Source: Radio New Zealand
Online retailers are probably falling victim to New Zealanders’ desire for even cheaper online bargains. Nikos Pekiaridis / NurPhoto via AFP
Sites such as GrabOne and NZSale are probably falling victim to New Zealanders’ desire for even cheaper online bargains, and the “Temu effect”.
NZSale closed for business in New Zealand on Sunday. GrabOne went into liquidation last month, citing financial constraints.
Chris Wilkinson, a retail consultant at First Retail Group, said there were a few reasons why they had not lasted.
“Back when [NZSale] started, we didn’t really have any of the Temus of this world, we didn’t have AliExpress at such scale, we certainly didn’t have Shein. It’s interesting that a lot of products that they’ve had for sale are from businesses that have disappeared on the world market, like Jack Wills, one of the clothing brands from the UK.
“Whether they’ve got this redundant stock or have been able to tap into redundant stock, the challenges around that in a global market are very difficult. We’ve now got the likes of The Outlet filling a gap that possibly none of us realised was there, even.”
He said everything would have a lifespan and NZSale might have reached the end of its. “People start to disengage. In the past where they’ve been able to get unique products at headline prices that was the thing that differentiated them. These days it’s more difficult to do that because there are just so many other competing channels for consumers.”
Movements in the New Zealand dollar could also affect competitiveness, he said.
Temu and AliExpress had become entrenched as new retail channels, he said. “They’re very, very strong in the market.”
Even online retail giants ASOS and Boohoo had been affected by the changes, he said. “ASOS and Boohoo were succeeding because they had free freight into New Zealand, they were able to sell very competitively… then over a period of time they moved more and more into their own brand products away from the brands people were craving. One of the biggest challenges they’ve had is the fact that their product may be no different from any other type of fast fashion that you could get on the high street or in the malls of New Zealand, and often at a more competitive price, too.”
Chris Wilkinson, a retail consultant at First Retail Group. Supplied
Gareth Kiernan, chief forecaster at Infometrics, said Stats NZ data showing the growth in “low-value imports” coming into the country indicated the increasing dominance of platforms such as Temu.
He said there was a wave of growth between 2003 and 2006 which lifted the proportion of total householding spending on this type of import from 0.1 percent to 0.9 percent.
“This growth was probably underpinned by the early shift in retailing towards online, giving people some access to products overseas that they might not be able to buy in NZ – eBay also probably played a role in this access.”
There was then a dip until 2011 when the proportion grew again through to 2020, up to 1.2 percent of spending.
“There will be general growth in online retailing during this period, but I’d also expect AliExpress to be a key contributor, as well as popular sites like Book Depository and ASOS to have contributed to this trend.”
He said it had stayed at about that level since but the volume being bought had increased a lot over the last 10 or 15 years.
“In other words, we’re not really spending a massively larger amount of money on buying stuff from overseas, but we’re getting a lot more for that money. The volume proportion grew from 0.5 percent in 2011 to 2 percent by 2022 before taking a bit of a breather, and then since 2023 it’s lifted from 1.8 percent to 2.8 percent. The initial surge fits with cheaper products being available from the kinds of stores I mentioned, and the latter increase is likely to be the Temu effect.”
Wilkinson said younger shoppers in particular were still keen on brands, but they were often going to secondhand shops to find them.
Sign up for Money with Susan Edmunds, a weekly newsletter covering all the things that affect how we make, spend and invest money.
– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
