ExportX - opening online markets

If you want to sell online, advises Paul Grey, make sure your products appear in the places where people shop.

As United States consumers were ringing up more than $2 billion in the pre-Christmas online sale bonanza known as Cyber Monday, Paul Grey was ensuring New Zealand brands were in the thick of it.

Grey's firm, ExportX, takes the logistics and technology headaches out of e-commerce to put New Zealand products in the hands of overseas online shoppers. Previously known as World Wide Access until a rebrand this month, ExportX ships goods to overseas markets, connects into the big online retailers such as Amazon and eBay, and delivers to customers within a day or so of purchase.

Back in New Zealand, suppliers have up-to-the-minute sales data beamed to their smartphones or tablets, with replenishment reports guiding decisions about how much stock to send in the regular container-loads ExportX ships overseas.

It's a low-risk and cost-effective alternative to the traditional approach of using local distributors or creating an in-market presence.

The strategy has seen ExportX feature for several years in a row on Deloitte's fastest-growing company lists, receive an exporting award from the American Chamber of Commerce, and make it to the finals of last year's University of Auckland Business School Entrepreneurs' Challenge.

Since launching in 2008 ExportX has expanded its network into Britain, Germany, France, Canada, Japan and China, but the US has been a particular focus for Grey.

It's a market he knows well, having lived there for nearly a decade while working for utilities software provider Peace Software.

Grey says the US is also at the forefront of e-commerce.

"The rate of change and innovation and development, whether it comes out of Silicon Valley or out of Seattle or New York, it's happening there first for the most part and then it gets pushed out to all the other countries."

He sees several trends coming out of an economy driven by 300 million savvy online consumers.

Grey says in the US the retail sector is growing at 4 per cent a year, while e-commerce is growing at 18 per cent.

But mobile e-commerce - using smartphones and tablets to make purchases - was up 81 per cent last year, he says, with the majority of sales through mobile shopping apps. "There's no website in that. There's no Google adwords. There's no Google search in that transaction.

"So a big part of what we're doing for New Zealand products is getting them into that game by working with Amazon and getting our products eligible so if someone searches on their iPad using the Amazon shopping app, our products are there.

"I think it's a bit of a wake-up call for a lot of people who are thinking that they are selling to America but I'm looking at them and going, 'well you're just completely shut out of that transaction unless you're doing it in a much more sophisticated way'."

It's a shift that is hard to see "when you're sitting down here on the edge", says Grey, and is driven by the increased dominance of the big online marketplaces.

Grey puts the size of Amazon into context by comparing its annual revenue of $90 billion to Fonterra's turnover of almost $19 billion last financial year.

"Not only is e-commerce growing but Amazon, and this is in America, is an increasing proportion of that."

Grey says Amazon's growth is because, just like shopping malls, consumers love shopping there.

Rather than fight that, he advises, give customers what they want and get your products in the place where they are shopping, rather than simply limiting e-commerce to a shopping cart on your own website.

"The simple fact of it is that 90 per cent or more of people will never, ever, ever in their life visit your website no matter what you do," he says.

While the US is in the spotlight this year, Grey says exports to European markets are picking up - 60 per cent last year.

He says quite a few New Zealand firms were burned in Europe during the global financial crisis but the lower overheads offered by ExportX meant some were able to keep their sales ticking over and are now in a good position to take advantage of the resurgence.

"ExportX is about offering a better way to export, and success for me is each time that a New Zealand company is generating export revenue that maybe they otherwise wouldn't have had or maybe that wouldn't have been economic for them.

"We want to get to hundreds of brands, we want to get to thousands or tens of thousands of products and we want to keep driving cost out of it and get our goods flowing into big export markets in ways that they couldn't before."