GST rules hit overseas sites
Shoppers appear to have begun to turn their backs on international online retailers as the expansion of GST takes effect.
In December, spending at overseas sites was down 9 per cent compared to December 2018, according to a BNZ report.
The timing of the spending drop coincided with large foreign retailers being required to collect GST on all shipments to New Zealand worth under $1000 from December 1.
Local online retailers saw a 13 per cent rise during the same period compared with the previous year.
Mighty Ape chief executive Alastair Burns said the online retailer experienced more than 20 per cent growth in the first two weeks of December, than in the past five years for the same period.
Burns said the growth could be attributed to the GST change, as well as the late timing of Black Friday and Cyber Monday sales.
‘‘The GST changes have been great news for us, making local retailers more competitive against the off-shore retailers but we do need to consider what that means for the off-shore retailers,’’ he said.
‘‘Will they start to consider putting new distribution centres in New Zealand to compete at a more local level, for example.’’
BNZ said it appeared that the changes to the GST rules had made international shopping less attractive.
But the bank cautioned retail sales could be volatile from month to month and it was too soon to say if this would become a long-term trend.
Purchases from overseas sites in November were also 4 per cent lower than the same time in 2018.
Some retailers, including some of Amazon’s international sites, have blocked New Zealand customers until logistical details around GST collection can be ironed out.