A new freight consolidation service is set to make it easier for Kiwi food retailers to enter export markets and remove the need for intermediaries.
In a first for the country, start-up business Jetkrate will offer a small parcel, freight consolidation service which allows consumers to purchase goods from Kiwi businesses and have them shipped to an Auckland address - where they are repacked and sent as one package to any offshore market.
The new service aims to replace the daigou (personal shopper) channel which uses personal shoppers to purchase commodities from local retailers and ship them to customers in China as well as reduce the cost of freight for ex-pat Kiwis living overseas.
“There are two major barriers to Asian consumers shopping directly here for products like Manuka honey, dairy, wine and woollen clothing. The first is not all New Zealand retailers ship overseas or if they do, the shipping costs become prohibitively expensive if customers are buying across multiple businesses,” explained Varun Khetrapal, Jetkrate co-founder, adding that the daigou channel is inefficient and lacks transparency.
“The second is about trust; in the same way New Zealanders might struggle to identify suitable online retailers to buy from in a country they have never visited, Chinese buyers rely on personal shoppers to select a supplier on their behalf. The new consolidation service removes the shipping barrier and makes it easier to get goods overseas once purchased - that allows the retailer to concentrate on building confidence levels across their customer base.”
Khetrapal said they plan to introduce a more formalised structured model, providing retailers with a clear route to this market which has a transparent and robust supply chain.
“The new model we operate under will bring retailers and consumers closer together and will allow them to see the pricing of the products they paid for from the retailer - a feature not common in the daigou channel,” he continued.
“We will also allow customers to login into an online dashboard and manage their orders, adjust their prices, commodity codes, control shipping timing and even have us Christmas gift wrap their products.”
Khetrapal, a former Fonterra executive said the idea for the new service took two years to develop and first came from watching tourists at the airport fill their suitcases with infant formula and milk powder.
“The concept isn't right for a business such as Fonterra which is a B2B marketing body, but we believe it does have potential under a business-to-consumer model. Our research shows there are around a million ex-pat New Zealanders living overseas with the three major markets being Australia, UK and USA, followed by Canada, Germany, Singapore, France and Malaysia.
“We Kiwis are very patriotic and there is a big demand in these markets for iconic local brands such as Whittakers, Marmite and L&P as well as New Zealand wines and confectionery. There is also a lot of interest in products from local big-box retailers such as The Warehouse and Farmers.”
Khetrapal said they believed the business would be well received in a COVID environment - allowing Kiwis stuck in lockdown to send care packages overseas without anyone leaving their houses. The business is designed to support Kiwi businesses that are too small to deal with international fulfilment.
A relationship with a freight partner in the UK will see Kiwi businesses that work with Jetkrate exposed to their database of 200,000 customers - an audience that is already very familiar with package forwarding. Jetkrate’s consolidated shipping model could save consumers two-thirds of the costs of shipping items individually.
“As an example, three separate purchases of chocolate, wine and clothing sent separately from NZ to Canada could cost around $150 - however this cost would be closer to $50 through us. We’ll also hold customer’s packages for 30 days and so they can utilise us for storage while they shop online.”
Khetrapal noted that a digital button they created which can be embedded on retailer websites provides an integrated global shipping option for customers and increases the likelihood of customers shopping there.
Jetkrate has 1,000 customers registered to use their service within the first three months of soft-launching the site.