CITC Export Guide to New Zealand

Welcome to the Land of Milk and Honey

New Zealand is a country far, far away, with a quite limited market (no wonder, with only 5% of its population being human). But let’s look on the bright side: its isolated geographical location also means an easier access to the Pacific Island market, and its size makes it an excellent trial market for companies who want to test new products. More importantly, New Zealand relies heavily on international trade and the free-market economic reforms put in place in the 1980s have removed many barriers to imports, end most subsidies, and helped implement rules designed to encourage productive foreign investment.

New Zealand has one of the most open market economies in the world, delivering key benefits to investors including transparent regulations and a low-rate tax regime for long-term investors. Its taxation system is business-friendly for foreign investments, but also R&D and capital development. The country has a stable political and economic environment, low level of corruption, modern infrastructure, and a highly educated and multi-skilled workforce.

In this guide, we will guide you through the process of reaching New Zealand’s consumers, successfully making sales on ecommerce channels, and getting your products to reach the desired consumers.

Trade Data

Marketing

Shoppers

The highest percentages of online shopping adoption is taking place with teenagers and people in their twenties. These demographics typically have lower disposable income than people in their 30s, 40s and 50s and therefore the impact is yet to be truly felt.

Social Media

Most New Zealand organizations have a social media presence – social media is a phenomenon in New Zealand. Facebook is the most popular social media forum, and within Facebook, FMCG Food, Retail, Services, Fashion and Beverages are the top industry sectors. The top Facebook and Twitter brand is Air New Zealand.

Major Shopping categories

Travel is the lead eCommerce purchase. Other popular online purchases include women’s and men’s clothing, entertainment, fast food, books/eBooks, and music downloads.

Major Retail Holidays

The lead-up to Christmas is the busiest period for local online shoppers. Christmas-day uploads on TradeMe (unwanted gifts), Boxing Day (December 26) and Valentine’s Day (February 14) are also major “buying holidays.”

Singles Day (11/11) is gaining more recognition in New Zealand. A few New Zealand companies are actively using live streaming technology and social media to achieve marketing success on China’s Singles Day.

eCommerce & Technology

Domestic and Preferred Card Schemes

The most commonly known are Visa, Mastercard, Diners and American Express. There are two fees that you should be aware of when considering offering credit card. Your bank will charge you a Merchant Service Fee (or MSF), typically a percentage of the transaction value – anywhere from 1 – 6%, (but likely to be around 4% for a startup business in a low risk business category), and your gateway will charge you a per transaction fee as well

Alternative Payment Methods

Payment Gateways – these connect all participants in a transaction together, i.e the merchant (you), the issuing bank (the bank that issued the card to your customer), the acquiring bank (your bank that issued you with a Merchant Account) and the credit card schemes.

The common Payment Gateways in New Zealand are DPS Payment Express, Paystation, Flo2cash and IP Payments. There are also new entrants such as Swipe that provide a complete service so you don’t need a separate relationship with a bank – i.e you get one fee per transaction that incorporates the MSF and gateway fee. Confusing, I know! The main New Zealand banks often have a branded Gateway offering e.g. BNZ Buyline or ANZ eGate. Often the banks’ offering is simply while labelled from one of the Payment Gateway providers, meaning the bank uses their system but put their branding on it.

Mobile Appetite

51% of smartphone users have used their smartphone to locate stores, 31% to compare prices.

8% of New Zealand Internet users aged between 15 and 65 have purchased physical goods online during the last 12 months via a smartphone, whereas 18% have purchased via a tablet.

Total spend value: NZD 2.8 billion.

Mobile Operating Systems – Android is the preferred mobile operating system in New Zealand at 64%.

Other Payment Methods

Flo2Cash provides credit card services to enable merchants in receiving their payments as easily as possible, whether it be over a landline phone, internet or your mobile phone. All transactions are processed in real time. Like Swipe they’re able to offer a bundled service negating the need for a facility from a bank.

Specialized payment technologies development for eCommerce entrepreneurships as a Paymark Certified Solutions Provider, PayStation is there to help you find the right payment solution for you and your customers. They support internet credit card payment through the following banks: ANZ, ASB, Bank of New Zealand and Westpac. Paystation was recently purchased by Trade Me.

DPS is a well known credit card/payment gateway provider in New Zealand. It offers a range of services including merchant hosted and non-hosted options as well as a simple manual credit card processing facility

Local Entities & Mobile Payments

Semble reckons Kiwis are ready for the next step: making loyalty cards and vouchers available via mobile wallet, which Apple Pay in the US is currently offering to its customers. It says Kiwis are ready for this because smartphones play a big part in their lives. Over three quarters (77 percent) of New Zealanders own a smartphone and 69 percent of those owners are using business or banking apps, which is an easy transition into using a mobile wallet.

Shipping & Logistics

Infrastructure

New Zealand’s transport infrastructure is generally well developed, and compares favourably with other developed countries. They have good road and rail networks that link well to their air and sea ports. They have a transport network that includes:

  • 11,000 km of State highways
  • 80,000 km of local roads
  • 7 international airports
  • 28 regional airports with scheduled services
  • 4,000 km of rail track
  • 14 exporting sea ports

The recent earthquakes in Canterbury have reinforced the need to ensure that our transport infrastructure is resilient. Transport is a lifeline utility. Disruptions can have serious consequences for businesses and communities.

The concept of resilience is wider than natural disasters. It covers the capacity of public, private and civic sectors to:

  • withstand disruption
  • absorb disturbance
  • act effectively in a crisis
  • adapt to changing conditions, including climate change
  • grow over time

However, there are also congestion and pressure points within our networks which we are working to address. Alongside that, the freight task has been projected to double by 2040. Any level of significant growth in the freight task will have an impact on the transport modes and how they contribute to the movement of our goods.

Import Duties

Most tariffs range from zero to 10%. These duty rates apply mostly to clothing, footwear, and carpeting. Most passenger vehicles and almost all computer software and hardware enter tariff-free. Alcoholic beverages (including beer, wine, and spirits), tobacco products, and some petroleum products are subject to excise duties that also apply to similar items that are produced domestically.

All imported goods are liable to a 15% Goods and Service Tax (GST). This tax is payable on the sum of the Customs value of the goods, any Customs duty payable thereon, and freight and insurance costs incurred in transporting the goods to New Zealand. The government implements an import transaction fee of NZ$18 on every commercial import that has a duty and/or liability of NZ$50 or more. The fee is not charged on private import declarations for goods valued under NZ$1,000.