Small but Mighty: How New Zealand’s Thriving e-commerce Industry goes from Strength to Strength

01 April, 2019

According to the World Bank, New Zealand is ranked as the easiest country to do business in. Flexibility in licencing and light-touch regulatory frameworks create a welcoming environment for entrepreneurs and foreign investors alike. With a GDP of USD 186.4 billion and strong primary, manufacturing and service industries, New Zealand is a wealthy and growth driven nation which shares close cultural ties with the UK and a common language. Although the entire country’s population is almost half the size of London’s, it has been identified as a very lucrative market by some of the worlds biggest companies and should be on your radar, too.

New Zealand’s online buying habits

The New Zealand e-commerce industry was worth NZD 4.2 billion in 2018 according to one report. 57% of consumers stated that they prefer a combined experience of shopping both in-store and online – this trend continues to dominate currently. The same report also identified that Kiwi’s online shopping judgements were more closely aligned with those of British consumers rather than their Australian neighbours – a positive observation for British businesses who already have a thorough understanding of their home market.

When shopping online, New Zealanders are looking for a few key factors:

  • Quality
  • Security of payment portals
  • The legitimacy of the vendor
  • Easy returns process
  • Fast and efficient delivery

New Zealanders are interested in “buy now, pay later” finance options, while a large number of shoppers are also happy to pay using credit cards or intermediaries such as Paypal. Consumers are drawn to sites that offer instant satisfaction by way of lenient payment methods and fast delivery.

As with most developed countries, the holiday season is a very intense period for e-commerce retailers requiring businesses to have strong inventory systems in place. This means that your organisation needs the facilities to deliver goods efficiently during peak times with minimal disruption to stock availability in order to profit from seasonal trends.

Over half of the e-commerce market is dominated by females (51%) many of whom live in metropolitan areas, something to consider not only from a marketing perspective but also in terms of what this will mean for your method of delivery.

Differentiating from competitors is crucial as New Zealanders are looking for variety and broader ranges of products than what is currently available. International retailers are flocking to cash in on the demand; 2019 will see H&M opening its third store in the country while Ikea will open its first store location in Auckland.

E-commerce buying in New Zealand

Kiwis are quite happy to purchase from overseas vendors: spending on off-shore sites is increasing by 23% annually. Domestic stores still have a substantial advantage over the consumer base, however, with a 12% increase in spending reported in 2018, although strong contenders like Amazon are muscling in when it comes to entertainment media.

Businesses should also be aware that the government is proposing Goods and Service Tax (GST) charges on imported items to safeguard local online retailers – this could force foreign sellers to increase prices. To prevent this cost being passed on to the consumer, you should look at minimising overheads by partnering with a reliable courier. New Zealand’s size gives local vendors the upper hand when it comes to quick delivery services, adding to the reasons why cross-border e-commerce sellers should not underestimate the importance of a reliable inland delivery service.

Sellers looking to serve this market should not underestimate the importance of privacy and personal data security as the country is due to join World Trade Organisation negotiations to establish the parameters for overarching cross-border e-commerce rules that will apply globally. Offering safe and recognisable payment methods that are easy to use on mobile and desktop devices is critical for your success in this market.

With a well mapped out strategy, a thorough understanding of the market, and the right partners, your business could be the next big thing in New Zealand. 2019 is the perfect year to start exploring this market and taking advantage of the huge potential that is yet to be uncovered.