XS-Media is the latest victim of a trend that sees New Zealand branches performing well - but being dragged down when a parent company fails to make the grade overseas.
XS-Media, an online media-buyer’s portal, launched in New Zealand late last year, but following the demise of its parent company and other branches in Australia, Singapore and Malaysia, the New Zealand branch has no choice but to close its doors as well.
XS-Media New Zealand’s B2B platform allows sellers to show their products 24 hours and facilitate both set-price and auctioned sales.
“Economically speaking, New Zealand is nothing more than a pimple on the side of Asia Pacific and Australia,” says outgoing country manager Scott MacDonnell. However, says MacDonnell, the New Zealand XS-Media office was more than pulling its weight.
“We had the only television companies signed up as clients, one of the highest traffic counts, one of the earliest adoptions. It was very good for New Zealand.” A lack of venture capital funds means the company has to close its doors despite the inroads it has made. Following the tech stock crash of 2000, venture capital funds have “more or less dried up”.
“We really need another year’s worth of capital to get us through and it means we can’t operate.”
Part of the reason for the slow international adoption rate has been trying to convince advertising executives that nobody need lose their job by switching to the internet.
“It was quite a culture change and required a change of mindset for an industry that’s been around for a long time and is still operating in an old-school fashion. People couldn’t understand that we weren’t trying to change what they did, just do it electronically.” MacDonnell says advertisers were reluctant to use the internet out of fear more than for any rational business reason.
“It’s just like banking electronically, it’s just an easier way to do it as soon as people get their heads around learning how to do it.”
While the value of the New Zealand dollar and the size of our economy worked against XS-Media, it helped ensure the XS-Media back-end was run on servers here in New Zealand.