A Queenstown clothing retailer that lost almost all its customer base to COVID has followed those customers back to China via the internet.
When New Zealand closed its borders to foreign visitors last year, Queenstown clothing retailer BONZ lost 95% of its customer base.
“We sold 85% of our NZ lambskin and wool products to Chinese international visitors, so we were really exposed, and our turnover disappeared when borders closed,” said BONZ Group director Oscar Rodwell.
As most of their customer base was from China, the company already had some pre-existing channels on Chinese social media and messaging app WeChat for customer service and tracking orders. In order to adapt to border closures, BONZ decided to expand their reach further into mainland China through digital channels.
Rodwell decided the way to save the business would be to sell direct to customers via Chinese eCommerce platforms such as Tmall – a platform under Alibaba Group that has more than 500 million monthly active users.
“We’ve used Little Red Book (a Chinese social media platform), and TikTok to drive traffic to our products on Tmall, which has been huge because this platform accounts for 64% of luxury shopping in mainland China.
“We’ve also started livestreaming once a week to showcase our products and New Zealand.
“People have been engaging and we’ve created a brand following this way,” he said.
BONZ opened cross-border eCommerce trade into China in October and since then their revenue has been steadily growing.
“Our revenue is still down 50% compared to pre-Covid sales, but it’s slowing gaining back.
“We’ve also started making furniture, throws and cow hide cushions to sell into China. We’ve been manufacturing our own products for 50 years, so we can adapt to what’s selling,” he said.
At their lowest point, the company had to let go of several staff when the second wage subsidy ended, however, they have since taken back some of those roles in manufacturing and retail.
“We’re feeling optimistic now and have reached sustainable staffing levels.
“I leveraged the old team to help with our new digital strategy and we’re now hiring because we’ve kept the retail store open.
“Now locals are also coming in and we’ve found a domestic Chinese market who live in Auckland and travel to Queenstown for holidays,” he said.
Diversifying into the Chinese digital market has opened huge potential growth for BONZ, but there is a high barrier to entry into this market.
“We spent $100,000 to set up trading partnerships and Alibaba fees, but it’s given us access to the whole of mainland China’s luxury shoppers,” he said.
BONZ was already a trademarked brand in China and they already had channels for shipping, which saved time in their transition.
Rodwell says they’re now less exposed to fluctuations in tourism and although it’s expensive, he recommends other retailers diversify and innovate.
“Don’t wait for borders to reopen because it’s a moving goalpost,” he said.