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How to sell on global marketplaces

It’s a tale as old as retail itself: small New Zealand retailers growing exponentially and seeking to spread their wings. But despite this country’s affinity with flightless birds, Kiwi retailers are leaving the nest and soaring to great heights – across the ditch and further afield too. Caitlin Salter explains.

By Caitlin Salter | May 29, 2017 | News

One thing is responsible for enabling isolated little New Zealand to punch above its weight on a global market: the internet. With big-ticket retail platforms like Amazon chomping into the global retail landscape, what’s the best way for Kiwi retailers to get a slice of this market?

There’s no one-size-fits-all when it comes to finding the right ecommerce platform to take a retail business global. New Zealander retailers are sampling all sorts of technology to get their brands out to the world.

The online market in New Zealand

Reaching an overseas market has never been as easy as it is now for New Zealand retailers. Having people on the ground all around the world is no longer a prerequisite for finding customers overseas. Of all the platforms available for selling goods, Amazon is the one that has reached unprecedented heights.

Retailers don’t need a warehouse to sell items on global marketplaces, so the overheads are as low as the potential market is high. With more than two million sellers in the US making a living by selling their products through Amazon, it’s easy to see why.

Last year’s McKinsey Global Institute (MGI) report on digital globalisation found tens of millions of SMEs (small and medium-sized enterprises) worldwide have become exporters through marketplaces such as Alibaba, Amazon, eBay, Flipkart and Rakuten. While it found New Zealand lagged behind the overall leaders in the digitization of engagement, it is clear New Zealand is heading in the right direction.

Total online retail spending by New Zealanders was up 16 percent in January 2017 from the previous year, compared to a less than 5 percent growth in physical stores.

Massey University retail management associate professor Jonathan Elms says recognising the change in the retail market is a move some big retailers were late on.

“To some extent, the big retailers in New Zealand have lagged in having a decent online presence. Some have really only developed a good online platform in the last couple of years.

“On the one hand you could argue they’ve been looking to see what’s happening and observing good and bad practice overseas, but maybe they were complacent about the lack of competition.”

The amount of online presence is increasing as the amount of retail competition increases, he says.

Jonathan Elms

Understand the role of social media

When it comes to online platforms, trading websites aren’t the only important tools for getting Kiwi retailers’ consumers around the world. Social media is an increasingly important tool for marketing, particularly for small businesses.

The minimal cost attached to platforms such as Facebook, Twitter, LinkedIn and Instagram make them such an appealing tool for small retailers looking to expand their brand offshore, Elms says.

“Social media can be an enabler for getting a product out there and it can be tailored to what a company is trying to achieve. It used to be quite expensive to set up a website but the routes to market are now much cheaper.”

While the sheer variety of social media platforms makes taking a business overseas cheaper and more convenient than ever, there is a downside. The company’s brand cannot be restrained under the same controls as it can on a regular website – consumers can generate the content too. Reviews – negative and positive – are more visible than ever, and hard to control.

Entrepreneurial consultant James Kemp says social media can be the biggest asset for Kiwi businesses looking to go global.

“Paid social media like Facebook adverts have the largest return on investment and are very accessible even for small retailers.

“Facebook specifically has made markets accessible because previously [Google] Adwords or other digital advertising needed large budgets. Now a retailer can test with a small budget and scale when they see results.”

Build a storefront

Small retailers usually find the most success using platforms like Shopify or Magento, while big retailers tend to use high-cost international products to reach their markets.

Shopify launched in 2006 as an online store to sell snowboard equipment in North America. In the decade since, the brand has developed into a hassle-free platform for others to build their retail businesses, and there are now 377,500 active Shopify stores globally.

With a three-tiered monthly fee system, retailers using the platform can build their own online shop. Features include everything from fraud analysis and discount code capabilities to third-party calculated shipping rates.

And New Zealand retailers of all shapes and sizes have jumped on the Shopify bandwagon. 

Using your ecommerce platform

Designer fashion label Juliette Hogan is mainly sold throughout New Zealand, but through its online store it is effectively penetrating the United States and the United Kingdom.

Its Shopify-built store is connected to the brand’s website, which is an incredibly important part of its business profile – driving international consumers towards the website is key.

“It [the website] is an opportunity to showcase the brand voice as we intended to be seen,” a Juliette Hogan spokeswoman says.

The biggest challenge in reaching international customers for Juliette Hogan is competition in the market, with fashion retail flooded with similarly high-end brands.

The Juliette Hogan label finds its point of difference in its branding and company philosophies.

