Tradenz outlines future Net traps for exporters

Tradenz has warned New Zealand exporters that Internet growth could result in an 'explosion' in the number of competitors they face at home and in export markets.

Tradenz has warned New Zealand exporters that Internet growth could result in an "explosion" in the number of competitors they face at home and in export markets.

In its Competing in the New Millennium report, Tradenz has identified eight key trends and factors that businesses need to take note of to be competitive in the future. One of these factors is the need to be electronically connected and electronically “smart”.

Tradenz strategic development manager David Espie, who wrote the report, says Internet growth is a double-edged sword for New Zealand businesses. While it means they can potentially reach more customers, it also means they face greater competition.

Businesses operating on the Internet can as easily service Net-linked customers in New Zealand as on the other side of the world, he says.

Espie says this has already happened in Germany, where manufacturers found they lost business after local customers used the Internet to shop around and found cheaper options elsewhere. He says it is also starting to occur in New Zealand in a wide range of areas, but it is hard to estimate how long it will be — although it will happen rapidly, she believes — before it really starts to affect local businesses: “Whether that’s next year or the year after.”

Espie says the success of retail businesses in particular may start to depend less upon their physical locations than on the quality of their Web sites.

Businesses need to make sure they are offering what the customer wants in order to compete. For example, Levi’s offering a service where people send their measurements and get a pair of jeans the exact size, style and colour that they want. Not only do customers benefit, but Levi’s finds it can carry a much lower inventory.

Espie says successful New Zealand exporters are already picking up on the trends Tradenz is highlighting.

Businesses can no longer assume their current or traditional responses to the marketplace will be appropriate to the needs of tomorrow’s customers, he says.

Competing in the New Millennium says the amount of business being conducted on the Internet is minuscule, but that rapid growth of commerce on the Net is inevitable, as is the development of other similar networks which might challenge or complement the Internet.

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