Australian shoppers go on NZ web spree

By CHRIS DANIELS consumer reporter

Canny retailers are exploiting Australian fears of GST to promote New Zealand websites with the promise of big savings.

CDs, DVDs, watches and clothing are proving popular with Australian web-surfers, eager to avoid their new tax and take advantage of a weak New Zealand dollar.

Australian newspapers have advised internet bargain hunters that the exchange rate and lack of GST enforcement from authorities have made Kiwi websites the cheapest available.

The Australian tax department does not bother chasing GST payments on goods worth less than $500. Australian shoppers also avoid paying the 12.5 per cent GST charged on this side of the Tasman.

An article in the Sydney Morning Herald told readers they could save up to 30 per cent on DVDs bought from New Zealand internet retailer flyingpig.co.nz.

FlyingPig chief executive Mark Battles admitted that avoiding GST was "an angle" the company was trying to capitalise on, but it still needed to be backed up with good service and products.

The prospect of avoiding GST might get people on to the New Zealand site, but more was needed to keep them there.

Items such as DVDs were imported into New Zealand and paid for in foreign currency anyway, but some local suppliers got them cheaper than their Australian counterparts.

FlyingPig did not sell parallel-imported DVDs or CDs, and was not marketing in Australia solely on price. Its range of products was also better than that of Australian internet retailers.

New Zealand Direct Marketing Association chief executive Keith Norris said the attraction of avoiding GST would soon wane with Australian shoppers.

"It could be a good phenomenon, though, with GST still fresh in Australian minds."

New Zealand internet retailers should ensure they competed on quality and good service, not just price.

Many surveys of internet shoppers had shown they were not attracted by cheap goods, but by convenience, range and quality available.