Brexit could drive online shoppers to UK sites

Post-Brexit and the sinking pound could drive more Kiwi shoppers to hunt for British bargains.

Chris Wilkinson, managing director of Auckland consultancy First Retail Group, said upheavals in Britain and currency changes could draw more New Zealand online shoppers to UK websites.

"This has reignited Kiwi interest in buying in the UK," he said of changes since last week. "It's probably got people back on Marks and Spencer, Debenhams and ASOS web sites.

"All are making a big play for the New Zealand market, with a lot of promotion into selling here and doing free freight. That's the deal-breaker for consumers," Wilkinson said of Kiwi shoppers drawn to those big sites.

Nielsen data showed New Zealand online shoppers spent $4.7 billion on 20.6 million items last year, dominated by five major categories: airline tickets, fashion, entertainment, accommodation and books. The top brand for Kiwi online shoppers is Trade Me with more than two-in-five or 44 per cent, followed by Air New Zealand, The Warehouse, Mighty Ape and GrabOne, Nielsen found.

Gary Baker, institutional research director at the Bank of New Zealand, said purchases from offshore sites turned in double digit-growth and rose 13 per cent annually.

"Comparing May 2016 to May last year, computer products, electrical goods, clothing and entertainment media were responsible for three-quarters of the increase in online sales at offshore sites," Baker found.

Wilkinson said currency changes might also drive more Kiwis to shop online with British sites and the pound might still fall further.

"The pound needs to sink to a greater level before it's going to deeply engage consumers and before currency became a truly compelling proposition in consumer behaviour. It's moved only a few cents," he said.

Debenhams, Marks and Spencer, ASOS and boohoo were offering free freight to New Zealand, which was hugely attractive to shoppers here, he said.

"Prices you see includes VAT like our GST. But as you're buying from overseas, you shouldn't be paying VAT. That VAT money is applied to the freight," he said.

Despite the attractions, some New Zealanders might be wary of buying online, he said.

"Research we've seen recently is that consumers are increasingly concerned with being pinged with GST on imported good and concerned because leading brands are geo-restricting their sales to overseas customers," Wilkinson said.

Some big online stores were also restricting stock and only selling their own lines, he said.

"Online stores such as ASOS are increasingly shifting to their own brands where there is more margin," Wilkinson said.