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Exchange rate effects are masking the underlying strength in our level of online purchasing from overseas, says BNZ

Business
Exchange rate effects are masking the underlying strength in our level of online purchasing from overseas, says BNZ
28th Jul 14, 2:16pm by Guest
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Content supplied by BNZ

The US, UK and Australia together account for over 60% of retail spending by Kiwis at offshore sites.

Between June 2013 and June 2014 the NZ exchange appreciated 9.0% against the US dollar, 9.8% against the Australian dollar and has been flat relative to the UK pound.

The movement relative to the US dollar is particularly significant:

- The United States accounts for approximately 30% of retail spending by Kiwis at offshore sites.

- Online purchases by Kiwis from other countries are sometimes priced in US dollars.

When the NZ dollar appreciates against another currency, it will mean less NZ dollars are required to purchase items priced in the other currency, all else being equal.

So, when looking at trends in online shopping by Kiwis at overseas sites, it is possible that exchange rate movements can mask or accentuate the underlying trends in the volume of goods being purchased.

Value of spending vs Volume of transactions

The bottom two charts compare the trend in number of online retail transactions with the trend in the value (in NZ dollars) of online retail spending. Both series refer to shopping by Kiwis at offshore websites.

Entertainment media transactions have been excluded, because the very high number of low-value transactions could distort the analysis.

The growth in transaction volumes has clearly outpaced the growth in spending, particularly over the past year.

The charts support the idea that growth in online shopping from international sites is still very strong, with volumes up by more than 20% compared to a year ago.

Please note that this is only a partial analysis, because there are other significant factors that can have an influence, such as changes in the mix of spending. However, additional analysis we have done also points to strong underlying growth in international volumes.

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You can read the full BNZ Online Retail Report for June 2014 here.

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3 Comments

by  Boatman  |  28th Jul 14, 2:56pm 1406516171

This is true , and I have experienced it first hand , our strong Kiwi$ is brilliant for consumers , not so good for traditional retailers . 

In some instances I have little sympathy for the retailers who have been screwing consumers fo too long

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by  badmonkey  |  28th Jul 14, 4:43pm 1406522629

It should be great for the distributors and retailers whose imports are priced in US$. Naturally no benefit is passed on to the schmuck on High Street.

 

I have no sympathy for any of them (the retaillers). There are any number of examples where it is cheaper to buy an item overseas, and have it shipped by air or express courier, halfway around the world, and delivered to your door, cheaper than it can be bought down the road from a local supplier who should be benefiting from all the economies of scale associated with high quantity shipping, stocking, and trading.

 

I assume the overseas shop is not losing money.

 

You know your international distribution system is broken when this is the case. Or, someone is taking the p!ss. I wonder which.

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by  Morley  |  28th Jul 14, 7:35pm 1406532910

so if  small or medium retailer imports a  something for $100 dollars and pays up 20 to 30 different charges & taxes ( most was 32) . so ends up with $150 product then must pay rent staff insurance etc etc. So charges $300. Well they are not competive with the online americans at $120 delivered for free,no taxs or other chareges. Only the big box retailers sourcing direct and shipping 40 ft containers. can compete. So expect  no small medium retailer in five years and the retail rentals to collapse once as we get over saturated with coffee shops

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