Tariffs could see online retail giants like Temu and Shein stepping up their activity in New Zealand. Photo: Nicole Serrano
Retail giants such as Temu and Shein may step up their activity in New Zealand as the United States hits China with punitive tariffs.
President Donald Trump has raised the tariff on Chinese imports into the US to 145 percent.
Gareth Kiernan, chief forecaster at Infometrics, said there could be a lot of Chinese-based companies left with excess stock they would struggle to sell into the US - "because of the effective doubling in price faced by American consumers".
He said that could result in discounted products being sold elsewhere, including via Temu, to reduce inventory levels and keep up activity in factories in the face of weaker US demand.
"A similar, but less marked phenomenon might be observed across products from other countries as well, although the pause on any tariffs above 10 percent for the next three months means that we're unlikely to see those effects just yet."
Marketing expert Bodo Lang, at Massey University, said China would pursue trade with its non-US trading partners more than ever.
"Although the Chinese government is not directly in charge of pricing goods at large e-commerce firms such as Temu, it can use other tools - such as diplomacy and negotiating favourable deals in other areas - to increase trade with non-US trading partners."
He said companies such as AliExpress, Temu and Shein were likely to be very motivated to increase their sales across the board.
"There are likely to be two categories: sales promotions to stimulate sales into the US, and sales promotions to stimulate sales with all other trading partners.
"Sales promotions into the US are more likely to be price-based, aimed at lessening the impact of US tariffs - think discounts, rebates, flash sales, and coupons. Promotions targeting the rest of the world, including NZ, are more likely to focus on adding value to products - think free gifts with purchase, bonus packs, loyalty programmes, exclusive access, and bundling.
"This is likely to succeed because most consumers are well aware of the uncertainty created by US tariffs. If Temu and other Chinese companies make attractive offers to New Zealand consumers, it is likely we will see an increase in sales of Chinese products in New Zealand - not least because the New Zealand public's view of the US and its products has suffered a hammer blow."
He pointed to a report from Chinese newspaper The People's Daily which said local governments could help exporters find new sources of demand in non-American markets.
Chris Wilkinson, from consultancy First Retail Group, said channels such as Temu would "double down" on territories like New Zealand.
"They are adept, agile and aggressive in their marketing - demonstrated by their growth in this and other markets. It does seem that they've reached a saturation point now, with sales stabilising at an albeit high rate, so the question is 'what more could they hope to achieve from a market at this stage?'. However, we'll likely see continued incarnations of these direct-selling models - in what form or proposition we don't quite know yet."
A report by Tearfund suggested that a million New Zealanders had bought something from Temu and 14 percent had purchased from Shein.
Lang said the extent to which Chinese retailers would look to New Zealand would be tempered by the size of our market.
"There are around 16 countries with populations over 100 million, and 31 countries with populations exceeding 50 million. So, China is unlikely to make a major effort to increase trade with New Zealand in the short term. Larger markets will likely be the first priority."
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