Shopbop was acquired by Amazon in 2006. Image / shopbop.com
Shopbop was acquired by Amazon in 2006. Image / shopbop.com
Amazon-owned online fashion boutique Shopbop has stopped shipping to New Zealand ahead of incoming changes to GST law this Sunday.
Shopbop, which sells designer women's clothing, shoes, bags and accessories, confirmed to the Herald that it had stopped its services to New Zealand on November 22. It would not saywhy it had decided to axe the market from its global shopping site.
In a response to Herald questions, a Shopbop employee named only as Brooke confirmed shipping to New Zealand ceased last week.
"At this time, I do not have any information regarding the businesses decision to stop shipping to New Zealand," the spokeswoman said.
Brother menswear online fashion retailer East Dane, also 100 per cent owned by Amazon, has stopped shipping to New Zealand, another Shopbop spokesperson confirmed.
One Auckland woman who wished to remain anonymous told the Herald she, and her friend, had tried to place an order on Shopbop over the weekend but kept receiving error messages relating to the shipping address.
The woman, who has been shopping on Shopbop for more than seven years, shops on the site every month because of its range of high-end designer brands such as Diane Von Furstenberg and Alexander Wang. She said she shopped on the site as she was able to buy brands that are not currently available in the New Zealand market.
"They are a really good service, Shopbop. You order clothes on there and they arrive by the end of the week," she said. "It is a shame.
"The clothes they often weren't any more cheap than here, but the difference was they had variety of labels and range."
The woman said she believed Shopbop stopped shipping to New Zealand so it did not have to register and pay GST.
Shopbop has been a subsidiary of Amazon since 2006 when it acquired the online fashion retailer for an undisclosed sum.
The online marketplace launched in 2000 and was created by Americans Bob Lamey and Martha Graettinger, who operated a small fashion retailer named Bop in the US state of Wisconsin.
From December 1, any international website conducting more than $60,000 worth of business into New Zealand each year needs to be registered to collect and pay GST to the New Zealand Government. Online orders will have GST levied on all sales into the country.
Under current rules there is no obligation for foreign retailers to charge GST and items can be stopped at the border depending on the value of an order. If an order is valued between $225 and $400 then GST plus custom clearance charges are collected at the border.
Shopbop's response to Auckland shoppers who say they were surprised to find out Shopbop had decided to no longer ship to New Zealand. Photo / Screenshot
Retail NZ chief executive Greg Harford said incoming changes to GST rules would streamline the process for the consumer and avoid parcels being held by customs.
He said other international websites could follow Shopbop and shut down local operations to New Zealand following changes to tax obligations.
"There may be some players with low margins who decide not to ship to New Zealand anymore," Harford told the Herald.
Internet giant Amazon switched off its global site to Australians when the Australian Tax Department introduced similar updated GST rules in July 2018. The company switched it back on a few months later.
Jeff Bezos, chief executive of Amazon. Photo / Getty Images
Harford said he would be "very surprised" if Amazon switched off its global site to New Zealand following changes to tax legislation. He said the incoming changes were similar to those already in effect in Australia.
"New Zealand might not be top of the priority list for people to sell to, but they'll certainly get onto it and reinstate sales down the track. This is just a tax obligation like any other tax obligation that a major corporate should be meeting," Harford said.
"The reality is New Zealand is still a small market by global standards, but it is a reasonably affluent market. We've got consumers here who want to spend and ultimately, retail - whether you're a New Zealand business or an American corporate - is all about selling goods."
New Zealanders were increasingly finding alternative ways such as through freight forwarding services to get product that was not able to shipped directly to New Zealand into the country, he said.
