Massive offshore online department stores like Temu are disrupting New Zealanders shopping habits.
New Zealand Post e-commerce data shows New Zealanders spent more than $6 billion online last year, a 5% bump on the year before.
Overseas online transactions were growing at a faster rate than domestic, but the average offshore spend was falling.
Online stores like Temu saw the single biggest increase in purchases with a 33% jump on 2023 figures.
Managing director of First Retail Group Chris Wilkinson said the increase in online shopping was a significant worry.
“Really, this is tapping into what remains of our discretionary spend in New Zealand.
“In an already constrained market where every dollar counts, people are choosing to shop with Shein, Ali Express and Temu, and that’s reducing the amount that’s left for shopping here domestically.”
He said online shopping was very attractive to buyers.
“It’s a fascination for many people, the promise of value, but once you’re within that network, that web, it becomes an absolute fascination that really does take people on a journey and they will often end up spending quite a lot more than what they anticipated.”
He said the quality of the products varied.
“It really is a case of caveat emptor – let the buyer beware.”
Wilkinson said it presented a challenge to local retailers.
“In many cases their products are being supplied directly from the manufacturers, so it creates, in some ways, an unfair playing field because the New Zealand retailers are going through the likes of quality and sourcing standards – often these aren’t subject to these businesses supplying through Temu and Shein.”
He agreed that people’s desire to be ethical went out the window when there was an opportunity to save money.
“That’s right, that’s exactly what’s happening at the moment – there’s a lot of contradiction going on in buyer behaviour.”
“One of the things, you know, we saw just through Covid, just the sentiment that poured out to local businesses when people were, had to focus on supporting those local businesses.
“So that’s the type of thing we do need people to consider.
“There are often cheaper alternatives locally, you know, we see in that second-hand market there are better alternatives for people buying. Products are potentially better manufactured, of sustainable materials and all these things I think are considerations for people spending.”
Wilkinson the online shops such as Temu and Ali express had an “incredibly successful model, you can’t deny it.”
“But it is a challenge,” he said.
“From what i understand Temu is paying GST… and of course there will be business that are making money out of it – the distributors, the NZ Post – so you know, there is some part of the New Zealand economy that benefits.”
