Overcoming barriers to entry in Australia and New Zealand

Breaking into the Australian and New Zealand markets can be challenging for US brands. This WorldFirst article will outline some barriers to entry and offer tips on how you can overcome them.

24 May 2023 Jason Kaye

4 min

Reading Time: 4 minutes

As an American e-commerce seller with a well-established brand, it’s natural to want to expand your business to new markets like Australia and New Zealand. The “land down under” shares some cultural similarities with America, and trade between the United States, Australia, and New Zealand is typically favorable.

However, tariffs and duties are not the only obstacles that prevent US e-commerce sellers from selling in Australia and New Zealand. For example, the vast geography of these two countries poses logistical challenges for fulfillment companies, which is unrelated to tariffs. Another non-tariff-related obstacle could be resonating with audiences in your marketing messages.

This article will provide some tips for overcoming the barriers to entry for US e-commerce companies targeting customers in Australia and New Zealand.

Why should US e-commerce brands sell in Australia and New Zealand?

Both Australians and New Zealanders love online shopping. In New Zealand, e-commerce represents approximately 9% of all retail sales. In Australia, 82% of Australian households made an online purchase in 2022. Growth in the e-commerce sector is only expected to increase in both regions over the next few years.

As a US e-commerce brand, there are many opportunities to build a loyal customer base down under. For example, in Australia, a new marketplace called Onceit partners with more than 500 international brands and has over a million regular customers.

Similarly, the Auckland-based e-commerce marketplace Trade Me has a massive online reach. The platform attracts over 75% of New Zealand’s web traffic, making it a safe bet for American sellers looking to target new customers. Both sites also offer marketing support to US brand sellers, including dynamic retargeting ads, SEO, and email marketing services.

Barriers to entry: differences in marketing messages

As a new brand looking to break into the market in Australia and New Zealand, it’s easy to assume that your existing marketing messages will convert just as effectively with your new customers. However, this may not always be the case, as there are some differences between the cultures. For example: 

  • Aussies and Kiwis are very health conscious – they like to buy products that promote natural health. 
  • Like Americans, Aussies and Kiwis love sports. Rugby is far more popular than football in New Zealand, and many coastal Australians love surfing.
  • In Australia, New Zealand, and the US, households tend to be smaller (with fewer than three people).
  • Australians favor informal and direct language in marketing materials. A famous example is the 2006 Tourism Australia ad featuring the tagline, “So where the bloody hell are ya?”

Awareness of the subtle differences between Aussie and Kiwi cultures is crucial. Here in America, we like our advertising to be entertaining and appealing to our emotions. So, carefully research your audience and competitors, and adjust your existing brand messages to suit your new potential customers.

Barriers to entry: logistics and last-mile delivery

Australia and New Zealand are massive land masses with hundreds of miles of countryside that separate cities from each other, presenting significant logistical challenges for delivery companies.

In Australia and New Zealand, customers in rural areas are accustomed to waiting two weeks for e-commerce deliveries, while city-based customers demand faster delivery services. If you’re a US brand on the other side of the world, you must find a reliable fulfillment service to meet these differing customer expectations.  

Companies like Specialised Logistics Australia and ShipBob specialize in meeting the unique fulfillment needs of Australia and New Zealand. Services include:

  • Extensive networks of distribution centers located in all major cities
  • Specially trained staff in all aspects of logistics and customs compliance
  • Automated supply chain services that integrate with store inventory software

As an international seller, you can depend on fulfillment companies to provide cost-effective print-on-demand services, packaging, and warehousing solutions.

Barriers to entry: Handling import and export duties

For small and medium-sized businesses, one of the most challenging obstacles to overcome is importing and exporting goods to Australia and New Zealand. Gathering the correct documentation and calculating import/export tariffs and taxes can be a hassle, especially if you need clarification on which fees apply to your goods.

The United States has trade agreements with Australia and New Zealand, with the United States-Australia Free Trade Agreement being the most well-known. This agreement eliminated tariffs, opened up markets for goods and services, and established a framework for resolving disputes. It also included provisions on intellectual property, labor, and the environment. Since its implementation in 2005, trade between the US and Australia has increased significantly.

Similarly, the United States signed a trade agreement with New Zealand called the Trade and Investment Framework Agreement (TIFA) in 2010. The agreement provides a platform for the two countries to discuss trade issues and ways to enhance economic ties. The TIFA has helped increase trade between the United States and New Zealand, particularly in the agricultural sector.

Barriers to entry: exchanging currencies and making payments

Dealing with payments in multiple currencies can be a significant barrier to entry for businesses looking to expand into Australia and New Zealand. However, using a reliable payment gateway can make this process much simpler. 

The Zyla Account is the hassle-free way to pay business partners and get paid from marketplaces quickly.

  • Open multi-currency accounts with local account details
  • Make fast and secure global payments to suppliers, staff and partners
  • Collect funds from marketplace sales
  • Keep costs down with competitive rates

The free-to-open Zyla Account enables businesses to make collections and payouts internationally – giving you the freedom to do business anywhere, all with the security of our online platform.  Open an account today and you could be approved, set up and trading internationally in 24 hours. Get started or find out more by calling (855) 797-3366 today.