Digital distance trips up NZ exporters

New Zealand exporters know that doing business overseas comes with its own etiquette. They would have sat through cross-cultural briefings about local customs, from exchanging business cards respectfully in parts of Asia to understanding the subtleties of face-to-face meetings. But while we might be used to paying attention to cultural signals in the physical world, the digital world has complicated matters.

During the Covid-19 pandemic, an expert told me about a clash of digital etiquette during online meetings between New Zealand exporters and prospective Asian business partners. The overseas participants joined the online meetings in suits and ties, with carefully curated backgrounds and translation support. Their New Zealand counterparts had a more relaxed and informal style, reflecting a different approach to online business interaction. Both sides were using the same technology but weren’t playing by the same rules.

The recently signed free trade agreement between New Zealand and India is expected to create new opportunities for exporters. Trade agreements can open doors, and digital technology should make foreign markets easier to reach, helping overcome our tyranny of distance.

The problem is New Zealand exporters often don’t operate in the same digital world as their partners and customers, or in the same way.

Researchers have a name for this gap – ‘digital distance’. Just as countries differ in their language, culture, and regulation, they differ in the platforms they use, the way they communicate online and what customers expect from businesses.

A New Zealand company may be comfortable with Facebook, Instagram, or WhatsApp, but in China, digital life is more organised around platforms such as Douyin, Xiaohongshu, and Weibo, platforms many New Zealand exporters know little about.

On a recent visit to Shenzhen in southern China’s Guangdong Province, with the MBA cohort of the University of Auckland, we found how difficult it would be to do business there without the mobile “super-app”, WeChat.

Its mainland Chinese version, Weixin, looks a little like WhatsApp, but it goes far beyond messaging and calling. People use it to communicate with business partners, follow companies and make payments.

Weixin also hosts “Mini Programs”, which function like apps within the platform. These allow users to book transport, find restaurants, shop, and access other services without leaving the platform. In this way, Weixin brings together communication, commerce, payments and everyday services in a single digital ecosystem.

Digital distance can also result from differing expectations about how companies interact with customers. Customers in China and parts of Southeast Asia may expect brands to respond quickly through digital channels and talk to each other by livestreaming, in which companies demonstrate products, answer questions, and sell directly to viewers.

New Zealand oral-care company Grin Natural shows what can be achieved on such a platform. The company, founded by Tara Tan (eight years after graduating with her masters in Commerce from the University of Auckland) partnered with Chinese livestreamer Li Jiaqi (Austin Li) during the 2021 Singles’ Day campaign. It sold more than 115,000 tubes of toothpaste in less than two minutes.

Exporters need to get used to different digital content and routines if they want to take advantage of the online world. Businesses that don’t adapt risk missing opportunities.

In Switzerland, e-commerce has developed around platforms such as Galaxus, now Switzerland’s largest online retailer. It also operates a selective marketplace, allowing approved merchants to sell products ranging from electronics and skincare to home and kitchen items, food and beverages.

New Zealand brands such as Blunt (premium umbrellas), Mons Royale (outdoor performance clothing) and Antipodes (skincare and beauty products) are sold on the platform. Other Kiwi exporters would be wise to understand how such platforms work; it could be as effective as having their own website.

Even within the same market, two businesses can operate in completely different digital worlds. A New Zealand exporter may use sophisticated customer-management software, real-time data, and Teams meetings. Its overseas distributor might prefer spreadsheets, personal messaging, and doing business face-to-face.

When businesses are speaking in different digital languages, things get lost in translation. When exporters choose an overseas partner, they should ask more than whether the company has good contacts or a strong distribution network. They should also ask how information is shared, how customers are engaged, and whether the two firms get on in the digital world.

The issue is not only which platforms businesses use, but if they have similar expectations about how it should be used. Digital platforms are not just sales and advertising channels. They are also where firms learn and build trust with each other, see what their competitors are doing, and understand how customers preferences’ are changing.

For small firms, digital platforms can help level the playing field, enabling them to project the professional presence of much larger firms.

New Zealand may have an advantage that is helping us navigate these differences. We are a diverse country with communities closely connected to many of our most important export markets. Our Indian, Chinese, Korean, and other diaspora communities have knowledge about languages, consumer behaviour, and digital habits that can be difficult for businesses to get their heads around from a market report.

Our tertiary institutions are another underused resource. International students and New Zealand students with close family and cultural ties to these markets can bring first-hand knowledge of how digital platforms are used in their countries. Many are digital natives who have grown up with the online conventions of their home markets. Exporters could benefit from tapping into that resource.

Exporters need to invest in digital market knowledge, not just market access. Trade agencies, universities, and business organisations can help by drawing on diaspora expertise and connecting firms with people who understand how overseas digital markets operate in practice.

Of course, understanding the right digital platforms doesn’t replace a good product, trusted partners or a serious export strategy. But opening markets through trade agreements is only part of the job.

New Zealand is a small economy far from many of our major export markets, but if we want to grow our exports, our businesses need to understand not only where their customers are, but how they do business digitally. In today’s economy, closing the digital distance may matter as much as closing the geographical one.