Liam Dann: NZ Herald business editor at large on Temu's harmful impact on local businesses

According to new reports, one in four New Zealand adults have bought something off Temu in the last three months.

The Chinese e-retailer, alongside similar fast-fashion giant Shein, has experienced a significant rise in popularity thanks to cheap prices and free shipping.

NZ Herald business editor at large Liam Dann says this boom in demand is harming traditional retailers, who are experiencing loss in demand during the current economic downturn.

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Episode Transcript

Speaker 1 (00:00):
It started the program. We talked about the fact that
like one in four of us have bought something from Timu,
the Chinese retailer, in the past three months. It's been
hugely popular, a popular thanks to the very cheap prices
and free shipping. Liam dan Is, The Herald's Business editor
at large, with us on this alien Get a heather
you brought from Timu?

Speaker 2 (00:17):
No, No, never have. Actually I guess my kids might have.
I don't know. And then there's another one in the
story I was reading a fourteen percent of Kiwis have
brought something from Shane Shine Sheen.

Speaker 1 (00:28):
We're not sure how to pronounce it.

Speaker 2 (00:30):
This is like me looking at the bands lists on
the rock music festivals now and it's not really.

Speaker 1 (00:35):
You remember this a case. So Kenzie the Zuma, are
you a zoomer, Kenzie, Kenzi the Zoomer is still at
work at the moment, which is an unusual thing. And
she says it's Sheen.

Speaker 2 (00:46):
Sheen, Okay, very good, and I'm sure it's probably it's
probably really great, high quality stuff. As I don't know.

Speaker 1 (00:52):
It's Rubbishkeenzi, it's total rubbish, she said, It's just nonsense.
But it's cheap right, So if you're just going to
use it the one time, then happy days, like for
a party or whatever. Okay, what is it doing to retailers?

Speaker 2 (01:04):
Well, I think it's a concern because obviously retailer has
been sort of down and out having a terrible time
because of the you know, inflation, recession, all these domestic
issues that we've got, and then it feels like we're
going to sort of wake up from that, and this
structural issue, this structural change in retailing is going to,
you know, just just make it that much harder for

(01:25):
some of these retailers to come back. I recall it
was only Dune actually, but in the last GDP figures
we saw signs of this because there was buried in
there there was a statistic for consumer imports of low
value goods that showed that they had risen fifty percent
in the last year and up twenty percent in the

(01:45):
March quarter alone. So if that's you know, if that's
the kind of trajectory we're on and we've already got
a quarter of Kiwi's using Timu, you've got to wonder
where it ends. I hope it ends with them people
realizing they probably need less stuff and maybe by some
more high quality stuff and have it last. But I
don't know that that trend is suddenly about to descend

(02:05):
on us.

Speaker 1 (02:06):
Is this I mean, so this is obviously part of
the warehouses problem. Is it possible for us to kind
of extrapolate how much of this is that is causing
the warehouses problems and how much of the warehouse's problems
is just the warehouse?

Speaker 2 (02:18):
Yeah, that's right. I think I think it's an issue
for retailer is like a warehouse because you know, if
you're a small retailer on the on a main street
New Zealand, I guess you can go up up market
and you know, sell the good stuff that people buy
for special occasions and things, and then you're not not
competing with Timu. But if your model is based on
importing cheap manufactured Chinese goods, then they're cutting out the

(02:40):
middleman here and that's the problem. And look, I don't know,
it's multi factoral. The warehouse is issues, so I would
be hesitant to say it's one thing, but I think
this is a sort of a big downward pressure on
sales even beyond the sort of short term economic cycle.
So it will be interesting to see if it can
overcome that in the next year.

Speaker 1 (03:00):
Hey, listen on the inflation number yesterday, and what the
ocr does Are you picking fifty or seventy five?

Speaker 2 (03:07):
Yeah? I reckon maybe seventy five.

Speaker 1 (03:08):
I mean, you know, yeah, I meansh this is the thing.
If they go seventy five, right, that is an admission
that they stuff this up.

Speaker 2 (03:16):
Yeah, I guess it's how much you know, But surely
they've got to do the right thing for the economy.
And I don't know that seventy five is yet, but
there are signs that, you know, if the economy is
really as bad as people are sort of saying and feeling,
and you know, you could make the case it was
a special event COVID the pandemic inflation happened. Rates had

(03:38):
to go up, and they had to go up in
a sort of a crisis mode. If the crisis is over,
they should come down fast. And you know, whether who
was right or wrong or whatever, that sort of secondary
to getting the settings right quickly. I know it's still
an outside chance, but the markets have it about forty
percent odds on a seventy five point basis cat, so
you know, it'll only take a little bit of bit

(03:59):
more bad news. Whose the unemployment data coming in a
bit lower, a bit higher I guess it would be,
and you could could easily see.

Speaker 1 (04:06):
That brilliant het. Liam love chatting to you, really appreciate
its Liam Dan, the Herald's business enter at large.

Speaker 2 (04:12):
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