Trade New Zealand's recently appointed general manager of e-business, Rod McKenzie says it's something of a culture shock to be back in the country after five and a half years as Senior Trade Commissioner North America to discover we're still in the early stages of e-commerce.

In the US he and the people he dealt with were comprehensive web users but on taking up his new role and conducting research into the state of the market he was surprised to find lots of people are disenchanted with their web experience and have been burned for various reasons.

"Perhaps they've spent a fortune on building a web site only to discover it is inflexible and they can't do anything without hiring the person who built it to update it all the time. Maybe they've had poor advice on how to market themselves on the web."

Trade New Zealand's research is showing many companies don't have the expertise to develop their web sites and are finding commercial offerings overpriced. "It's quite alarming. Many companies have had web sites built ready for e-commerce and find themselves locked in and we're hearing this over and over again."

He says there's a reluctance to invest further, and even when approached to become part of Trade New Zealand's portal many respond: "it better not cost me anything". In fact inclusion on the exporter web portal is free, as long as you qualify as a legitimate exporter.

New export portal

Trade New Zealand is on the verge of re-launching its e-commerce portal to give exporters and idea of what they can expect from the having a web presence. This is part of its $13 million e-business programme developed by a consortium of partners led by KPMG Consulting. Core partners are TelstraClear, Microsoft and Cisco with supporting partners Kompass and Vignette.

NZ Exporters Online, the online directory of exporters forming the foundation of the largest project was launched in October 2001 - the final parts will be launched later this year.

The exporters portal (www.marketnewzealand.com) features profiles of 1600 companies, which have demonstrated they are 'committed and capable' exporters.  It's a free service but companies must answer a questionnaire to qualify.

"When an overseas buyer comes in to the site to look for cheese, for example they'll be given access to 30 companies who are qualified exporters not just 'would be if they could be' companies." Companies who don't qualify are referred to other sections of the site where they can to get assistance to develop their business.

Site members, once qualified, will have access to all of Trade New Zealand's market intelligence including evaluations of various overseas markets and an export news service which draws on the organisation's own resources and those of mainstream media.

Mr McKenzie describes the site as 'opportunity matching'. "At the moment we get about 3000 ad hoc inquiries a year who've heard about our apples, cheese or wine so now we're going on-line with this formal system which will match requirements for our best suppliers. It won't be transaction-based but it will give exporters an idea of the kind of response they're going to get."

An extensive meta data campaign has been undertaken along with search engine optimization and a promotion campaign in Trade New Zealand's 37 offices around the world. The site will also be promoted by trade missions and at trade fairs to make potential buyers aware of what New Zealand has to offer.

E-marketplace uncertainty

Meanwhile Trade New Zealand is still gathering data to determine how exporter should best invest in e-commerce.  An update on what's happening with e-marketplaces for example, can be found at the website www.emarketservices.com  a joint venture between Trade New Zealand, it's Australian equivalent Austrade, Scandinavian trade organisations and others who've been pooling research studies.

The findings so far suggest a healthy degree of skepticism "It's still in the early stages and we're finding great variance about whether e-marketplaces are good for exporters or not. There's certainly great potential to sell directly but we're not sure whether this expands to wholesalers or distributors. There are not a lot of success stories yet," says Mr McKenzie.

He agrees that focusing on getting internal systems working efficiently is a pre-requisite but for the moment there's still a lot of uncertainty with a major food and beverage portal in Australia and New Zealand's Southfresh both going under in recent months. "Technology has gone ahead of business rational for moving to the web."

Three years ago e-marketplaces were 'the' up and coming thing - now a lot of that talk has disappeared. "This whole area of business-to-business e-commerce came up with a surge three years ago and went away with the dotcom crash. It's still in a fledgling state but its coming back but there's a need for businesses to do some hard research to find the right information," says Mr McKenzie.

He expect to see e-marketplaces playing a major part in New Zealand's export growth in about five years.

Dare to be different

Mr McKenzie says about 60 per cent of our export market is focused on the food and beverage or forestry area with the greatest growth likely to come from 'differentiated' and branded food products, technology and software.

While software exports are coming off a small base at the moment there are areas where there is significant growth including health applications. There's also a growing awareness of the potential for biotechnology and manufacturing in general from 'ug' boots to ball bearings, he says.

However the physical cost of exporting can cut into potential profit of commodity goods so New Zealand must compete on something other than price. "We have to be different either by doing something better than the competition or add value by being different or niche focused."

For example he says our wine industry now has a good reputation for producing world-class Sauvignon Blanc. "It was found to be significantly different and is now sought after around the world. Our other wines however are similar to what is available elsewhere and less sought after."

He says e-commerce efforts depend very much on the sector and country you are targeting.  "If you are looking at the US you should be taking e-commerce very seriously, if it's Europe it pays to look hard at which part because web use is much more sparse there than in North America. We're watching the Asian market very carefully where there's a substantial increase in use of the web but it's still relatively low key. As far as Australia goes it's very much similar to New Zealand," he says.

September 2002
By Keith Newman

Rod McKenzie

Further Reading:

• Online Marketing Research Pavilion
• Content Management  Research Pavilion