Intro

Driven by 18-39 year olds, the New Zealand and Australia cross-border eCommerce markets are booming and it is looking to continue this way for the coming years. With almost 17 million savvy and highly engaged online shoppers in the region they are a relatively easy destinations for UK retailers looking to expand their overseas market opportunities. There is a cultural fit in consumer habits which is very similar to the UK market and with cross seasonal opportunities that allow for a full trading year on all seasonal products,

Australia

The Australian online market offers access to a dedicated and loyal customer base hungry for international brands. The exchange rate over recent years has helped British products to be more competitive and attract a new generation of online shoppers. To support international commerce and global shoppers, Australian service providers have made significant investments and partnerships to streamline global fulfilment and improve payment processes.

Australians have been early adopters of shopping online internationally, especially in the early part of the decade when the strength of the UK pound meant international retailers were more appealing than their Australian counterparts. Likewise, providing access to a broad range of brands or products that cannot be purchased in Australia will always give UK and European e-commerce a competitive advantage. However, it is still important to note that Australian customers are price-sensitive and UK retailers need to be aware of currency fluctuations and how this affects product pricing on site.

Australian consumers are brand-aware and technology-savvy and follow the global fashion trends that are ever present in the UK market.  Early adopters of technology and devices make Australian consumers some of quickest to adapt to new online product offerings.

  • Key categories: International fashion retailers, CE and toy
  • Australians expect fast and free (or at least low-priced) delivery and free returns as a given and this will play a significant part in whether or not they shop with you
  • Many northern hemisphere retailers will also need to take counter-seasonality into account – both from a product and communications perspective
  • Foreign retailers selling to Australian customers will need to include GST (10% Goods & Services Tax) on most products and delivery from July 2017. This tax is in addition to customs and duty which are charged on orders over $1000.

 

Iconic

After an initial rocky star The Iconic has proven the doubters wrong by increasing its share of the Australian online fashion market five-fold to more than 10 per cent. This has not been done by expanding into new categories or increased spending on digital marketing but by targeting a more profitable market and using digital technology to enhance the shopping experience for customers.

Over the last 4 years they have continued to scale bringing down the overhead costs dramatically and driving up profitability. Higher margins, less markdowns and a more premium offering has helped to attract a customer willing to increase their average order value by over 18% over the last year.

In 2014, The Iconic moved out of categories such as beauty and children’s wear and decided to target fashion-forward, tech-savvy customers aged 25-35 years old, who were prepared to pay full price and appreciated the convenience of three-hour and next day delivery. By focusing on the right kind of customers it allowed for a more focused product assortment targeting the kind of customer in the process increasing their marketing efficiency by reaching out to the segments with a higher propensity to purchase.

Over all the site offers customers, more than 700 brands and over 45,000 products and attracting ten million visits per month. UK fast fashion brands such as Little Mistress and Blue Vanilla and ensured a high level of success by using key fulfilment partners to offer a seamless UK to Australia experience.

 

NZ

New Zealand is a leading economy in the Oceania region, with 86% internet penetration and nearly 2 million online shoppers. eCommerce and its associated technologies have been fully embraced by the local population driving up year on year online sales figures.  Online spending is expected to exceed $5 billion in 2016 with the smartphone penetration level is at a significant 60% and almost 30% of all internet users have purchased through their device.

Shoppers purchasing six or more items in a year has increased by just short of 40% since 2010. 38% of those transactions went offshore with international retailers, as New Zealander’s pursue a wider selection of brands and goods online compared with what is available domestically.

Those international sales are estimated to be worth $1.6 billion. Two-thirds of all online shoppers have made a purchase from an overseas website in the last three months, up from 61% just two years prior. More than 60% of those people said that they couldn’t find the items they were searching for available on a New Zealand retail site.

Online shopping is dominated by the five major categories – airline tickets, fashion, entertainment, accommodation and books. The top brand for Kiwi online shoppers is Trade Me with more than two-in-five (44%) buying from their website. Following Trade Me is Air New Zealand, The Warehouse, Mighty Ape and GrabOne.

Trade Me

Responsible for nearly three quarters of all domestic web traffic, Trade Me has been described as a basic human right for Kiwi’s. Primarily off the back of their strong reputation for safe and trusted online trading. 44% of New Zealand online shoppers made a purchase on Trade Me in the last three months which is over double the penetration of other ecommerce sites operating in the country.

Key advantages:

  • Access to New Zealand’s biggest online community
  • A large domestic supply gaps that exist in numerous product categories makes New Zealand a very attractive ecommerce option
  • International retailers generated $3,000,000 in GMV on Trade me in December 2015 an annual increase of over 88%.

Unlike a lot of other markets around the world Kiwi’s have a one stop shop for sourcing from global retailers. Trade Me is a cultural phenomenon, in a country with a population of 4.7 million they boast an enviable 3.9 million members or 83% of the country’s population.

In terms of other New Zealand regional marketplaces TradeMe has 44% of the market followed by The Warehouse at 22%, Mightly Ape at 21% and Amazon at 20%.

The typical customer profile 76 % between the ages of 25 and 55 with basically an even split per age group between this range. Trade Me’s population mirrors that of the nation given the high percentage of New Zealanders who hold an account.

There are large supply gaps that exist domestically in New Zealand, and this desire for a great range of goods and brands has seen Trade Me increase their international supply. More than 7-in-10 online shoppers (71%) made a purchase from an overseas website in the last three months, up from 66% the previous year.

Conclusion

Over all even if the Australian and New Zealand markets do not hold the overall market potential of an America, the cultural similarities in terms of buyer potential makes them excellent markets for online retailers looking to set solid, and very lucrative, foundations during their international expansion journeys.

 

 

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