High-tech sales show stunning growth

ALAN WOOD
Last updated 13:28 11/09/2012

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New Zealand's high-tech sector continued to show strong growth particularly in the area of sales, up more than 50 per cent from the prior year, according to a survey.

The fourth annual market measures study of 275 technology firms showed they made good improvements in turnover, said Owen Scott, managing director of Concentrate.

"Respondents achieved a stunning average 53 per cent growth in annual turnover, against the backdrop of a weakening global economy and our high exchange rate," he said.

The survey was organised by Christchurch and Auckland marketing companies Concentrate and Swaytech, and sponsored by New Zealand Trade and Enterprise and PricewaterhouseCoopers.

The survey results support the Government's view that the high-tech sector was a key part of the country's economic future and should receive special focus, Scott said.

However, there were significant areas of weakness, he added.

"The classic issues of New Zealand's high-tech sector came through strongly - we are good at designing and developing innovative products but struggle to consistently find and exploit large markets for them."

The highest performing companies in the survey shared some common characteristics, Scott said. They tended to be very market focused, confident in developing market entry strategies, and clear on what makes a good channel or distribution partner.

Successful companies were also those embracing a move to online-inbound marketing and using non-traditional approaches to producing marketing content.

"A very clear trend in this year's results is the rapidly growing importance of being able to engage with potential customers online, which represents both an enormous opportunity and a threat for our high-tech sector."

In terms of growth objectives, the majority of firms - around 70 per cent - continued to be focused on exporting their products, mostly to other businesses.

Exporting was focused on traditional markets like Australia, the United States and the United Kingdom, with some non-traditional markets such as Hong Kong, China and Singapore starting to emerge.

Firms continued to invest in sales and marketing, on average spending 28 per cent of turnover. Consistent with international benchmarks, start-ups and early growth companies spent significantly more (32 per cent) than mature tech companies (21 per cent).

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- BusinessDay.co.nz

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