“We do receive feedback that people are looking for something unique, special and boutique as online continues to give access to so many brands. That is where we find we are cutting through the noise.”

Quickly evolving shipping options is helping make the transition into a global brand smoother, she says. International customers can now receive orders within two days, which is a quick turnaround considering the distance.

Fellow Shopify retailers Kowtow also use the platform to get their product into the global market. The ethical fashion label currently dispatches items all around the world, with the most obscure being Kazakhstan. Online sales currently contribute a third of the label’s total sales.

Kowtow has more than 120 international wholesalers but no branded stores, which makes directing international traffic to the label’s website all the more important.

Stolen Girlfriends Club also uses an ecommerce platform to reach its global customers. The fashion label uses Magento which integrates with its inventory system Cin7.

Currently Stolen Girlfriends Club reaches markets in the United States, Australia, United Kingdom, Japan, Korea, Switzerland, Sweden, France and Canada, with more on the cards.

Creative director Marc Moore says the biggest challenge in trying to reach online markets worldwide is generating brand awareness.

“Creating brand awareness in a country where you aren’t based is definitely a challenge, especially when you don’t have an agent or distributor on the ground to promote and represent our brand.

“The world has become a lot smaller in recent years with the fast growth of online shopping and social media, but it requires a decent marketing spend to promote and target audiences internationally.”
 

Alice Farrell

The small, small business solutions

When a business is still finding its feet, large online platforms aren’t quite the right fit for online retailing. But that doesn’t mean the right platform isn’t out there.

Aucklander Alice Farrell launched her standing desk company Meerkat Desk in 2014 as an affordable alternative to the traditional standing desk.

Farrell runs her entire business online and has clients not just throughout New Zealand, but also in the Pacific Islands, Australia, Italy and Canada. She runs her sales through her WordPress website, which she built with ecommerce plugins to set up an online store. WordPress offers an endless number of plugins to assist with online transactions, including a New Zealand Post plugin, which calculates shipping costs.

“I choose WordPress because they have such a good ecosystem. It’s a huge platform and there are tonnes of plugins and support. As a result of that, there’s heaps of businesses out there that do WordPress developments and they make it easy to do it yourself.”

Farrell says WordPress is the right platform for small retailers because it’s compatible with other small business solutions such as Xero.

As her business grows, she’s starting to investigate larger platforms such as Amazon, but wants to wait until she has a larger catalogue of products to sell. Her hope is that Amazon will be the right fit when she works towards entering the United States market.

“The attraction of Amazon is that it’s such a big platform and it has really good sales and business support. Eventually I could ship my products out of Amazon warehouses and scale my business up that way.

“Going the Amazon route saves the business-owner from having to set up their own systems overseas: they come with a turn-key solution.”

Now that physically reaching the consumers is no longer the problem, the biggest challenge for New Zealand retailers is getting eyeballs on their products, Farrell says.

The big roadblock for online retailing is that some people are wary of purchasing an expensive product before they have actually seen it – in some cases it can be a risky investment. From Farrell’s point of view, her main product, which retails at $25, is a small risk, but many people still enquire about seeing it before they buy.

“Being online makes it very accessible but a lot of people would prefer seeing it in person first. Having a brand people can trust is hugely important to success online.”

Going global online without an online store

Not all retailers need an online store to reach their international market. Cloud-based property management software company Re-Leased doesn’t have a transactional store online, but relies almost exclusively on its website to generate new customers around the world.

Growing steadily since its launch in 2011, Re-Leased now has customers in 12 countries around the world, most of which are served exclusively online. The biggest source of customers to date has been direct enquiries through the Re-Leased website - so directing potential clients towards the site is a top priority.

Head of marketing and partnerships Sam Howie says website content has to resonate with clients, and tailoring the site to different markets is crucial.

“Everything our marketing team does at the moment is to streamline that [online] process and make it as easy as possible for people to enquire about our product.

“We are working on having different content displayed depending on where customers are in the world. In North America, customers see US dollars and North American buildings to connect them to the content.”

Despite being a New Zealand-founded company, Re-Leased models itself as a global company and doesn’t use New Zealand as a selling point. Howie says while the Kiwi-made ideal may resonate with New Zealanders, they don’t need it for leverage on a global stage.

“We consider ourselves a global company. If you tell people in the United Kingdom or the United States that you’re a New Zealand company it might even turn them off.

“Kiwi companies do punch above their weight on the global market because we have to think outside our world in New Zealand.”

