Opportunities for Australian Businesses in The New Zealand Market
. 22 Jun 2022 . 4 min read
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For Australian brands breaking into the New Zealand market there is incredible potential. The share of online spending on overseas retailers is 45%, with overseas outlets potentially overtaking local online retailers in online sales within New Zealand.
Since New Zealand is a smaller nation, with roughly 5 million people, there tend to be fewer options locally for some industries. Australia, with more major cities, a much larger population and a more competitive business environment has more variety and a greater range which, when these options ship to NZ, benefits Kiwi consumers.
51% of New Zealanders have minimal or no trust in online retailers, so building trust with customers will be paramount to any Australian retailer that wishes to tap into this neighbouring market. Loyalty programs, showcasing product ratings and placing reviews front & centre boosts consumer confidence and are highly valuable and vital aspects of selling online.
New Zealand customers will be turned off a brand, or lose trust, due to:
In fact, 74% of New Zealanders agree the behaviour of a company is just as important as what the company sells so being an ethical company also matters – not just having a great product.
It’s important for us to mention the fact that Kiwis are increasingly turning to local shopping to support the economy after lockdowns, which is a great thing domestically. For Australian brands that sell something that may be widely available within the local NZ market already, it may be more difficult to cut through. However, as mentioned above, in some industries there are limited options for Kiwis. They may not find a local store that sells the style of dress they are looking for and may turn to an Australian boutique that offers free shipping to NZ. Likewise, they may be searching for a very specific high quality natural product and struggle to find it locally, so they will turn to Australia to see if they can have it shipped. If they have a positive experience, they become loyal customers.
Likewise, if they cannot find particular food (long-lasting) prices locally, or those food prices are jacked up because of lack of local competition, those customers may find those products on Amazon or from an Australian stockist instead for a better price (think tea, powders, dried products etc.). In fact, many prices for food-type items or health products tend to be cheaper in Australia as the market is more competitive. In New Zealand, where there may be a lack of competition, some companies will exponentially increase their prices. Our New Zealand-based team member found a tea on Amazon Australia for $17 that was $30 from a local kiwi stockist. For this reason alone, many Kiwis may find themselves checking Australian prices to compare their options.
One of the largest barriers to entry is shipping prices. Consumers don’t like to pay for shipping with most preferring to pay a slightly higher price on the product but to receive free shipping. There are various shipping providers within both New Zealand and Australia, many of which have seamless integrations with Shopify, Neto, NZPost, etc.,
From what our team has witnessed, a couple of industries that have the greatest competitive advantage in the New Zealand market are:
We have staff in New Zealand and have been growing within the market. One thing we can anecdotally confirm is that many Kiwis (before covid) would jump onto a plane and travel to Melbourne for a weekend to shop. They would jump across the ditch with a mostly empty suitcase just for a shopping spree because many Kiwis feel the options in Australia are better (and there’s definitely more variety!). While that habit of heading to Melbourne or Brisbane for a shopping spree practically ceased back in 2020 & 2021, those retailers can still reach their New Zealand customers and find new ones thanks to online shopping. Whether we see Kiwis flying to Aus for their fashion needs in 2022 is not entirely known yet.
Natural health & wellness products can be competitive depending on what the product is. For example, New Zealand is known for certain herbal products and for those there is no shortage. However, there are some health & wellness products that Kiwis lack options for and these products are where you will often see price hikes.
Other Industries & Sectors Have Opportunities Too!
There are definitely opportunities for other brands & sectors as well, but these are two types of businesses that can generally offer free or affordable shipping rates due to smaller/lighter parcels and can be beneficial to the local market. A great opportunity also lies with brands that sell a product that’s not available within the local NZ market at all, or where there’s a bit of a monopoly with only one stockist or brand selling a type of product.
How to break into the New Zealand market?
We’d be foolish to give away all of our strategy in a blog post. Fill out an enquiry form and chat to our team in a non-obligation discovery call to learn more about breaking into the New Zealand market.
