Why you should consider doing business in New Zealand
Australia and New Zealand enjoy a strong trade relationship, which has created a number of exciting opportunities for Australian businesses looking to expand into the kiwi market.
Gaining a clear understanding of the opportunities available for doing business in New Zealand, as well as any considerations of which to be aware, will help Australian businesses entering the NZ market set themselves up for success.
Here are a few things you need to know about New Zealand.
It is a strong market for export
New Zealand is one of Australia’s active export markets, with Australian exports to New Zealand worth AUD$11.5 million.
The Australia New Zealand Closer Economic Agreement (ANZCERTA) created one of the world’s most open and successful free trade agreements.
This points to a positive outlook for Australian exporters, with New Zealand’s strong economy ($176 million surplus estimated for 2015/16 and a $3.6 billion surplus for 2018/29) driving strong demand for Australia’s high quality goods and services across a range of industries.
Considerations for export
Entering a new market can be daunting, so it is important that any exporters considering entering the New Zealand market ensure they are aware of the potential challenges they may come up against.
New Zealand has a very favourable business climate, and our shared language is a bonus for many Australian companies looking to do business in New Zealand.
In the recent Australian International Business Survey 2015, language and business practices were identified by more than 50 per cent of respondents as the dominant barrier to doing business in a foreign market. However doing thorough research around the local culture and business regulation can be invaluable in the early phases of researching a new market.
It’s important to be aware of the potential barriers to entering a new market, but there are a number of steps exporters can take to overcome them.
Businesses should seek expert advice before entering any new market. The Australian Government’s trade and investment agency, Austrade, provide a number of services for Australian businesses looking to enter any overseas markets. Having local, expert advice on the ground will invariably help streamline matters.
Austrade can provide advice and support to business owners who are considering whether to expand into New Zealand, and can also help identify potential partners through its extensive network of contacts.
Understanding any unique business protocols is still important when doing business in New Zealand, despite our commonalities. Understanding any differences with the Australian economy can reduce hiccups. One way to bypass any potential problems is to be introduced to a prospective business associate through an intermediary. Doing this helps to establish trust from the outset and can make forming partnerships an easier process.
Finally, potential entrants to market should consider their finance options. Respondents to the Australian International Business Survey 2015 identified access to finance as a potential barrier to doing business overseas. Businesses can approach this by asking their accountant for advice and their financial institution for support.
Often a bank may be able to offer you a secure loan or commercial bill facility to help you finance your contracts to New Zealand. Alternatively, if your bank is unable to help, we at Alliotts NZ may have a local solution.
Setting up for success
New Zealand offers great opportunities for Australian businesses thinking of expanding into a new market. The ANZCERTA has opened up the New Zealand market for many Australian industries, and significant numbers of businesses are already taking advantage.
Understanding the key considerations, as well as the steps to overcome any barriers to entry as highlighted here, will enable your business to navigate entry in the New Zealand market.