Know where to get a helping hand

The Government’s international business development agency, New Zealand Trade and Enterprise (NZTE) assists with about 4000 New Zealand companies looking to reach global markets.

Using the range of services NZTE offers to help companies set off on their exporting journey is often the first step for Kiwi retailers looking to expand.

A range of external advisors, known as ‘beachheads’, are experts in their areas and mentor and provide insights into the realities of growing international businesses. Some advisors specialise in ecommerce and digital marketing to make sure each company finds the Internet path that is right for it.

Competing in the global market can be difficult, especially for small companies, so NZTE provides in-market commentary and insights for businesses about competing globally in the digital marketplace.

In April 2016, NZTE signed a memorandum of understanding with Alibaba, the Chinese cousin of Amazon, which aimed to strengthen working relationships between Alibaba, NZTE and New Zealand exporters.

Alibaba is shaping up to be equally as disruptive to the retail marketplace as its western counterpart. It’s China’s largest retailer and has expanded since its launch in 1999 to other websites, including Taobao and Tmail, which dominate the ecommerce market in China.

But NZTE hopes the new relationship will help the website be a positive force in the retail landscape, allowing retailers to harness its power and reach new customers.

James Kemp

Know where to get a helping hand

The Government’s international business development agency, New Zealand Trade and Enterprise (NZTE) assists with about 4000 New Zealand companies looking to reach global markets.

Using the range of services NZTE offers to help companies set off on their exporting journey is often the first step for Kiwi retailers looking to expand.

A range of external advisors, known as ‘beachheads’, are experts in their areas and mentor and provide insights into the realities of growing international businesses. Some advisors specialise in ecommerce and digital marketing to make sure each company finds the Internet path that is right for it.

Competing in the global market can be difficult, especially for small companies, so NZTE provides in-market commentary and insights for businesses about competing globally in the digital marketplace.

In April 2016, NZTE signed a memorandum of understanding with Alibaba, the Chinese cousin of Amazon, which aimed to strengthen working relationships between Alibaba, NZTE and New Zealand exporters.

Alibaba is shaping up to be equally as disruptive to the retail marketplace as its western counterpart. It’s China’s largest retailer and has expanded since its launch in 1999 to other websites, including Taobao and Tmail, which dominate the ecommerce market in China.

But NZTE hopes the new relationship will help the website be a positive force in the retail landscape, allowing retailers to harness its power and reach new customers.

Rod McDonald

When online doesn’t fit

Of course, online retailing doesn’t work for every product. A well-established sales practice, such as the wine business, has to look beyond an internet storefront.

Hawkes Bay business Rod McDonald Wines was launched in 2012 by winemaker Rod McDonald. Since its launch, the business has grown into markets in Australia, the United States, Southeast Asia and the United Kingdom.

When it comes to selling wine, each new country poses a new challenge, and rather than whacking the product online, representatives from the company usually need to visit each country, front the distributors and sell the story of the wine.

McDonald does his homework before launching in a new market and says doing market research and figuring out how the market works is a process that has to take place for each country.

“There’s not just one rule you can apply for the world – every market has its subtleties.”

While the United States has a three-tier system, distributors in the United Kingdom import directly so the market can be easier to break into. In China it’s a case of business-to-consumer trading so it’s not a traditional distributor-to-retailers model.

The other key feature of getting a Kiwi business functioning well overseas is educating the overseas consumers on the New Zealand product.

New Zealand has a great reputation overseas, and because the local market is so small and highly competitive, looking outward towards international consumers is a natural growth path for most companies. But some countries, such as China, need to learn not just the value of New Zealand wine, but also that wine itself is a premium beverage.

“All the growth opportunity is overseas and there’s plenty of room there. You don’t have to nudge out a New Zealand producer to sell more wine, you just have to find more people to sell it to.”

McDonald’s business does have an online presence, but the majority of the online transactions are domestic sales, although they do work with partners overseas that have strong online businesses.

Working with NZTE has helped Rod McDonald wines gather important market intelligence, and the resources available have been a huge part in the company’s success overseas, McDonald says. 

Find the right route to market

When Kiwi retailers set their sights on the global marketplace, there’s not one perfect route to lead them to success. Online platforms have brought the world closer to New Zealand, but it still takes a smart marketing strategy to build enough brand awareness to drown out the competition.

Through consultation within their companies and with business accelerators, Kiwi retailers are finding the ecommerce solutions that work for their brands, pushing great New Zealand products to markets all around the world.

​ ​

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