Expanding to New Zealand: Lessons from three Australian businesses
A shared language, similar cultures and close Trans-Tasman relations make it easy for Australia businesses to ship to New Zealand. Three businesses share what they learnt by expanding there.
Video: A man in a black T-shirt sits in trendy display room.
Text: Rob Rand, Founder of KNOBBY.
Video: Male and female mannequins wear underwear printed with a wide range of colourful designs. Text onscreen reads, "Growing you business in NZ. KNOBBY."
ROB: My name's Rob Rand and I am the founder and CEO of KNOBBY Underwear. KNOBBY is a subscription underwear club.
Video: On a laptop screen colourful dots appear all over maps of Australia and New Zealand. Rob works with a young man and woman. They all wear black T-shirts. On a computer screen, a map of New Zealand lands on the word KNOBBY, smashing it. Men model jaunty underwear.
ROB: International markets have been a big part of what KNOBBY is. The most important market to us at the moment is our New Zealand market, the reason being is it's just basically an extension of Australia. We find it so much easier with our marketing, just our general communication, our branding, even small things like time zones and seasons. It just syncs in really well with Australia and also our team here at KNOBBY.
Video: Employees pack postage envelopes. Neatly stacked mail crates have the Australia Post logo. Rob and a man work on a computer.
ROB: I feel that New Zealand, it's often overlooked as being a good market to launch into. I think people are sometimes maybe concerned by its size, but for KNOBBY, New Zealand is probably around about a 30% make-up of our overall customer base, so it is really important to us.
Video: Designer postage bags are placed in an Australia Post crate. A woman works in a lounge area. A cap has a KNOBBY badge. A smiling employee holds up undies.
ROB: We love engaging with our New Zealand customers. We find that they really resonate with our fun brand. They love to kind of give their bit as well on social media and then, against the Aussies, sort of take the mickey out of each other, which is a lot of fun, but it's all just in good humour.
Video: An employee holds up men's shorts that have the white fern on the legs. Black women's underwear is decorated with a white fern.
ROB: We do a lot to make New Zealanders feel special and a big part of the brand as well. We even developed a New Zealand special edition. We were recently in Auckland for an event we held at Mt Smart Stadium there. It was great just to actually be there, listen to our customers, and even just see the brand out in the real world. It was quite amazing.
Video: Employees prepare packages. Australia Post crates and mail bags are arranged around their work area. Employees help load mail into an Australia Post van. It drives away.
ROB: Australia Post has helped us significantly to launch and to continue to grow into New Zealand. They can order something online and receive it within a couple of days later - you know, very similar to what we would do domestically within Australia - and that, in all, just heightens the whole customer experience.
Video: The Australia Post logo appears on a white background.
For a country small in size and population, New Zealand’s online consumer spending is significant, with cross-border retail sales estimating USD1.12 billion in 2017. But what makes New Zealand most appealing is how easy it is to do business with.
For the second year in a row, the World Bank ranked New Zealand as the top country in this category – making it a destination with rich growth opportunities for Australian businesses that have the benefit of being so close.
While we share similarities with our New Zealand neighbours, there are still key differences between both markets. Three Australian businesses that have successfully expanded to New Zealand share what they’ve learned.
Always test new waters
Testing a new market is essential before you invest too heavily in an international expansion. New Zealanders’ love for online shopping is growing (PDF 3.2MB) and marketplaces are a great place for Australian businesses to dip their toes in the water before going all in. Trade Me, Amazon and eBay are the most popular sites across the ditch – with fashion, variety store purchases, and health and beauty, and books as some of the most popular items (PDF 6.3MB).
Australian beach towel brand Dock & Bay used popular Australian online marketplace The Iconic as a testing platform for the New Zealand market. “This was a great first stepping stone for us,” says Ben Muller, founder of Dock & Bay. “It allowed us to test product demand and then expand from that base.”
Rob Rand, founder of Australian underwear subscription company, Knobby agrees. “New Zealand is almost an extension of Australia. We have the same seasons, similar time zones and we’re culturally very close. We find it’s great for testing new products.”
When it comes to sending overseas and achieving the coveted overnight shipping goal, the Knobby team says research is key. As Rob explains, “It’s those extra hurdles that international shipping brings. Learn about shipping through customs, international trademarking and work out the best packaging to use for your product to get to its destination safely. These are all the things that will contribute towards efficient delivery.”
Dock and Bay founders, Ben Muller (L) and Andy Jefferies (R)
Create great international customer experiences
One clear advantage of the closeness between Australia and New Zealand is that sellers can promise quick delivery times, which in the increasingly competitive online selling environment, is something consumers demand.
New Zealand was Knobby’s first choice for overseas expansion, and it has provided the business with exceptional growth. Rob says it was Australia Post’s international shipping solution that made their decision to expand to New Zealand a no-brainer.
“We could ship our product quickly, which made it so much easier to create a better customer experience. That did such great things for our brand.”
Another way to build trust and create personalised experiences for overseas markets is through web customisation by tailoring the online experience for each country. Jonathon Ladmore, founder of online toy store, Crayons has made this a priority for his business.
“It’s important to us to create a multi-country website. We want our New Zealand customers to feel valued and it’s simple things like displaying prices in their local currency that go a long way towards that.” he says.
“We also set realistic shipping expectations for our consumers by making it clear we’re based in Australia and not in New Zealand. Some companies can be misleading this way, which leads to a disappointed customer waiting longer than anticipated for their delivery.”
As fast, cost-effective shipping is a priority for Crayons, they’ve made strategic decisions in working with Australia Post and using its shipping services to decide which products to market and send to New Zealand. Jonathan says, “We only offer products under 10kg to our New Zealand customers. What this means for us is that there’s less risk of delay and limits shipping costs.”
Crayons founder, Jonathan Ladmore
On-the-ground brand ambassadors and partnerships
New Zealand buyers now make up roughly 10% of Dock & Bay’s Australia-New Zealand market, and they credit this to their local distributors. Ben says, “It’s great to have market experts working to sell our brand. They can access different markets and have retail relationships we would never otherwise have exposure to.”
Ben adds that another benefit is receiving expert feedback from distributors on what the market wants. “They’ll let us know if customers have requested particular products – or make suggestions on colours that would work well in their market. It’s those little insights that can go a really long way in growing your customer base.”
Knobby also listens closely to feedback from their New Zealand customers. So when they demanded a New Zealand-specific design, Knobby swiftly responded. “This design was so popular that we’re now in our second version. It’s sold out every time!”
New Zealand currently makes up about 30% of Knobby’s overall customer base. A strong ambassador program has also helped them with localised marketing.
“We have a number of ambassadors and influencers who produce content for us that promotes the brand to their Kiwi audience,” says Rob. “Their understanding of the local landscape and in-jokes helps us resonate with that market and make for more personalised marketing to that audience.”
New Zealand offers a great opportunity for growing Australian businesses – so start thinking about your potential entry points. Is there a local influencer you know would love your product? Or a marketplace that sells similar products but you know yours is better? With some strategic research and a little risk-taking, you may soon find your business flourishing there too.