eCAP guidelines

Introduction


The Department for Trade and Investment (DTI) works with businesses who are: 

  • looking to export for the first time
  • are exporting but looking to increase export sales
  • established exporters looking to explore new markets.

The South Australian eCommerce Accelerator Program (eCAP) is a grant program to support South Australian small to medium sized businesses to grow their international export revenue and create new jobs in South Australia by selling products and services online. 

Trade disruptions, including the impacts of COVID-19, have created challenges for South Australian exporters, especially our tourism, international education sector, wine and premium food exports. Consumer spending habits have changed with rapid growth in eCommerce transactions as worldwide consumers embrace online sales. 

The South Australian Government is delivering a new round of eCAP to assist South Australian exporters to embrace online technology, find new export markets and increase online export sales. 

eCommerce exporting


Online exporting or cross-border eCommerce provides a variety of potential business models and export methods for exporters to follow.

Traditional exporting usually involves a Business to Business (B2B) model in which the exporters customer is another business.

Cross border eCommerce enables exporters to adopt a Business to Business to Consumer (B2B2C) model, which functions similarly to traditional exporting. In this model, businesses sell products to a distributor that will then sell products to online consumers.

Exporters can also choose to sell directly to consumers under a Business to Consumer (B2C) model through their own website or a third-party platform. In this case the customer is the end consumer rather than a distributor or retail store. This model often required local expertise in areas including logistics, social media, foreign language customer service and website design.

It is important for exporters to consider a number of factors when selecting an eCommerce model that is best for them, such as profit margins, costs and market experience. For further information, Austrade’s Online Exporting: A Guide for Australian Business has been developed to assist businesses to understand the online exporting opportunity. 

eCAP funding categories


eCAP has three categories that acknowledge exporters may be at different stages of developing their eCommerce capability or to assist collaboration on eCommerce solutions that help businesses cluster together to increase their online sales:

New to eCommerce

Provides grants of up to $5,000 (unmatched) to enable exporters to engage professional services to build their eCommerce capability through training or professional advice; or assist exporters with developing their cross-border eCommerce Strategy.   
Applicants for this category will be in the early stages of planning their eCommerce approach and the provision of unmatched funding is to acknowledge the importance of building cross-border eCommerce capability and having an eCommerce Strategy.

eCommerce Accelerator

Provides grants of up to $30,000 (matched 1:1 funding) to support activities that directly improve exporters ability to increase cross-border eCommerce sales in identified markets.

Applicants for this category will have existing eCommerce capabilities or a cross-border market entry strategy for execution. Applicants will be required to contribute dollar for dollar matched funds towards the proposed costs.

Cluster Projects
Provides grants of up to $100,000 (matched 1:1 funding) per Cluster Group to enable groups of exporters from complementary or similar industries or locations to work together on a joint eCommerce initiative, to develop eCommerce capability and cross-border eCommerce sales.

Cluster Projects are led by one organisation (Cluster Lead) on behalf of multiple businesses (Cluster Members) to foster collaboration and critical mass. Cluster Members must be able to contribute 1:1 matched funding to the Cluster Lead towards the proposed costs of their eligible activities.

Example:

A Lead is assisting five Members with creating an online store at an estimated cost of $150,000. The Lead is eligible to apply for $75,000 with each Member contributing $15,000. Resulting in $75,000 matched funding.
 
Cluster Leads are able to budget up to 10 per cent of the proposed project budget to support project management.

Eligible activities


Funding is available for the following eligible activities, noting that not all eligible activities are available for each eCAP category:

New to eCommerce

  • Undertake training or professional development services to help build your eCommerce capability
  • Engage professional services to help you develop your eCommerce Strategy, select an appropriate eCommerce model and identify target markets.

eCommerce Accelerator 

  • Undertake training or professional development services to help build your eCommerce capability
  • Activities to help you to implement your cross-border eCommerce Strategy, including fees associated with listing your product on eCommerce platforms (capital items excluded)
  • Engage professional services to help you review your eCommerce model and identify improvements to increase international sales
  • Engage professional services to help you to sell your products or services through third party platforms such as WeChat, Amazon and others
  • Systems development or professional advice to improve your order fulfillment capabilities in an identified market
  • Developing a digital marketing plan for target markets to drive traffic from identified markets to an online store or listings on third party platforms
  • Develop digital marketing assets, including website translation, specific for an identified export market
  • Purchasing market specific social media or online advertising for an identified export market.

Cluster Projects

  • Develop an online store or eCommerce platform for a cluster of businesses to market and sell products or services into international markets
  • Engage professional services to build the eCommerce capability of identified businesses
  • Develop digital marketing assets specific, including website translations, for an identified export market
  • Developing a digital marketing plan for target markets to drive traffic to an online store or listings on third party platforms
  • Purchasing market specific social media or online advertising for an identified export market.

Note: Receiving funding from the eCAP does not impact on the potential to receive funding from other South Australian Government programs, except that funding cannot be claimed for activities that are fully funded by other Commonwealth, State or Local Government programs.

