NZ Retailers want an even playing field
NZ Retailers want an even playing field as online ‘mega-players’ threaten
Amazon recently announced plans to open its first warehouse in Australia. Based in Melbourne, the location will offer New Zealand consumers a much closer delivery point.
Amazon, and many other similar large scale operations which manufacture in bulk, export their goods to New Zealand tax free, putting enormous pressure on local retailers who must offer competitive pricing.
Compounding the issue is the fact that these overseas companies do not have to charge GST for items that are below $400.
Veteran retailer Eric Faesenkloet of Golf Warehouse believes the system needs to be made fairer so that home grown businesses can compete and survive.
"It's not by chance that a number of clothing retailers in NZ are folding - it's [not] that they're doing anything wrong in a retail sense, it's loop holes the Government has allowed ... in the tax system," he said.
Even if NZ retailers are able to find a way to compete with the pricing offered by these bulk retailers, they will still have to charge 15% more due to the GST loophole.
"The tax department at some point has to make a call on it because New Zealand retail, particularly businesses that sell products below $400, are going to be seriously affected."
Emma Lou, founder of Towelling It, an online beach towel retailer who offers products below the $400 thresholds believes that, in order for small NZ business to thrive under the current laws, they need to be extra savvy.
“If it weren’t for kiwi ingenuity – small NZ owned and operated businesses would possibly be non-existent. On paper, it should really be impossible for us to compete with such massive global players”.
Lou puts their success down to a combination of a quality product offering and a fostering loyal customer support through online community building and engagement.
“A lot of people actually like to support local businesses, but you need to engage with your client base and build a loyal following in order to thrive”, comments Lou.
Towelling have worked to build a strong following on Facebook, allowing them to now instantly market their new designs to a large group of people at no cost.
“It is also important to offer a product with a point of difference – it either does not exist, or current incarnations of it are done to a poor or unsatisfactory standard”.
“We have worked hard to build our loyal client base over the based 3 years – however, a fairer playing field with our international competitors would go a long way in allowing us to expand”.