With Brexit fast-approaching, now could be a perfect time for UK SMEs to set their sights on trading with countries outside of Europe. Here’s the business case for setting up shop in New Zealand.
Why target New Zealand?
If you are new to exporting, New Zealand might be a surprisingly good place to start. It may be on the other side of the world, but it’s an English-speaking country with great cultural ties to the UK.
According to the Department for International Trade (DIT): “Doing business in New Zealand is very similar to doing business in the UK.
“If your product or service is successful in the UK, there’s a good chance you’ll be successful in New Zealand.” Encouraging words indeed!
It is a relatively small country, going by population (4.6 million compared to 65.6 million in the UK, as of 2016), and its economy is worth around £140 billion (again, 2016). However, while it is not large, it is a developed market – its GDP grew by 3.6% in June 2015 to 2016, one of the strongest growth rates in the developed world.
In fact, the DIT reports that New Zealand is an “excellent test market for niche and high-value products and services”.
Online marketplaces can be a great way for small businesses to crack new territories, as they help make new products discoverable.
Of New Zealand’s online marketplaces, the biggest and most popular is Trade Me, an online auction site that includes a simple five-step launch process for online sellers.
Trade Me receives nearly one million visitors a day, and in 2015 it sold 6.6 million items to more than 4.7 million people – the potential market is huge.
According to Trade Me, over two million New Zealanders shop online, but there is a shortage of products available locally which drives around 38% of transactions offshore.
Those that are able to sell locally are at a distinct advantage – they are able to provide faster shipping and lower prices, and retain that competitive edge.
To help take advantage of this market, WorldFirst has introduced virtual NZD accounts which allow users to trade cost effectively in New Zealand.
By opening an NZD account, users can receive money from customers in New Zealand dollars, and pay suppliers in the local currency – meaning any global business can trade like a local business, minimising costs associated with cross-currency transfers.
For example, an NZD account would enable a business owner to send revenues from Trade Me directly to their account, and then send their funds home.
Overall, although it’s far away, New Zealand may very well be within your reach, after all.
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