Interview: Challenges and opportunities for New Zealand SMEs in Chinese e-commerce landscape: experts

AUCKLAND, New Zealand, Jan. 2 (Xinhua) -- In an increasingly interconnected world, New Zealand's small and medium enterprises (SMEs) find a golden opportunity in the Chinese market. The New Year festive period also marks a surge in consumer spending, offering a lucrative market for Kiwi businesses to explore.

In an interview with Xinhua, Senior Lecturer Antje Fiedler and Lecturer Sihong Wu on Management and International Business from the University of Auckland pointed out New Zealand SMEs' challenges and opportunities in this endeavor.

DIGITAL DISTANCE, CAPACITY AND LOGISTICS CHALLENGES

While e-commerce brings New Zealand suppliers closer to global consumers, reducing the physical distance of doing business, there are digital distances that the New Zealand SMEs need to overcome along with internationalization.

Fiedler and Wu argued that the disparity between platforms poses a big challenge for New Zealand SMEs. Engaging with an e-commerce platform such as Alibaba can be difficult partly due to language barriers. But also, the Chinese e-commerce platforms feature innovative elements, such as live streaming, or require context-specific knowledge, for example, the importance of shopping events such as Single Day or local influencers.

Capacity and communication speed also constitute challenges because many Kiwi companies are SMEs employing fewer than 50 people and have very limited stock. Achieving the needed scale to serve Chinese consumers' demand for e-commerce can be difficult for New Zealand SMEs. In the meantime, Chinese consumers expect fast responses to their questions when engaging on digital channels, which is often challenging for New Zealand firms, who have limited resources and staff, said Fiedler and Wu.

Logistically, New Zealand companies are also facing hurdles from freight issues despite growing in recent years, as pointed out by Fiedler and Wu. Congestion at ports, lack of resilience, and inadequate transport networks challenge local SMEs to participate in e-commerce platforms and transform their business more digitally. High shipping costs and prolonged waiting times further exacerbate the digital distance, hindering SMEs from effectively connecting with major markets.

Cultural misalignment adds to the digital distance where the traditional New Zealand work culture clashes with the always-on demand of e-commerce platforms, said Fiedler and Wu, that employees are less likely to work longer hours in New Zealand, compared to the work culture in Chinese startups and SMEs.

STRATEGIC THINKING AND INNOVATIVE SOLUTIONS

However, within every challenge lies an opportunity for growth and collaboration, which can redefine the Kiwi e-commerce landscape. China is a huge market, providing growth opportunities for New Zealand SMEs. Fiedler and Wu believed that those New Zealand companies daring to venture into the Chinese e-commerce landscape would adopt strategic thinking and come up with innovative solutions.

New Zealand SMEs could use a strategic alliance or joint venture strategy to partner with Chinese startups. By doing so, Chinese companies can share their advantages in logistics and workforce. In the meantime, New Zealand companies can utilize their resource advantages to export more high-demand products to China, commented Fiedler and Wu.

The partnership can also encourage New Zealand SMEs to learn from Chinese startups to integrate new digital tools into their business operations. They can adopt a "catch-up" recruitment strategy. For example, hiring target country nationals to work for the e-commerce sector can reduce language issues and other cultural barriers, said Fiedler and Wu.

China is also a trendsetter in digital commerce. Engaging with the Chinese markets can inspire New Zealand SMEs to innovate for other markets in the digital space, opening new opportunities, added the two experts.

Fiedler and Wu recommended that New Zealand SMEs consider connecting with logistics service providers in global major markets to reduce shipping costs and increase supply chain resilience. Cooperating with Chinese startups and entrepreneurs to build an open cloud and achieve more flexible operational planning can help New Zealand SMEs better engage in Chinese e-commerce platforms. By doing so, New Zealand SMEs would have more opportunities to connect with Chinese upstream and downstream enterprises to achieve win-win results, said Fiedler and Wu.

As New Zealand SMEs endeavor into the dynamic and potential Chinese market, challenges may seem daunting, but opportunities arise. Through strategic collaborations, innovation, and a deep understanding of consumer preferences, Kiwi businesses may carve out a niche and contribute to the global success story.