Rich Pickings Seen In Nacent E-Zealand

Wednesday, 23 February 2000, 10:41 pm
Article: Alastair Thompson

US Internet entrepreneur Guy Cook met E-Force founder and CEO Mark Fulton in Colorado. He also met his wife there. Now he is back in NZ as a key member of the board of the latest New Zelaand e-commerce venture - formerly Paynter timber - now - E-Force.

Cook, a tall, exceedingly charming American, uses the word "play" to describe what the latest New Zealand E-Commerce vehicle will be trying to do.

At the press and broker briefing Cook repeatedly says that the company plans to "aggressively manage its share price". To the audience this probably sounded like it might be illegal - but to Cook this is the standard lingo - and in truth we are probably simply naieve.

The ideas behind e-forece are not unique - the intention - like http://flyingpig.co.nz is to be an e-commerce site and "portal". The unusual aspects of eforce are, Cook says, all in the execution.

The key plan in E-force's "play" is to acquire a position as a key e-commerce online brand for NZ consumers, and to do it quickly. In its plan to do this it has adopted a new and, it says, unique approach.

It even has a new word for it. The word "infomediary".The idea is not to sell stuff but to be the place consumers come to find places to buy stuff and to offer discounts negotiated by eforce with the traditional e-retailers. E-force will thereby make e-commerce accessible, easy and worthwhile to it's "members".

E-force will not attempt to sell anything - initially anyway - but rather plans to simply attract members. In this quest it has decided to adopt a series of the best tactics it can glean from e-commerce plays in other markets.

Like flyingpig.co.nz the window of opportunity for E-force is seen in the fact that New Zealand has a highly connected population, with 34% of the overall population with internet access - and growing fast - but, so far anyway, with very little e-commerce activity.

The theory is that while NZers have taken to eftpos like no other nation on earth, e-commerce is still in its infancy here whereas in the US it has expanded to a multi-billion industry. Americans are not a lot more connected than NZers - they have just been connected for longer.

In Guy Cook's world NZ's adoption of e-buying by NZ consumers is inevitable, and whoever is driving it will be making money. Thus there are potentially rich pickings in an e-Zealand for the smart.

This in Cook speak is called "first-mover advantage", meaning who ever gets in first gets to keep the baby. Once net users - potential members - start using something and liking it they are slow to migrate. This tendency has long been shown among net users. Ask yourself how many of the readers of this article have read something else on Scoop today? This week? Or if you found this through a search engine is it one you use lots or just sometimes.

Eforce's tactics can be discerned through its first product offerings. It plans to be both the e-consumers friend and guide. It will become a peculiar new breed of company both commercial and consumer friendly. It will be out to get the best for its members as that is essentially its market niche, facilitation.

The first four products it plans to offer show the general idea - but in principle there are no limits and it would appear that E-force plans to develop new ideas as soon as it has them.

The first product to be offered will be a service designed to make switching power companies easy.

E-Force tells you who has the cheapest power in your area and then directs you to a power company to start the switch in action. On the way it earns money from the power companies - "bounties" - you get cheaper power. Everybody wins.

As power companies usually have too much money to spend on website development and almost no ability to understand how to attract traffic to them this seems not a bad idea at first look from this Scoops' perspective anyway.

There are also obviously a few other industries, telecommunications, ISP service providers in which the same principle can be applied if it works.

Also on the net near you soon will be Co-buy. Co-buy is a product which allows you to group together with other E-force "members" who want to buy the same appliance - say a TV - and then buy five instead of one and get a discount on the way. The idea like the power-switching idea has eforce collecting a commission along the way from the supplier - in this case the retailer.

Then there is Freightlink - which enables you to buy stuff in the US at US mail rates and then get it freighted for free from LA to NZ. By consolidating regular bulk shipments E-force plans to pay shipment - airfreight 7 to ten days delivery - costs out of the commissions it earns from the online retailers. Initially the service is offered for Amazon.com, but again the potential for the idea is kind of limitless.

Finally E-force will be launching with Subscribenow - a service which allows you to subscribe to as many periodicals as you might want to - at a discount to eforce members - in the same place.

Of course the success of all these ideas requires one key ingredient - "members" - lots of them. And this is where the execution Cook places so much importance on comes into play.

The obvious tricks - mainstream media advertising - will be employed by E-force (Scoop hopes online advertising will be employed too).

And then there are a few more sophisticated ideas picked up from the best of what others have done on the web.

First there is viral marketing. E-force once it launches in three weeks time will launch with a 100 imacs in 100 days promotion through which it will give away 100 imacs away to people who join up as members in a daily live draw.

Where it gets viral is because after you have joined up and missed out on getting an imac, you naturally want to get back into the draw. And you can.

If you can find a friend to sign up then you can enter the draw again. The mathematics of this are interesting - and result in eforce getting all the members it needs far more sooner than you can say lickitysplit - assuming of course that the punters play ball and really want an imac.

And the way to maximise the chances of winning an imac? Get in quick.

As the company plans to target the student market with its Frieghtlink product - cheap text books from amazon.com - this is undoubtedly another smart idea.

Secondly E-force will employ an idea employed by a few ISPs in the UK recently and in a site aptly named http://myownempire.com.

While membership of e-force will be free - as everything that works on the net seems to be - early members will be given the opportunity to fork out $25 to buy 500 eforce share "warrants". These warrants are in effect stock options.

Again the deal is a no-brainer. The warrants will cost 5 cents initially and have three six-monthly 10 cent calls = total price 35 cents. E-force's present share price - as of Wednesday - was 41 cents. For a a minimal outlay the odds of making $250 or more look quite good. Meanwhile eforce will be "aggressively managing" its stock price - spending lots on PR - to acquire "intellectual capital assets" - smart staff.

One thing can be said for sure about e-force. It will either go off like a bang or not at all. I am planning personally to join. Afterall, I might want to buy a book one day, and I would like an imac.

Meanwhile it seems likely that along the way e-force, Guy Cook, Mark Fulton and his team may teach us a little about how living in E--zealand is going to start looking soon.

© Scoop Media

Alastair Thompson

Scoop Publisher

Alastair Thompson is the co-founder of Scoop. He is of Scottish and Irish extraction and from Wellington, New Zealand. Alastair has 24 years experience in the media, at the Dominion, National Business Review, North & South magazine, Straight Furrow newspaper and online since 1997. He is the winner of several journalism awards for business and investigative work.

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