Why Australian SMEs Are Now Looking at Asia-Pacific’s Secondary Markets
The Inevitable Shift in Export Orientation
For decades, Australia’s exports relied on a small number of large markets. By 2026, however, the global trade landscape is showing a significant change. Data from the DHL Export Barometer 2026 reveals that the average number of export destinations per business has shrunk from 5.2 to 4.6 countries. Instead of expanding reach randomly, Australian SMEs are consolidating markets and deepening penetration into more promising destinations.
Opportunities in Fast-Growing Secondary Markets
A recent report from Flying Fox Solutions identifies that Australia’s export growth momentum is shifting toward secondary Asian economies such as Vietnam, Indonesia, the Philippines, and Bangladesh. These countries are driven by rapid population growth, a expanding middle class, and rising demand for premium, safe food products.
For SMEs, the characteristics of these markets are actually advantageous. Smaller but repeat shipment volumes make these destinations commercially viable, provided logistics planning is disciplined.
Case Study: DXN Limited Breaking Into Southeast Asia
A strategic approach worth noting comes from DXN Limited, a Sydney-based modular data centre infrastructure company. With around 80% of revenue coming from export markets in FY2024–25, DXN has made international expansion the core of its growth strategy, not merely a side ambition.
DXN CEO Shalini Lagrutta states that Southeast Asia is not just a growth opportunity, but a structural fit. “The region’s digital infrastructure is being built right now, and prefabricated modular data centres are the right solution for markets that need speed, flexibility, and cost efficiency,” she says.
Indonesia was chosen as the main entry point because import tariffs on data centre products reach 20–40%, making local manufacturing capability more attractive than exporting finished units.
A Phased Strategy That Minimizes Risk
DXN did not immediately commit large capital. It validated market opportunities, secured local partners, and designed a structure that allowed large-scale delivery. This approach resulted in a Singapore-based joint venture with equal ownership between DXN and SSI, which will establish a joint manufacturing facility in Jakarta.
Implications for Other SMEs
For Australian SMEs considering expansion into Asia-Pacific, the lesson from DXN and 2026 market trends is clear: success is no longer determined by the size of the market being chased, but by the ability to build a balanced portfolio of destinations. Asia’s secondary markets offer an ideal combination of growing demand, affordable shipment sizes, and local partnership opportunities that can accelerate market penetration.
