They’re brands you’ll see everywhere from Melbourne to New York to Hong Kong. But to grow internationally, they’ve had to solve a major money headache Aussie eCommerce businesses face every day.
KeepCup is instantly recognisable for its reusable coffee cups and water bottles. July is known for its stylish, super-light luggage in airports, and now retail stores, across the globe. And Kat The Label has earned a global following of lingerie lovers, including none other than billionaire Kylie Jenner.
Each of these buzzy Australian brands has a sizeable eCommerce footprint. Selling to global markets, they’ve harnessed an enormous opportunity; by 2027, Australian retail sales are estimated to hit A$602 billion, with 19 per cent of that coming through eCommerce.
While that might be cause to pop the champagne (or a non-alcoholic bev if you so choose), creating a global customer base doesn’t happen without friction points.
The hidden headache of global business
When an international customer buys from a business’ store or via a marketplace, the funds don’t just zoom in, no strings attached.
Businesses are typically charged foreign currency conversion and transaction fees by their banks. Settling those payments can take from five to 10 days.
“When we first started July, we were doing lots of transfers to Asia using a traditional big bank. The transfers were so slow, and the bank would constantly change their rates on the fly without letting us know,” says Richardi Li, co-founder and CEO of Melbourne-based July.
“As an international business, one of the most important things to us is reliable and cost-efficient payments processing and transfers.”
Sick of the payment lags, excessive fees and needlessly complex processes around overseas payments, businesses like July, KeepCup, and Kat The Label have taken action.
They all ditched the big banks
Yes, it’s true. In fact, Aussie businesses are moving away from big banks at twice the global average, according to a new survey from online global payments provider Airwallex and tech consultancy Edgar, Dunn & Company.
Luke Latham, general manager of Airwallex, calls out the “unreliability” of traditional business banking when handling international payments.
“You get in the queue of each of these different intermediaries who have no obligation to prioritise transactions coming from one another,” Luke says of the transaction and settlement processes. “In the vast majority of cases, these can be settled in just a day but other systems often take as long as a week or 10 days.”
Lengthy processing and settlement times is the most common pain point for Australian businesses, the survey found.
It’s one of the many gripes Airwallex addresses with their platform. The Airwallex Global Account offers a simplified alternative for businesses taking and making international payments, with no bank queues, lengthy paperwork or wait times.
Their multi-currency wallet lets businesses hold and accept payments in their customers’ preferred currencies, avoiding forced conversion fees. And when conversions do occur, the fees are at a low rate of 0.5 per cent, compared to bank fees of up to five per cent.
The software integrates easily with Xero, Amazon and Shopify to further streamline global cash flow processes.
For these businesses, it’s been a game changer.
KeepCup’s foreign footprint
Today, Melbourne-based company KeepCup trades in seven countries and has teams in both Australia and the UK.
“Using Airwallex means we’re able to bypass those fees, which has a great impact on our business,” says Abigail Forsyth, who created the brand with brother Jamie.
“Being able to easily just swap around the currencies between our different Global Accounts has been helpful, and has made it much simpler for us to pay our suppliers and staff overseas.”
July’s world domination
In just under five years, July has disrupted the global travel luggage market with its innovatively designed, lightweight suitcases. Starting out online-only, July has recently ventured into bricks-and-mortar stores in various global locations, including a recently opened outlet in New York. With so much growth, the business reported a 640 per cent revenue increase in 2022.
As their operations rapidly expand in key markets like the UK, US and New Zealand, July’s partnership with Airwallex has helped cut the time spent on finance management in half.
“Working with a traditional bank was such a slow process, and their product suites often don’t connect together well. Airwallex is simple to set up and use, and we’re able to easily pay our factories and contractors overseas,” says Richard.
Kat The Label’s $156k savings lace-up
Originally starting as a side hustle, Kate Nixon launched Kat The Label in 2015. Now, the Melbourne-based brand is an in-demand boutique lingerie and sleepwear success doing big business in the US fashion market.
With customers in the US, and suppliers to pay in China, Kate was getting slugged with conversion fees on both ends. She now saves an eye-watering $156,000 in foreign transaction fees per year, with her Airwallex Global Account.
“When we were using CommBank and TransferWise, I was constantly having to exchange the money back to AUD and then to USD to pay my suppliers. So not only was I losing money from the actual exchange, but there were so many fees associated with using these other services,” she says.
Having an account in a local currency has vastly streamlined the process of working with wholesalers on the ground too.
“Once we secure wholesalers, getting set up with them is so much easier with Airwallex,” Kate says. “As an international business, being able to provide our wholesalers with a local banking entity means that they feel more comfortable selling our products. And we get paid quicker.”
To find out more, head to Airwallex’s website.
This article is brought to you by Kochie’s Business Builders in partnership with Airwallex.