Online retail spending up
The total online retail spending in January was up 15 per cent compared to the same period the previous year, with online sales at local merchants up 11 per cent last month, the latest BNZ monthly report on New Zealand’s online retail sales revealed.
Gary Baker, BNZ director for institutional research, stated the latest results outpace, for the fourth consecutive month, the growth in spending at physical stores (based on the Statistics NZ figures for electronic card transactions).
The report showed international merchants continued to gain higher market share over locals, with Kiwi spending at offshore sites up by 21 per cent last month compared to the same period last year.
“We can’t pinpoint a single factor [on what is driving the growth], but do note that the strong momentum observed in 2015 has flowed through into the start of 2016,” Baker said.
He added traditional growth drivers like convenience, price, greater access to brands and products, could also have played a part in increasing consumer confidence in making online purchases.
Baker said another factor affecting the figures could also be the lower New Zealand dollar, which makes overseas goods more expensive for Kiwis.
But Baker said “whether this leads to rises or falls in spending at overseas sites depends a lot on whether consumers react by purchasing fewer items from overseas, substitute with cheaper items, or just pay up.”
According to him, though, “with online purchases by New Zealanders up 21 per cent compared to January last year, it certainly seems the value proposition remains solid, and there is a willingness to pay up.”
Online sales in the computer and entertainment media categories again stood out, according to the report, continuing the strong performance they showed in December. Clothing sales were up nearly 20 per cent in January with both domestic and international online clothing merchants turning in double-digit growth rates.
The New Zealand government is, at present, looking into lowering the threshold for GST tax on goods, which would affect international sales, although it remains unclear as to how much they would lower it down to.