Exclusions


The following exclusions apply. This list is not exhaustive and other exclusions may be applicable. 

  • Unapproved expenditure
  • Activities where a valid invoice and proof of payment cannot be provided
  • Activities that target domestic sales
  • Expenditure incurred prior to the date of application
  • Capital expenditure including ICT equipment to support eCommerce activities
  • Ongoing costs of running an online platform
  • Costs of routine business activities, such as (but not limited to):
    • Routine or seasonal marketing costs
    • Routine accounting costs, including the costs of audit certificates
    • Rental costs and expenses, not directly related to ecommerce activities
    • Routine utility costs
    • Routine training costs
  • Freight costs
  • General stationery
  • Production of product including samples
  • Travel expenses and Food and beverage
  • Working capital 
  • Payment of wages/salaries
  • Trademarking, copywriting and Intellectual Property protection
  • Design and manufacture of product labels and product packaging
  • General academic qualifications and courses
  • Membership of subscriptions and professional associations
  • Any activity that is subsidised directly to the recipient by another Commonwealth, South Australian or Local Government program.

Eligibility 


This is a competitive program that is awarded based on the merit of applications. Applicants will only be assessed for funding where eligibility can be met.

New to eCommerce and eCommerce Accelerator applications must meet the following eligible criteria: 

  • Be a registered South Australian business including sole-traders, partnerships, company, trusts or incorporated associations
  • Have an ABN which is registered for GST
  • Have a good or service that is export-ready and made in South Australia or are able to show the net benefit from the sale of goods outside of Australia - Refer to Made in SA section for more details
  • Have been actively trading for at least 12 months from date of application
  • Be an existing international exporter with an annual turnover between $100,000 and $20 million
  • Demonstrate revenue from international exports
  • Able to submit your most recent full financial statement
  • Able to commit to the required financial co-contribution (matched funding) if required and provide evidence to support this.
  • Have not received funding from other Commonwealth, State or Local Government programs for the same activity
  • Able to enter into a legally binding funding agreement with the South Australian Government and willing to provide information and data, including financial information as required.


Cluster Project applications must meet the following eligible criteria: 

  • Be a registered South Australian business including sole-traders, partnerships, companies, trusts or incorporated associations
  • Have an ABN which is registered for GST
  • Have been actively trading for at least 12 months from date of application
  • Able to enter into a legally binding Funding Agreement with the South Australian Government and willing to provide information and data, including financial information as required
  • Able to enter into an Agreement with each Cluster Member for you to fulfil your grant and reporting obligations
  • Able to provide letters of support from each Cluster Member in support of the Grant and their ability to provide the matched funding.


In addition to the eligible criteria above, the following requirements apply to Cluster Leads:

  • Engage Members who are existing international exporters and meet the eligibility requirements for Cluster Projects listed above
  • All Members to meet the requirements and definition of a good or service made in South Australia
  • Members Business Name and ABN must be supplied on the application
  • Leads will be required to contract an independent auditor to demonstrate that matched has been funding received and acquitted against the approved activity in the Grant
  • Reporting requirements, terms and conditions and obligations of the Lead with the State Government must be transferred to each Member.

Made in South Australia


Goods are considered ‘made in South Australia’ if the applicant’s manufacturing process:

  • Results in the manufacture of a new product; or
  • Substantially transforms the nature of the materials or components; or
  • Represents an important stage of manufacture of a product created from an imported component.

In addition, goods are considered ‘made in South Australia’ provided that the manufacturing process or operation is not:

  • Designed to circumvent the correct origin of the product; or
  • Simply grading, packing or sorting of imported components.

To be eligible, export goods must be made in South Australia or alternately applicants must show how South Australia would derive a significant net benefit from the sale of the goods outside Australia.

To determine this, the Department for Trade and Investment will take into account whether:

  • The business assets used in making the goods ready for sale (other than assets used in manufacture) are primarily or substantially based in South Australia
  • The activities (other than manufacture) that result in the goods being made ready for sale are primarily or substantially conducted in South Australia
  • A significant proportion of the value of goods is added within South Australia
  • Any sale of the goods generates, or would generate, substantial economic benefits for South Australia, including employment.

The Department assesses all submissions concerning goods not made in South Australia on the individual circumstances, based on the information submitted and the relevant guidelines.

Application process


This is a competitive program that is awarded based on the merit of applications. Applications are to be completed and submitted via the eCAP application form.

Applications need to be submitted prior to the closing date and time, to be considered. Applications will be assessed after the close of each funding round.

Information sought will include:

  • Company name and ABN
  • Number of employees
  • Nature of business/ Industry Sector
  • Current distribution channels
  • Product/services to be sold online
  • Financial statements for the most recent financial year
  • Markets including export markets in which product/services have been sold in the past 5 years
  • Activities for which funding is sought
  • Total funding sought
  • Timeline for expenditure and establishing eCommerce presence
  • Anticipated revenue growth resulting from online sales
  • Cluster Members Business Name and ABN to be supplied on the application.


