will increase and cause the use of WFR increasing. We assumed the series of growth rate (G.R.) by years is 1, 6.88, 12.09, 16.72, 23.82, 28.23, 30.57, 36.79, 41.78 and 41.96. G.R. it is based on the prediction of WDIRC’s growth. By this series of G.R., both revenue and profit, they will also be presented like this serial when the dealing cost of WFR through online/offline transaction is keeping constant. Whatever the cost of online/offline transactions depends on the volume of WFR’s selling, so if the volume with time is scaling up, the dealing cost will be significantly lowered, in other words, the profitability with time will increase more than our prediction. If all hypotheses are true, the profit in tenth year will approach to $ 3,038. Eq. 2 calculates the penetration of WFR which to be used in this country by people. From this indicator (URate of WFR), we can see the level of penetration of WFR, even at the tenth year, the level of WFR use rate in Australia is still underestimation, that’s meaningful for us to optimistically think, the use rate of WFR can be easy completed and it will be grew up more than our prediction.
Eq. 2 URate of WFR = SaleVolume of WFR / Population
(eg. 0.00003 = 724 / 24,152,200)
Table 3 To estimate the selling of WFR in Australia
Regarding the revenue of WFR selling in Australia, Fig. 4 shows the result. This is a prediction by data simulation according to our assumption, the regression could be calculated as “WFR’s revenue = Annual growth rate * Year + Baseline”. The result shows the annual growth rate is 3.433k per year (r2=0.9866), in other words, the increasing of revenue of WFR selling in Australia is $3.433k dollar per year. This growth can help the company to maintain its team in the local market for servicing customers.
Fig. 4 To estimation the revenue of WFR selling in Australia market
4. To summarize the revenue and profit
Here according to the estimations above, we summarize the incomes from sales of WDIRC and WFR in Australia. Both revenues and profits are presented in Table 4. In the first year, the products of WDIRC and WFR are unfamiliar with Australian people; namely the recognition and acceptance aren’t well to local consumers, so on the beginning (1st year) sales would be not good and the totally revenues and profits will be $ 177,124 and $ 75,672, respectively. Both of them will increase with years when selling with good experiences and promotions. Through our forecast, at the end of tenth year, the profits of WDIRC and WFR will be up to $ 680,400 and $ 3,038, and the totally profit will be $ 683,438, this is a huge profit which be created in Japan market by our novel products and services.
Table 4 To estimate both revenues included WDIRC and WFR selling in Australia
Totally the revenue of WDIRC and WFR (2W) selling in Australia market can be shown in Figure 5 The 2W revenue in first year is 177.124k dollars, after that the growth rate of revenue is 170.640k per year, this is a simple regression by mathematic model to predict the revenue on product selling. In practice, there are other factors that need to be considered much more, it could be higher than this or lower. Whatever by this calculation let us to trust that the market it always be there.
Fig. 5 To estimation the revenue of WDIRC and WFR selling in Australia market