It’s been a rough year for retailers and even powerhouses like The Warehouse are feeling the pinch (and their share price has tumbled in recent months). Is the growing popularity of online retailers – particularly – going to make it difficult for other retailers – both online & bricks’n’mortar – to survive financially?

Let’s take a look at why Aliexpress is a very real threat, then consider ways other retailers will need to adapt to survive.

Why is Aliexpress a threat to retailers?

Aliexpress is essentially an easy, secure way to buy products direct from Chinese retailers. It’s made up of a lot of small retailers who source products direct from the factory (since so much is manufactured in China) or from wholesalers at low margins. Since the cost of doing business in China is a lot lower than many Western countries (such as NZ) the prices for products are often significantly cheaper than buying local (many Aliexpress retailers even offer free shipping, which is more than can be said for a lot of the ridiculous postage rates seen on TM auctions!).

The only downside is you might have to wait a few weeks for your product to arrive.

In my personal experience (about 100+ orders), the quality of the products and reliability of Aliexpress has never been a problem. The odd occasion where something hasn’t arrived, or a product breaks, Aliexpress or the retailer, have provided a refund.

So if the price is right, and the product is good then, as a consumer, why wouldn’t you choose Aliexpress? It’s a good question, and maybe the only reason some NZ retailers (or those sellers who basically buy from Aliexpress then put it on TM for triple plus postage!) aren’t already out of business is because people don’t know about Aliexpress.

But that time will come.

So if you’re selling stuff then you need to think seriously about how you will differentiate yourself when your current customers discover Aliexpress.

What can NZ retailers do to beat the Aliexpress effect?

One specific advantage that NZ retailers have over Aliexpress right now is obviously delivery timeframe. You can get a product to a customer tomorrow, instead of three weeks time (although Aliexpress shipping times are reducing, and you can pay for faster delivery). So like anything, use whatever advantages you have, while you have them.

Some other key differentiators include:

  • Customer service – Give your customers better care and attention than a global sales engine and you can expect they’ll most likely be happy to pay a premium to feel special. Be helpful, be responsive and be attentive to what your customers are looking for.
  • Local knowledge – You know your local market better than anyone. What’s trending? What holidays, seasons or festivals are coming up? What are the local customs? Anticipate and market to them.
  • Customise – Can you take a mass-produced product, tweak it a little and come up with something unique? Mix and match products, or create unique combinations that no one else has thought of.
  • Trust – There will always be customers that prefer to shop local, even if that means paying a little more. Can you market yourself as a trusted local supplier?
  • Speed – Can you deliver quicker than anyone else? Customers are getting more impatient and if you can promise same day, or next day, delivery then you’ll have the advantage.
  • Location – The closer you are to your customers, or where the buying is happening, the better off you’ll be. It’s why ice cream vendors on the beach do so well.
  • Market needs – Some products need to meet the requirements of the NZ market. For example, household lights need an SDOC before being installed by an electrician here in NZ. NZ power plugs, or cellphones, need to meet local requirements. If you can overcome this hurdle then customers can buy from you with confidence.

Aliexpress isn’t the enemy – globalisation has been around for a long time and its impact will continue to make inroads into traditional business models. The key is adapting to change.

When is change happening?

Good question! Plan for it sooner rather than later. Not everyone is shopping on Aliexpress, and yes it could take some time for the impact of shoppers switching to global warehouse shopping sites to be felt by local retailers (both online and off) but if you don’t plan for it now, you’ll be left out in the cold when it hits (like the dinosaurs when the Ice Age hit!).

The bottom line is don’t panic, plan for it and look for ways you can use it to your advantage.

Aliexpress – Should NZ retailers be worried?
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3 thoughts on “Aliexpress – Should NZ retailers be worried?

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  • Tue, 4 Jul, 17 at 5:59 pm

    Thanks Kenneth, thats a good summary and case in point of how nz retailers need to be aware of who and what theyre competing against. I really hope retailers like the Warehouse find a way to stay relevant, not just as a shareholder but as a NZer who worries that maybe if online shopping takes over completely we’ll never leave our homes, and become even more insular than we are now.

  • Mon, 12 Jun, 17 at 3:33 pm

    I have a direct comparison of Aliexpress service to Warehouse Stationary service.
    Warehouse Stationary.
    On Thursday 25 May 2017 I purchased a Samsung tablet which was advertised at special price sale from New Lynn store. Stock was showing as two however when the assistant went into the store both had been sold and stock records were out of date. Sorry said the assistant shall I get one from another branch. I confirmed that would be okay but could I collect it from the other branch. I was advised that would not be possible and I would receive it the following Monday and they would phone me once received. Late Tuesday I phoned and was told it had not been received. I phoned Wednesday and told the branch had a power cut and they could not tell me if the tablet had been received. I phoned head office in Takapuna only to be told they had no way of tracing inter branch stock orders or transfers. On Thursday I received a phone call to say it would be there on Friday afternoon and they would call when I could pick it up. Friday afternoon as I had not received a call I called at the New Lynn branch only to be told it still was not there and would not be there until following Tuesday earliest as Monday was a statutory holiday. The manager then decided to check whether the tablet was available at other branches and admitted that their stock control system was overdue for an update. A tablet was available at Westgate Branch and I picked it up from the branch. It appears that Warehouse Stationary are really endangered by Aliexpress as their main advantage of immediate delivery was not possible in this case.

    Having installed a new induction cook top and not being able to find a local stockists of induction kettles my daughter convinced me to use Aliexpress.
    I found a suitable kettle and ordered with free shipping on the 31 May 2017 I was most impressed with the tracking app they used to advise each stage of despatch from warehouse through to Airport custom clearance and in flight etc I received the kettle this morning 12th June 2017.
    Great customer service and delivery service advice.
    However on opening the package there was a manufacturing fault in that one side of the handle had not been welded to the body of the kettle. Dispute claim now being processed.
    An amusing addition found in the package was a free gift of electrical adapter for connecting to NZ electrics. Induction kettles do not connect directly to electric source they sit on top of an induction cook top.
    Customers must make their own decision on where to purchase it looks like inferior products from Aliexpress or protracted deliveries from NZ retailers.
    NZ Retailers need to concentrate on providing quality products ex stock and Warehouse Stationary sort out your stock control systems.

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