Internet becomes another HP source

By MICHAEL FOREMAN

Hewlett-Packard took its first plunge into direct online sales in New Zealand yesterday as its build-to-order site at www.buyhp.co.nz went live.

The company has joined a growing list of computer manufacturers in New Zealand including Dell, Gateway and, most recently, Sony which are already selling products directly to customers over the internet.

While HP had been technically capable of launching the site since last November, it is understood that concerns over the reaction of the company's existing sales channel partners contributed to a delay in opening.

New Zealand manager Barry Hastings said he had had "some fairly long discussions" with HP's resellers before launching the site.

"The feedback has been generally positive. Of course, there have been some dissenting voices, but most of them could see that it was coming one day and the more savvy dealers have been asking, 'How should we interface to this thing'?"

Mr Hastings said fears that HP would undercut its dealers were groundless, as prices would be set at an average street level, and customers could shop around to compare value with resellers' own sites.

Hewlett-Packard has around 60 resellers - including nine companies specialising in large corporate sales - as well as four retail partners: Harvey Norman, Noel Leeming, Dick Smith, and Bond & Bond.

"It's not about price-cutting, it's more about giving the customer the choice that they demand," said Mr Hastings.

"We are not about to enter a price war with our channel partners."

Marketing manager Joanna Burgess said the target market for the direct-sell site was small to medium customers who did not want extra services or advice.

The buyhp site will also offer DeskJet printers, all printer supplies and a limited range of PCs and laser printers.

"We have not included the higher-end servers or large printers or anything that requires installation," said Ms Burgess.

The site is managed and hosted in Singapore, but all pricing information will be collated locally. PCs will be assembled to order in Australia and will be delivered within 10 days, while off-the-shelf items such as printers or consumables will arrive in three days.

At present buyers have to have credit cards but this will change.

The move to internet sales brings Hewlett-Packard New Zealand into line with its United States parent and most sister companies overseas. In the United States customers have been able to obtain HP computers online for 18 months and a similar operation was launched in Australia around a year ago.

But unlike competitor Dell, which sells exclusively through the internet, HP's online operations have yet to make major inroads on traditional sales.

In the US, direct internet sales account for only 1 per cent of revenue, and less than 1 percent in Australia.

"It's a small percentage of the market, but it's one we want to capture," said Ms Burgess.

"It might be 2 or 3 per cent in a couple of years but we will have to grow our business by a great deal more than that."

Links:

www.buyhp.co.nz