(Kelvin Davis is the director or Greymouse, a cloud service-provider that supplies high quality, time-bound and cost-efficient services through its own facility in Fiji.)
By KELVIN DAVIS
On line business
The on line business and supply of goods from Hong Kong is booming. Manufacturers and Hong Kong retailers are supplying goods directly to the consumer on line, then sending parcels through the post to a consumer at a fraction of the cost.
It makes no difference if the web site is ebay, or Alibaba as prices continue to fall. Items that normally cost (at Fiji retailers) in excess of $2,000 FJD are available on the internet for almost one-tenth of the price.
In this example a 4 x camera video recorder security system can be purchased and delivered for $225.16 FJD instead of a local price of over $2,000 FJD. Even when duties are included, the price differential is significant.
To see the price difference compare this security camera system. http://tinyurl.com/ebay-surveollance-au-home
On line stores
Alibaba is a manufacturer’s web site, selling directly to the public. Ebay.com or ebay.com.au is the modern version of a shopping mall on line. The two web addresses are here.
• http://www.alibaba.com/
• http://www.ebay.com.au/
What are the reasons counties like Hong Kong and Singapore do so well yet businesses in other countries struggle? How are these countries able to supply goods at such a low landed prices?
Postage Rates Cost
Comparison
When any online business is looking at establishing itself, delivery costs are important. The biggest online target audience with disposable income is Sydney Australia. To sell on line to this client will require postage of goods, so let’s compare the cost of shipping one parcel.
This is a cost comparison of sending the same 500 gram parcel (the same way) to Sydney Australia.
• Hong Kong to Sydney $6.00AUD ($11.11 FJD)
• Fiji to Sydney $20.55 FJD
• Melbourne to Sydney $12.00AUD ($22.22 FJD)
• New Zealand to Sydney $24.99 NZD ($37.59 FJD)
These postage costs tell a significant story as to why Hong Kong is achieving the best internet sales.
Hong Kong postage cost is less than half the price of sending from other locations. As a result it has good government support services and a great place to establish an on line store.
Delivery Times
When I order goods from Hong Kong, the items usually arrive within 3 to 4 days. This is faster and less expensive than orders from inside the same country.
Making it worse
Like most postal services, Australian Post used to be predominantly driven by letter delivery. Now with the advent of online shopping, shipping packages has now become the norm. Currently, up to 70 percent of parcel deliveries are now derived from online shopping purchases.
As online shopping continues to boom, Australia Post is following other countries by bumping up prepaid parcels by as much as 30 percent. Getting a signature on delivery which used to cost a dollar, will now increase to $2.95AUD. These cost increases are for outbound services and not parcels arriving into the country.
As a result any company based in Australia attempting to export cannot compete on a level playing field.
Refer to this link for more http://tinyurl.com/theage-australia-post-delivery
Unfavorable Consequences
For online stores the consequence of this constant postal cost increases can be fatal for business based in New Zealand, Australia and Fiji.
Business owners I speak to are finding out that,
• They can no longer compete with international sellers
• Local customers will automatically prefer to pay less buying outside the country
• Continual cost increases kills local business investment confidence
On line shopping is here to stay, but countries and governments wanting to help on line businesses are changing.
In reconsidering charges and comparing them against their international competitors, postal services will be able to provide greater incentives for their local businesses to thrive and grow. For any small business exporting internationally, competitive postage costs are vital to maintaining customers.
If costs are not rebalanced, places like Hong Kong will continue to attract the consumer’s dollars, sacrificing local business and local employment opportunities.