Latipay enables e-commerce in China
Retailers worldwide can't ignore the powerful force that is China. It's consumer society makes up one quarter of the world's economy.
One of the keys to successfully doing business there is e-commerce, chief executive of payment service provider Latipay Leigh Flounders said.
"Without an e-commerce model you're almost nothing. Chinese consumers are coming directly to Australia and New Zealand businesses to buy goods online."
A 2016 study by retail-tourism company Global Blue found that for 82 per cent of all consumer purchases in China occurred via mobile.
Latipay allows Chinese consumers to make online purchases from foreign businesses in Yuan while foreign merchants are paid in their local currency.
The Auckland based company works between Kiwi merchants and Chinese consumers who favour mobile e-wallet payment like WePay (WeChat) and Alipay (Alibaba) over credit cards as well 19 Chinese banks.
WeChat, for instance, lets users do just about everything through its payment system WePay. They can order pizza, buy games and pay the bills using e-wallets.
Latipay's chief digital officer, Gabriel Walker said the concept of O2O, online to offline or vice versa, is a growing consumer trend in that part of the world.
"When Chinese consumers are in New Zealand as tourists, and they make their first payment offline, you want to create that stickiness enabling them to go O2O. E-commerce can give them a place they can buy this product, using the same payment channel they use everyday back in China and then repurchase."
Latipay has been operating for little over a year now and has already attracted 1500 New Zealand merchants. It is now looking to expand into partnerships between Australian businesses and Chinese consumers.
Walker said the rapid growth in e-commerce is a result of China's innovation outpacing regulators' ability to keep up so, especially with regards to food and drug safety and quality, meaning many consumers tend to go for imported products.
"From a Chinese consumer point of view they trust foreign products, they think it's better quality and it's just we're not enabling them to do that because of an un thought of piece of friction which is the payment," Walker said.
Another big issue New Zealand businesses face is the scale of the Chinese market, Flounders said.
"When you're interacting with business in China you have to be ready for scale.
"Any business that interacts with China has to remember that their infrastructure, their products, their logistics or their services have to be able to scale with the demand because Chinese consumers scale very quickly once they want to engage with you and if you can't meet those demands then go elsewhere."
But Flounders' biggest piece of advice for Kiwi businesses looking to go overseas is to bite the bullet and commit.
"If you do everything right in a compliant manner you'll have a very successful relationship in China. If you try to cut corners you'll get burnt. Invest in your infrastructure, invest in your compliance anything short of that you will end up failing.
"Be a fearless NZ business and do it right, you'll reap the rewards."