New Zealand exporters have more confidence in their businesses despite the strong NZ dollar as theyfocus on factors they can control and strategies ranging from importing to online focus, according
to the ninth annual DHL Export Barometer survey.The survey found that 59 per cent of New Zealand exporters are confident that their exportorders will increase in the next 12 months. This equals a strong increase from last year whenconfidence was at an all-time low (51 per cent) in the history of the survey. The DHL ExportBarometer further showed that 54 per cent of NZ exporters expect their company profitability toincrease over the next year.
“Given the on-going challenges exporters have faced, it’s encouraging to see them findingways to manage the strong kiwi dollar and look forward with confidence. And this forecast is offthe back of a positive last 12 months with half (52 per cent) of exporters claiming they saw anincrease in export orders over the last year”, said Tim Baxter, Country Manager DHL Express NewZealand.
Among challenges exporters have to face, 55 per cent of the respondents have cited theexchange rate as having the most negative impact on exporters revenue. Other key factors negativelyimpacting exporters’ businesses include rising fuel prices (36 per cent) and internationalcompetition (33 per cent).
The top export destination for New Zealand continues to be Australia with 81 per cent ofcompanies exporting there in the last 12 months, an increase from 72 per cent last year. Other topdestinations are North America (50 per cent), Europe (39 per cent), Pacific (37 per cent) and theUK (37 per cent).
Exporters are now also more confident that orders will increase from China with 73 per centof the respondents expecting an increase in orders from China in the next 12 months, compared toonly 59 per cent a year ago.
Looking ahead five years from now, exporters expect the main export destinations to beAustralia (72 per cent), North America (42 per cent), China (32 per cent), the UK (28 per cent) andEurope (25 per cent).
“It’s not surprising that Australia continues to be New Zealand’s top export market. Ourclose proximity for shipping, same language, similar time zones, Free Trade Agreement and biggermarket share make it a sound export destination,” Baxter added. “It’s also encouraging thatexporters have China in their sights. With 1.3 billion people and a burgeoning consumer middleclass, there will only be one transition as big as China in our lifetime.”
To manage the effects of the strong New Zealand dollar, exporters are using variousstrategies, including refining their offering (32 per cent), considering re-pricing (31 per cent),investigating different markets (26 per cent) and competing online (23 per cent).
There has also been an increase in the number of exporters that are importing with 77 percent, compared to 64 per cent in 2012. Almost all (90 per cent) of exporters stated they haveinitiated innovative strategies to drive business in the last 12 months. “Overall we’re seeingexporters adapt strategies that focus on what they can control as opposed to being held to ransomby external factors that they can’t control,” Baxter said.
Keeping up with the online trend, 92 per cent of exporters are currently using the internetin some way to sell their products and services, particularly those in larger, longer establishedbusinesses. Exporters selling online tend to target customers in Australia, with the majority ofrespondents (48 per cent), followed by the Pacific islands (15 per cent), the US (12 per cent) andChina (9 per cent).
Most exporters (90 per cent) use their own website to sell their product or services. Inaddition, they use third party retail stores (30 per cent) and third party websites (27 per cent)as their distribution channel.
The main benefits exporters see in having an online presence is to market to overseascustomers (47 per cent), offer better customer service (45 per cent) and faster speed of delivery(34 per cent).
“By taking advantage of the large well-established third party websites, these sites canbecome conduits to purchasers at home and abroad and can increase the profile of a company in aglobal e-commerce environment. When coupled with a sustainable and reliable delivery solution,exporters can have access to any market in the world,” Baxter concluded.
