PostExpo Hong Kong - Cross-Border eCommerce

1. Cross-border
eCommerce
Connecting Australia, Asia
and the world
Post Expo 2016
Day Two – Wednesday 25 May
Charles Thompson
General Manager, International
Australia Post | StarTrack Group

2. Page 2
StarTrack & Australia Post
Largest logistics
force in Australia Services business
& consumer markets
Offers parcel, freight,
express, courier and
international logistics solutions
Delivers end-to-end
ecommerce solutions

3. 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

4. Page 4
Shares of global middle class consumption, 2000-2050
Source: OECD Development Centre Working Paper 285
Asia is shaping the future global middle class

5. Page 5
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”: replaced by the “power of proximity”

6. Page 6
Forecast to grow from US$1.5 trillion in 2014 to US$2.4 trillion in 2017
525 681
856
1053
483
538
598
660
347
383
414
445
2014 2015 2016 2017
$1,505
$1,771
$2,053
$2,357
North America
Asia-Pacific
Latin America
Central & Eastern Europe
Western Europe
Middle East & Africa
Source: eMarketer, 2014 analysis
Asia is forecast to underpin the growth of global eCommerce

7. Page 7
Large and growing populations with increased levels of technology will continue to
drive cross-border trade growth in the region
Indonesia
Population
250 million
Internet penetration
42m Users
(16% of population)
eCommerce – size
4.5bn
eCommerce - growth
51% p.a.
Source: ITU, e-marketer, AP team analysis
China
Population
1.4 billion
Internet penetration
642m Users
(47% of population)
eCommerce – size
440bn
eCommerce - growth
51% p.a.
Philippines
Population
98 million
Internet penetration
39m Users
(39% of population)
eCommerce – size
1.7bn
eCommerce - growth
17% p.a.
Australia
Population
23 million
Internet penetration
21m Users
(94% of population)
eCommerce – size
56.1bn
eCommerce - growth
10% p.a.
India
Population
1.3 billion
Internet penetration
243m Users
(20% of population)
eCommerce – size
30.3bn
eCommerce - growth
28% p.a.
Legend
Internet 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

8. Page 8
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

9. Page 9
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

10. Page 10
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

11. Page 11
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

12. Page 12
• 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

13. Page 13
Sending overseas, simply
Introducing our new international products
What’s new?
• Easy options
• Enhanced security
• Flexible extras
• Less paperwork
• Competitive pricing to
popular export destinations
– including China (Zone 2)
For more information visit auspost.com.au/sendoverseas

14. Page 14
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

15. Page 15
How we help businesses sell into China
Tmall (B2C)
auspost.tmall.hk
1688 (B2B)
auspost.1688.com
JD.COM (B2C)
auspost.jd.hk

16. Page 16
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 warehouse
3,000m2 warehouse
5 warehouses (1 bonded)
20,000m2 warehouse space
1 bonded warehouse
3,500m2 warehouse
2 bonded warehouses,
1 non-bonded
12,000m2 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

17. Page 17
• 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

18. Thank you
Questions?
Charles Thompson
General Manager of International
For more information:
charles.thompson@auspost.com.au
international.sales@startrack.com.au

19. Page 19
Appendix – Speaker Biography
Charles Thompson, General Manager International, Australia Post | StarTrack
Charles joined Australia Post in December 2010 as Group Head of Corporate Finance & Mergers & Acquisitions.
Since then he has held various management roles and is currently Head of its International business after leading
Australia Post’s successful buy-out of StarTrack Express in 2012. Charles also sits on the board of Sai Cheng International,
Australia Post’s China based Joint Venture with China Post.
Previously Charles worked for 8 years with the Toll Group as its Group General Manager Strategy and M&A, during which
time he played a key role in Toll’s expansion and M&A agenda across the Asia.
Before becoming a senior commercial executive, Charles worked as a management consultant with leading global firm
The Boston Consulting Group. Before that Charles practiced M&A law as a Senior Associate with leading international law
firms Herbert Smith Freehills and Clayton Utz.
Charles has a passion for Asia (first visiting China as a child in 1983) and supply chain thinking, and an
ambition to capture the vast opportunities open to Australia Post | StarTrack, particularly across Asia.
Outside work he enjoys many activities, most of all time with his young family.
Qualifications:
 Monash University Bachelor Economics (1991)
 Monash University Bachelor of Laws (Hons) (1993)
 Australian Institute of Company Directors (2014)

20. Page 20
Recent publications – Connecting Australia to China and the world
South China Morning Post
Link: asiatoday.com.au/content/ati-magazine-april-may-2015
Extract –
“Charles Thompson
looks at how
Australia Post is
positioning its
business to win in e-
commerce through
its international joint
venture with China
Post.
New alliances with
Alibaba and China
UnionPay also allow
Australia Post to
open the door for
Australian exporters
to millions of active
online consumers”
Asia Today