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Home / Business

Knowing your market is path to growth

Helen Twose
By Helen Twose
Columnist·NZ Herald·
17 Sep, 2015 05:00 PM5 mins to read

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Many NZ companies would be better to find a niche, instead of spreading their efforts too widely, says Morag McCay. Photo / Jason Oxenham

Many NZ companies would be better to find a niche, instead of spreading their efforts too widely, says Morag McCay. Photo / Jason Oxenham

Morag McCay says Auckland’s multicultural population is an asset businesses should embrace.

When Morag McCay needs a tasting panel for her uniquely Asian food products, she heads five minutes down the road to the University of Auckland.

Offering samples of her new food line, which is still under wraps, to local Chinese students gives McCay the feedback she needs to tweak products designed for Asian palates.

McCay says Auckland's multicultural population is a huge asset that more businesses should be embracing.

"The key thinking about being close to Asia and taking a real advantage of that growth engine is to actually embrace it at home from all perspectives, and the learning you get out of that should not be understated.

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"The reason I'm confident for some of the stuff to go and be reviewed by large professional suppliers is because I'm confident in what we have done here."

McCay has contacts in the Hong Kong market from her days as an executive for British sandwich chain Pret a Manger.

She helped oversee the expansion of Pret - a "heavy" business to export, given its need for a retail footprint, large volumes of raw materials and in-market staff - into New York, Tokyo and Hong Kong.

"You need to find people like that, and to find people like that so close to home ... because the nuance is important, particularly in food." McCay's own business venture comes two years after she moved back to New Zealand after three decades in Britain in executive roles for well-known global brands including Hilton, Avis and Campbell Foods.

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Her return home was partly for personal reasons - to be close to her elderly father, who has since died - and partly the result of a conversation with her husband, a Brit, about whether they wanted to live on the edge of Europe or the edge of Asia.

I think the momentum and the opportunities and the growth are definitely this side of the world.

Morag McCay

In Britain it is possible only to tinker around the edges of a well-oiled machine, she says, whereas if you're in an area of the world where change is normal, then you have more ability to do something quite different.

"Re-entry" into New Zealand business has been helped by striking out on her own, something she says would not have been imaginable had she stayed in London.

McCay says she is conscious that she is coming back with know-how rooted in a market of 57 million people and greater business resources, particularly when talking to businesses in her role as an NZTE Beachheads adviser.

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"That kind of empathy comes from, to a certain extent, putting yourself in the situation where you are doing it yourself as well."

But she says her experience with Pret - an 80 million business when she joined in 2000 - is applicable in many ways to New Zealand businesses with an eye on overseas opportunities.

While Pret is ubiquitous on the streets of London, its model was to be a niche player found only in a few cities around the world, McCay says.

She says it will never open in Sydney or Auckland because it works only in a high-density population, which is something to keep in mind, not only when designing your product, but also your business.

"New Zealand can't produce enough in any context to be anything other than a very small player and the crunch point is finding a way to make that sustainable, which is actually about understanding the channel to market that will get you to that niche in a way that is cost effective and is defensible."

Doing something well in a "narrow way", by dominating, for example, a single US state or city, could be a more successful strategy for a New Zealand business, she says.

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While she agrees with the adage about not having all your eggs in one basket, she says it is also possible to spread yourself too thinly internationally, and be only average as a result.

Among McCay's new local business connections is Stefan Preston, a fellow Beachhead adviser and former head of Bendon who invited her to join as director and shareholder of the high-growth lingerie brand he co-founded, Rose & Thorne.

While not everyone has the choice, McCay says it's important to her to work for a business with which she has an emotional attachment.

"This was one which I felt pretty motivated by for lots of reasons about wanting to give women a choice and wanting to do something which can make a difference to people's lives and to a certain extent identifying with some of the characteristics of the market Rose & Thorne is after."

She says Preston was keen to get people around the board table who could bring skills as well as capital.

McCay joined Sarah Paykel and Debra Hall, who have backgrounds in PR and marketing, alongside Preston and co-founder Sue Dunmore.

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"I don't think there is a rush [for Rose & Thorne] to go overseas. It's absolutely about doing what's great in New Zealand - you can experiment, you can prototype, you can trial, you can sense-check, you can do all that good stuff here relatively small-scale and relatively low-risk and that's what we're doing at the moment."

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