By Lucy Craymer
WELLINGTON--Auction website Trade Me Group Ltd.'s (TME.NZ)
greatest competition would come from the emergence of a completely
new model for online selling or a move by one of the global players
into the New Zealand market, Trade Me Chief Executive Jon MacDonald
told the Wall Street Journal Wednesday.
While a number of local competitors had tried to move into the
market over the last month, the company was "more wary" of someone
approaching the sector in a completely different way "like a
20-something-year-old out of their flat," or an international
player such as Google Inc. (GOOG) or Facebook Inc. (FB) moving into
New Zealand with huge resources and an international scale
operation, Mr. MacDonald said.
Trade Me, which is 51% owned by Australia's second-largest
newspaper publisher Fairfax Media Ltd. (FXJ.AU), is an online
market place where consumers can buy secondhand and new goods at
auction, book holidays, look for property or cars, and find a
partner. A number of local websites including Wheedle have tried to
set up in competition over the last month but have had to close due
to security or technical issues.
"They approached the market in very much the same way that Trade
Me does, so it is effectively doing exactly what Trade Me does and
we think after 13 years of practise we're better at it than anyone
else and we've built up over time a community of both buyers and
sellers" and that's hard to compete with, Mr. MacDonald said.
The company reaffirmed at Tuesday's annual general meeting that
it expects net profit of NZ$68.5 million (US$56.2 million) and
revenue of NZ$154.1 million in calendar 2012, although this remains
dependent on activity in the run-up to Christmas.
Mr. MacDonald said that the general items section of the website
was still experiencing the effects of competition from offshore
eCommerce, with volumes slightly softer than the company had
expected.
On the plus side, eCommerce offshore encourages people to shop
online, Mr. MacDonald said, but it also holds the risk that New
Zealand consumers will go directly to offshore sellers.
-Write to Lucy Craymer at lucy.craymer@wsj.com
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