Kiwi shoppers get good deal despite tiny market
New Zealanders are getting a good deal on many of their home appliances, by international standards. New data from PriceSpy shows New Zealand was routinely among the least expensive places to buy phones, cameras, computers and espresso machines.
Kiwi shoppers got a better price than those in Sweden, UK, Italy, Norway and Finland on a range of the most popular cameras, PriceSpy data showed, once currencies were converted.
They had the best price of seven countries surveyed for most GoPro products and both an Apple iPad 9.7’’ and Apple iPad Pro 10.5’’.
New Zealanders also got a better deal than shoppers in Finland, Norway, Sweden and United Kingdom on a Nespresso Creatista Plus coffee machine.
Liisa Matinvesi-Bassett, New Zealand country manager for PriceSpy, said: ‘‘According to our global data, there are certainly some big price differences for the same product dependent on the country where you are based. For example, the Apple Macbook Air –
1.8 GHz DC 8GB 128GB 13, can be purchased in New Zealand for
$1399, yet the same product in Norway can be purchased for $2061 – $722 more.
‘‘Similarly, avid photographers can purchase the Canon EOS
1300D + 18-55/3.5-5.6 III for $485 in New Zealand, yet in Finland, it will cost $128.20 more.’’
But she said some products were more expensive here.
‘‘The Ultimate Ears UE Megaboom portable speakers, for example, can be purchased for $250 in New Zealand, yet in Sweden they are $73.20 cheaper, priced at $176.50. Such price differences between countries can be caused by a number reasons. Some countries may have bigger taxes than others. The overall popularity of a product can also affect price. Product competition is another big factor, as is supply and demand, cost of living, salaries, location and the market size.’’
Bodo Lang, head of the marketing department at the University of Auckland, said economies of scale were a factor.
‘‘If a retailer decides to stock an item that will only sell infrequently, then that item will have to carry a higher margin to cover the retailer’s fixed costs. For example, if a shop only sells one or two expensive digital SLRs in a month, then these few sold units will have to recover the shop’s fixed costs, such as rent, equipment, staff costs, electricity, etc.
‘‘The high price variability of the Nikon camera is a good example of this. Conversely, if a shop sells a lot of units of a particular product then the fixed costs of the retailer are spread over a larger number of units, thus resulting in lower prices for consumers. In this sense, New Zealand is cursed by a small domestic market, resulting, generally speaking, in higher prices compared to larger markets such as the US, the UK or even Australia.’’
Lang said products that were parallel imported tended to be cheaper.
‘‘Products that are not just available through one official retailer but through parallel importers tend to have lower price variability. Conversely, consumers can expect high prices if a particular product is only available through one retailer within a geographical market, the cost of buying the product elsewhere is great and if there is a high risk associated with buying the product overseas. If these three factors are in play, then the domestic retailer can afford to charge a premium price because consumers are still likely to buy it despite the inflated price.’’
He said the cost of selling things in New Zealand was higher because of the long-distance transport, duties, taxes and other levies involved.
Graeme Watt, Harvey Norman’s general manager of major appliances at Harvey Norman, said New Zealanders did well by international standards. ‘‘We are an incredibly small market with huge needs and compliance.’’
Manufacturers bringing goods to New Zealand had to make sure they were tested to New Zealand standards – televisions had to be Freeview-compliant, for instance – and they had to be able to stand by them, in line with the New Zealand Consumer Guarantees Act (CGA).
‘‘It all has to be factored in by the retailer and the supplier.’’ He said retailers would go to an Asian supplier ‘‘like an ant on the back of an elephant’’ and say ‘it must have this and that . . . and we’ll take one, and one back-up’.’’
He said it was likely that, at some point, the CGA would have an impact on the price of goods coming to New Zealand.