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Treading new ground – inside Shippit’s NZ expansion

Shippit co-founder and co-CEO Rob Hango-Zada spoke to ATN about the company’s recent announcement it was expanding its operations to New Zealand
Shippit co-founders and co-CEOs Rob Hango-Zada (L) and William On (R).

Shippit’s journey to becoming a giant of Australian and Asian ecommerce started because of a dodgy vacuum delivery to co-founder William On. Now, almost a decade later, the company has expanded into New Zealand to become a truly ANZ company.

The trans-Tasman move is just another step in Shippit’s lofty pursuit in becoming Asia’s leading logistics platform. There has been expansion into South-East Asia, the well-publicised acquisition of Singaporean startup Luwjistik in 2022 and now, a shift across Tasman Sea to Australia’s closest eastern neighbours.

New Zealand isn’t a new market for Shippit to operate in, however. It’s been servicing various recognisable clients like Spotlight, Harvey Norman, Freedom and Kathmandu in the region for some time already.

In an interview with ATN, Shippit co-founder and co-CEO Rob Hango-Zada says the recent move has been labelled an expansion not because new ground is necessarily being tread, but because Shippit will now provide bespoke, tailored services to clients who operate within New Zealand’s retail market.

“New Zealand is a market where we have supported our customers for the last six or seven years through certain integrations we’ve made,” Hango-Zada told ATN.

“The difference here is we’ve been operating very much based on what our Australian-based or headquartered customers want to do in New Zealand, versus what is actually right for New Zealand.

“What relationships do we need to have with the local carrier that cover 95 odd-per cent of the market? How can we actually bring a benefit to local, homegrown Kiwi retailers who are ready to dominate in their local market, but then also take on the world?

“We want to be there at the forefront with these retailers at the same time.

“That’s why we’re labelling it as an expansion because we’ll start being able to service them directly without having an Australian footprint.”

Shippit, like all ecommerce platforms, continues to wrestle with what has rapidly become known as ‘the Amazon Effect’ – in which end customers have come to expect faster, cheaper, more effective delivery from retailers all around the world.

Amazon’s potential for same-day delivery has shifted expectations of every online retailer across the globe. As a result, a recent study conducted by Shippit in conjunction with Jarden found the delivery experience is second only to price in the eyes of the customer.

Expanding operations into a new market will always have its fair share of challenges, but Hango-Zada says Shippit does not view the Amazon Effect as a challenge, but rather as an opportunity to empower retailers.

“When you think about the Amazon Effect, it is a tremendous outcome for the end customer. I have so many friends and family members who are so impressed with what they can get delivered at all hours for no delivery fee whatsoever,” Hango-Zada continues.

“That levels up the expectation in the customer’s mind that they should be able to get that everywhere.

“If we look at the data, a few months ago we ran a survey in partnership with equities research firm Jarden, and it basically found half of all customers won’t buy from a particular brand again if they had a bad experience.

“At the end of the day our fundamental philosophy is we’re here to empower retailers to give their customers a much better experience which, in turn, will help them build the lifetime value of that customer for that retailer.

“No one is going to be able to rival Amazon’s scale – particularly if you look in the US, the only ones that can really come close are the likes of Walmart. What you can learn from those multi-billion-dollar operations is they have really great brand equity and a great store network.

“What Shippit has been aiming to do in the local market in Australia what we’ll replicate in New Zealand is to enable retailers to better leverage the assets they own and operate.

“Ship from store is an incredible model that allows retailers to leapfrog a burgeoning newcomer in the market because you’re already leveraging inventory that’s sitting in your store, and the time to customer and cost to customer is far lower than shipping it out of a centralised distribution centre (DC).

“There’s also a merit of connecting retailers with relevant infrastructure players that better enable them to focus on doing what they’re really good at and leveraging the physical footprint of someone else to do what they’re not so good at.

“Through better carrier selection, through better delivery experience management, through notifications to the end customer, we see our role as being quite critical to helping retailers stay relevant.”

While there are certainly cultural and logistical comparisons that can be drawn between Australia and New Zealand, Shippit is not treating the two markets as one and the same. It has learned from past experience that having in-market knowledge of a boots on the ground leader is important in ensuring the company’s continued success.

That’s why Sofia Newcombe has been appointed as Head of Market Development and Hango-Zada says there will be a unique, on the ground strategy implemented in the new New Zealand operations.

“New Zealand is not just an additional state in Australia. It’s a brand-new market that requires deep understanding of what the customer wants,” he says.

“To that effect we’ve appointed a market development lead in Sofia Newcombe who is a Kiwi local, understands the market extremely well, and has been able to drive those operations locally.

“We’ve learned from our operations in South-East Asia. We tried to operate a business in South-East Asia from Australia at the height of Covid, and that was ridiculously difficult. It relied on use learning as we went – and nothing beats the experience of somebody who has grown up in the market, understands cultural norms, and understands what works and what doesn’t work through their professional experience.

“The obstacles to overcome are to really reaffirm our local standing, continue to invest in the customer experience not just in Australia, and make sure we have a market-leading proposition that can compete with local incumbents in the New Zealand market.”

With expansion into New Zealand now confirmed, that overarching goal of becoming Asia’s leading logistics platform is firmly within Shippit’s sights.

Hango-Zada, while bullish on his organisation’s prospects, says that goal will only come to fruition with the continued support of customers and growing demand for Shippit’s services across existing and potential markets.

“For us, it’s crucially important we don’t look beyond Asia into the US and UK or European markets,” he says.

“We believe there are enough players who can do a good enough job in those regions. Our job is to continue to provide the largest carrier library to the Asian market, and doing that exceptionally well across South-East Asia, Australia and New Zealand for the time being.

“Beyond those markets and looking further afield, that will come in time.

“We love to be customer-led. If customers demand our services enough, we will consider entering the market, even if it takes us seven years [like New Zealand].

“That’s something for us to keep on the horizon.”

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