Merit criteria


Applications will be assessed by a panel under set criteria. The assessment panel will score each application related to the following (in no particular order):

  • Export Sales: Does the applicant clearly outline the impact of the activity on expected export sales?
  • Business: Does the applicant have a sound business model and product or service for cross border eCommerce success?
  • Finances: What is the level of risk related to financial sustainability?
  • Trade Disruptions: Has the business been impacted by trade disruptions and seeking new markets?
  • Proposed eCommerce activity: Are the proposed activities achievable, robust, specific, viable, sustainable and logical? Is market selection appropriate?
  • Previous Grants: Has the applicant applied for funding previously? Does the applicant have outstanding obligations with the Department?
  • Benefit to South Australia: Are South Australian jobs made/retained? How much export revenue will be generated etc?

Outcomes to be achieved


Applicants will need to demonstrate the Grant has helped achieved one or more of the following outcomes

  • Increase in cross border eCommerce sales
  • Exporting to New Markets
  • Increase in International customers
  • Increase employment in South Australia
  • New Agent or Distribution agreements.

Supporting documentation


Each application will require the following mandatory supporting documentation to be uploaded at the time of submission:

  • General Purpose Financial Statements for the most recent financial year including (but not limited to):
    • Statement of Financial Position (or Balance Sheet) complying with the relevant Australian account standards.
    • Statement of Financial Performance (or Profit and Loss) complying with the relevant Australian account standards.
  • Cluster Project applications will need to provide signed letters of support for each Cluster Member confirming their participation on the Project and commitment to provide matched funding.

Application assessment


All submissions will be assessed on a competitive basis by an assessment panel. All applications received are assessed against the program eligibility and merit criteria.

Applicants should note that irrespective of eligibility and merit, there is no guarantee that an offer of funding will be made.

Confidentiality


The Department for Trade and Investment is obliged to publish names of grant recipients and grant amounts for various purposes, including public disclosure.  Apart from these details, the financial and commercial information pertaining to or in an application for funding under eCAP will be, subject to the application of the Freedom of Information Act 1991 (SA), kept strictly confidential. Any information given on an application or subsequent report or survey will only be reported as part of aggregated data that does not identify any individual responses or companies, unless otherwise permitted in writing by companies. Businesses may be invited to participate in promotional activity.

The Department for Trade and Investment may disclose confidential information without the consent of the grant recipients where it is a disclosure where the law (including Freedom of Information Act 1991 (SA)) requires the Department for Trade and Investment to make.  

Decision process


Decisions to offer grants to applicants are made considering the:

  • Recommendations of the eCAP Assessment Panel
  • Availability of funding based on commitments of program funds in the current and future financial years.

Final decisions on funding rest with the Minister for Trade and Investment (Minister) delegate.

Applicants will be advised in writing whether their application was successful.

Payments


To receive initial grant funds, a successful applicant must enter into a written Funding Agreement with the South Australian Government.

The offer of a grant lapses if a funding agreement has not been entered into within the grant acceptance period (usually 10 business days) of the applicant being offered a grant by the Department for Trade and Investment.

Successful applicants will be required to provide:

  • Evidence if matched funding 
  • A valid tax invoice for 85 per cent of the approved grant amount

Final payment, representing 15 per cent of the grant amount approved, will be made after submission of final reporting and financial acquittal documents (as detailed in the grant) have been approved by the Minister.

The funding period will be specified in the funding agreement and will generally be 12 months. If, at the end of the funding period, the recipient has not expended or reported on all of the grant for approved activities, then the recipient must notify the Minister of the unexpended amount and must repay that amount to the Minister within 14 days after the end of the funding period, unless the Minister agrees otherwise.

Reporting


Successful Applicants will be required to provide the Department for Trade and Investment with a six month progress report and final report to outline the outcomes achieved as a result of funding.

Successful Applicants may be required to participate in a survey within six month of acquitting grant funding, advising estimates of export revenues received as a result of the grant funding.

Successful Applicants are also required to submit an acquittal for the grant received and funded activities undertaken, using Schedule 1 to Treasurer’s Instruction 15, by the date listed in the agreement. Failure to submit the acquittal will result in the final payment not being paid.

Varying the agreement


The Department for Trade and Investment recognises that unexpected circumstances may occur in plans to develop and leverage an online sales presence. Any such changes should be discussed as soon as possible with the eCAP Program Officer, as this may risk breaching the funding agreement. The Program Officer will advise whether a formal variation to the agreement is required.

No extensions to the agreement end date will be made, under any circumstances.

Taxation


Grant amounts may be subject to GST. Grant amounts referred to in the program guidelines, application form and funding agreements are GST exclusive.

Receipt of grant funding from the eCAP grant may have taxation implications. Applicants should seek independent taxation advice regarding the potential taxation implications of receiving an eCAP grant.