You don't get advice sugar-coated from Greg Cross. He may have spent the last six years encouraging Kiwi exporters to take on the world, but the recently retired chairman of New Zealand Trade & Enterprise’s Beachheads programme (and member of the Influencers judging panel) is scathing about their grasp of what should be a modern business fundamental: using the power of the internet.

Even in 2010, many are indifferent or clueless, and it’s holding them back, according to Cross. “Maybe companies here aren’t embracing it because they are still not taking it seriously as a channel. But the reality is that if our exporters want to be truly competitive, then they are going to have to be competitive in the area of e-commerce.”

There are some notable exceptions — Kiwi outfits that use the online reach to build relationships in other markets. A handful of others have grasped the online nettle and emerged as viable international e-tailing operations. Fishpond, the Manukau-based online book retailer, and Hamilton’s Torpedo7, which hawks cycling and other sporting equipment online, are both selling well into Australia as well as locally. In the case of Fishpond, it’s Australasia’s largest local online bookstore.

Cross says there should be opportunities for other New Zealand e-tailers to foot it internationally. Technological barriers? “I don’t think we’re constrained by the size of the pipes today. Most New Zealand companies doing a significant amount of business in the US, for example, would have their internet sites being served out of US server farms. Probably the hardest thing in terms of setup is for New Zealand companies to get their heads around warehousing and logistics — but in theory that isn’t that difficult.”

And beyond e-tailing, Cross can see all sorts of doors opening for New Zealand companies if they could only get their e-commerce act together. “The easiest way to appear local and far larger than you really are is by using the internet. It represents a tremendous opportunity for New Zealand companies to relatively cheaply and efficiently put their products and services on the international stage.”

But is the power of the internet as self-evident as Cross makes it sound? Gerry Harvey, the billionaire Australian retail guru of Harvey Norman fame, has dismissed online retailing as “a complete waste of time” and a “con”. And certainly the potential of this brave new world is often oversold.

Against that, however, consider that close to 10% of UK retail spending already happens online, and the figure is growing. By ignoring the internet, some bricks-and-mortar retailers not only risk missing an opportunity, they could also see their customers hoovered up by an overseas competitor with a smarter online strategy. Shopping mall outfit Westfield seems to have come to just that conclusion, recently announcing plans for Australia’s first ‘virtual shopping centre’.

Tony Boyte is a senior analyst for Nielsen Online, which researches internet use, among other things. Boyte says that 17% of New Zealanders’ online retail spend is going overseas — an improvement on a year ago but still a significant loss. To his eyes, that suggests that before Kiwi e-tailers look too far afield they should investigate gaps in the market closer to home.

Granted, currently only 2% of New Zealand retail spend is online. But local consumers are increasingly buying online and in a greater range of categories — a sign that growth in online shopping is set to continue, he says.

“It’s notable that the ones who have been reasonably successful have been specialists in the online space.”

One of the most lauded is Fishpond. Launched from a spare bedroom by Auckland University electrical engineering student Daniel Robertson six years ago, the e-tailer has grown at a phenomenal rate and now has distribution centres in New Zealand and Australia. General manager Ben Powles says Fishpond has succeeded on the basis of some old fashioned principles: “We built this company by having the best price, the biggest selection and a great service.”

Is online retailing an area where Kiwi companies might be able to compete internationally beyond Australia? “There are a few obstacles: you need to know that [overseas] market and be able to operate in a different business environment. But from a technology point of view there’s no reason why a New Zealand company couldn’t do it. “We certainly don’t feel constrained by geography.” But Fishpond’s focus for now is very much on being the best in this neck of the woods. “There is still huge growth in this market.”

Shaun Ryan, chief executive of Christchurch-based SLI systems, which sells search and navigation technology to companies keen to improve their online capability, says New Zealand firms are about three years behind the rest of world in terms of e-commerce.

“You have to have a good platform that allows you to easily upload your entire product and keep it up to date. It has to be usable, and easy to find things on. You have to design a site with search engines in mind … There’s also an art to the fulfillment side — can you fulfill orders quickly and accurately?”

But if a New Zealand firm can get those things right, neither the tyranny of distance nor technology should hold them back, says Ryan. “If you have a unique New Zealand product and you can sell it online, it opens up the whole world.”

The 2010 Influencers
• Who are they?
• Science's renaissance man
• Trading up
• Ones to watch and back-room influencers
• Who influences the Influencers?
• Wise counsel and outside the tent