Macdonald credits locally-focused ambitions help them stay separate from larger international players such as Amazon.
“We ourselves don’t have these big global ambitions, whereas what we’ve found is that these international players are very rational as to how they work. So, the reality is that New Zealand isn’t at the top of their list of priorities. It would be pretty crazy if it was, so I think that gives us an edge, or rather a basis, to compete.
“We will still have to work hard with what we’re doing now around improving functionality. It’ll only be by continuing to be useful that we can stay relevant and be able to grow despite that international competition.”
Amazon has been a topic of conversation among retailers in New Zealand since its announcement of a new Melbourne headquarters this year. The ‘Amazon-apocalypse’ has caused retailers to re-think their strategies to stay on top of the game. Macdonald has credited this ominous arrival to Trade Me’s urgency to grow and improve.
“I personally, and we collectively here, operate with a healthy degree of paranoia. I think it would be dangerous and eventually fatal for us to be complacent. Inherently that means there is a degree of worry, you need to maintain your urgency and I think Facebook and Amazon have been helpful in one sense; helping to galvanise everyone we have here in terms of the work we have got to get done.”
Macdonald spends a chunk of his time each year overseas analysing international markets for his company’s growth. He says inspiration comes from communication with similar companies.
“While there are always things that will be different, there are a bunch of things that will be similar. So, international markets are a big source of inspiration. It even applies to the global players we learn from, like Facebook and Amazon, to hone our offering.”
International retailers, specifically Facebook, provided inspiration for Trade Me’s mobile platform, Macdonald says transferring the desktop directly over to mobile was not seamless enough in its operation.
“It has been a lot of work, there is still a lot of opportunities there for us to take full advantage of all the great things that come with mobile, there is opportunity for us to think more creatively and really look into how people use those devices and the additional utilities, like location awareness, that come with that.”
Although using paranoia as a catalyst for growth against international marketplaces, Macdonald praises Amazon for its ability to grow online retail, both here and globally.
“Amazon is a great business, certainly it has its own strengths and certainly it is making its presence felt here. But the world keeps spinning, and other companies are doing pretty well. If anything, one experience I had overseas that I expect to see here is Amazon will help to grow online retail activity generally. We’re a bit behind the times here, we’d estimate online retail of being around 8 percent of total retail in New Zealand, where in the UK they’re sitting at double around 16 percent.
“That helps to give us perspective - It’s not going to be a scene out of Terminator Two, where Amazon arrives crushing all of our charred skulls into the ground. There is room for us all, and I’m very confident that we can continue to grow and succeed. Having that level of urgency is an important part of us being able to do that.”
Amazon works within a large market sphere, counting as 46 percent of all online retail in the US, according to Business Insider. Yet Macdonald says working in a smaller market has contributed to Trade Me’s success.
“If you go to larger markets, say the US, it’s actually a really complicated market and a lot of things are harder to do because it’s so much larger. Things like payments, different sales tax and all these different things that make it more complicated. The benefit to a smaller market is that they’re simple, and homogeneous which makes it easier to do business and easier to grow in.
“With New Zealand being a small market, we’ve actually got a high function logistics network and it’s not too hard to shift things around the country. We have a really good payments infrastructure here.”