In the fifth and final part of the Business with Australia series, I ask New Zealand exporters whether the long distance relationship can work. It’s unlikely to come as a surprise that in business, as in personal life, the risks outweigh the benefits.
New business opportunities unfold when exporters formally commit to export markets and that means feet permanently on the ground.
Jeremy Moon, Icebreaker’s founder and CEO, started exporting to Australia in 1999 in what he says was a natural progression from New Zealand.
The brand initially worked with a distributor in the ski industry, but with little success. In 2003, with a new strategy and small account base, they relaunched into Australia as a subsidiary.
“My advice is to set up your own subsidiary in Australia and find the best Australians you can to run the business and find very strong linkages,” says Moon, “then your local market grows from four million to 24 million.
“That subsidiary was, and still is, Australians selling to Australians. It was set up and is run by Fran McMahon, who was the fifth person to join Icebreaker. You need professionals you can trust to develop protocols between your Australian and New Zealand office to keep communication and camaraderie very high.”
Modtec Industries, designers and manufacturers of modular workspace products, has dedicated people on the ground in Perth. Without them, opportunities would be missed, says Ian Cooper, head of global sales and marketing.
“You couldn’t build a business properly in Australia without having people on the ground,” Cooper says. “There’s a lot of activity in Perth and it took 12 to 18 months to develop. Without someone on the ground, we would never have got that work.
“We had to establish an Australian Pty Ltd company as it makes things easier. If we’re local, buyers don’t think we’re importing something, because that comes with its own restrictions.”
The temptation to commute across the Tasman is understandable given the short flight. Leah Fisher, co-founder of business improvement consultancy TakeON!, often makes the sojourn.
However, TakeON!’s business model in Australia is all about local partnering, which she says has far greater advantages.
“Our approach has been finding and working through local partners,” she says. “The overheads are lower and we believe the time to market is less. Obviously their market knowledge is greater and they have a network of relationships to access. Every company has its own culture or way of doing things so we ask our local business partners to shape the work to the Australian market, make it sharper.”
The first time Elizabeth Barbalich tried to launch her skincare brand Antipodes Nature into Australia, she did so based in – and shipping from – New Zealand. With little success, she put Australia on hold while focusing on other international markets and made a conscious decision to try again with a very different, and much more committed, approach.
“Don’t think about going in [to Australia] without the right distribution partner and don’t try to sell from New Zealand to Australia,” she says. “It’s cost prohibitive and you need to be on the ground.
“We can’t afford to employ a host of sales reps in Australia as it’s such a massive country. The infrastructure and size makes it difficult, so a rep can’t just jump on a train like they can in the UK. Distribution and logistics are completely different as you have to go through third party logistics and there’s a lot of warehousing involved. We chose to use distribution partners.”
Annabel Langbein has recently relocated to Australia and will be based there for the duration of her new cooking show, which recently started screening on the Australian Lifestyle channel.
Stuart Norris, co-founder of tourism photography business Magic Memories has also relocated to Australia, living in Queensland for the last five months where he can develop closer ties with Queensland Tourism.
Margie Milich, director of knitwear label Sabatini, now calls Australia home and travels constantly to stay in front of buyers.
As Norris says, Australia is not New Zealand with a nought on the end. The commitment required to make a successful New Zealand business into a successful Australian one is a challenging battle.
Those who have conquered both markets have some important advice:
- Be strategic and plan market entry before dipping any toes in the water.
- Research, research, research. Understand everything about the Australian market and arrive fully informed.
- Unless you’re in tourism, food or wine, New Zealand heritage does not resonate strongly with Australian buyers, so don’t make this your primary selling point.
- New Zealanders and Australians do business differently and Australians are generally a tougher bunch.
- Commit to Australia and get people permanently on the ground, including connected Australian partners.