Article Source: nzbusiness.co.nz
Accessing Chinese consumers through popular e-commerce sites is a growing and exciting opportunity for Kiwi exporters. The key to success, however, is providing preferred payment methods through a trusted API platform like Latipay.
You simply can’t ignore the stats. China is the world’s largest e-commerce market. By 2010 it is expected to be worth a staggering US$1.1 trillion (Source: ZDNet.com, March 2016).
It’s a potential goldmine for New Zealand’s exporters – big, small, and in-between.
It has also been an increasingly lucrative opportunity for Latipay – an Auckland born and bred API (Application Programming Interface) platform, set on conquering the world’s e-commerce digital frontier.
As Latipay CEO Leigh Flounders highlights – in 2015 just 12 percent of online transactions in China were through credit cards. The remaining 88 percent was made up by the main e-wallets (WeChat, Alipay and JDPay) and the 19 major Chinese online banks.
“Why would you offer credit cards as a way of payment to your Chinese consumers?” he asks. Latipay went live in November 2015, validating its model in New Zealand before launching across the Tasman in December 2016. Singaporean and US exporters and traders are set to benefit next, with launches in both those countries later this year.
Latipay was created as a first-to-market fully compliant API platform designed specifically for global businesses that interact with China-based consumers and small business.
It enables export businesses to be paid in their home currency in real time with Chinese shoppers making payment in their home currency and preferred method of payment.
For New Zealand export businesses the benefits of partnering with an interface like Latipay is obvious. Flounders sums it up in the following feedback from clients:
- Having guaranteed payment allows for the immediate shipping of goods and services, therefore compressing the time from product purchase to consumer delivery.
- Offering all of the main e-wallets and online banking options increases conversion and reduces ‘abandon cart’ rates (anecdotally this sits at an 11 percent reduction in ‘abandon cart’ rate after Latipay integration).
- Feedback from payers is that they have a higher trust of the site once they see the familiar logos of JDPay, WeChat and Alipay, as well as the main Chinese online banks.
Alana Riley, who runs Nelson-based Oxygen Skincare, which sells 40 percent of its products to China consumers, has been using Latipay for several months after a Chinese client initially suggested it. Customers in China previously had to go to the bank to pay for her products, and the ability to be paid in New Zealand dollars is hugely useful for Riley’s business.
What’s driving e-commerce growth?
Flounders reports that there has been a dramatic increase in Chinese digital consumers going directly to New Zealand e-commerce websites, “as opposed to the traditional method of New Zealand businesses aggregating products on Chinese websites such as Alibaba, or convoluted supply chain and retail distribution models in China”.
He believes the exponential increase in Chinese digital consumer traffic has been driven by strong New Zealand brand awareness; increasingly faster and more sophisticated logistics out of New Zealand; trustworthy, compliant and live payment platforms such as Latipay; a rapidly growing digitally mobile Chinese consumer middle class; and Chinese consumers’ desire to get guaranteed authentic New Zealand goods.
“Latipay has seen over a ten-week period a staggering average increase of around 30 percent in transactional volume per e-commerce client using its API.”
Kiwi businesses that work with Latipay have high China pedigree, and include Post2U, Alpha Healthcare, Health Element, Steens Honey, Oxygen Skincare, Oasis Beauty, Australasian Food Corporation and Artemis.
What’s next for Latipay?
Prior to its December launch in Australia, Latipay won the 216 Australia New Zealand Internet Awards Tech Start-up Award and, says Flounders, was embraced by Australian banks, payment partners and the regulatory framework. It has also recently partnered with ASX-listed payment5 gateway Novatti.
“We’ve also had fantastic support here in New Zealand at an industry and regulatory level – through NZTE, The Innovation Partnership, NZTech and The Department of Internal Affairs,” he says. “However, as a brand new, disruptive Fintech we had to overcome the digitally immature and stagnant New Zealand banking environment in order to scale as fast as we wanted.”
As mentioned earlier, going forward the short-term focus is all on Singapore and the US.
“We have a strong focus on Southeast Asia over coming years,” adds Flounders. “We recognise that most digital companies requiring scale must consider this region.”
Southeast Asia’s importance to Latipay relates to funding and investment into the company, as well as the export, education, software, insurance and travel markets and how Chinese consumers pay for these goods and services in the region.
“Our focus is on partnering with some of the leading global payment businesses,” explains Flounders. “Latipay has a number of products from invoicing software-as-a-service through to physical point-of-sale APIs. However, e-commerce is our primary focus as we believe that this is the fastest growing segment of the market.”
Global e-commerce is the new digital frontier, he states. “We believe Latipay is going to be the next PayPal; global e-commerce and Chinese consumers are our vehicle to get there.”