Story: Digital media and the internet

Page 3. E-commerce

All images & media in this story

Trade Me

In 1999 a young man, Sam Morgan, founded Trade Me – a web venture that would have more impact on the local media industry than any other. In most countries the US-based eBay dominates the online auction business, but in New Zealand the locally founded Trade Me became the big player – and all by word of mouth, without advertising. According to Nielsen Online Ratings, in 2013 Trade Me was the most popular New Zealand-based website, with more than 1.8 million individual users every month, and the fourth most-visited by New Zealanders overall, behind Google, Facebook and YouTube.

Quick fortune

Sam Morgan started Trade Me in 1999 at the age of 24. Seven years later, in 2006, Trade Me was sold to the Australian-based media company Fairfax for NZ$700 million. Morgan received $227 million. The site was listed on the New Zealand Stock Exchange in December 2011, and Fairfax sold the last of its stake in Trade Me a year later. Morgan, having fulfilled a contractual commitment to continue to manage Trade Me, became an investor and philanthropist.

Although Trade Me's rise is seen as having harmed the profitability of newspapers – by taking away classified advertising revenue – Trade Me is a media organisation in itself. The Trade Me Community message board is the country's largest community-moderated discussion forum. On at least one occasion Morgan was personally contacted by a judge concerned that a court suppression order might be flouted on the often-unruly forums.

Employment and real estate

Trade Me achieved success, not only in online auctions, but also in real estate and employment listings. Here it competed successfully with the specialised sites which had emerged. In the employment area Seek had over 16,000 jobs advertised in October 2013, while real estate sites ranged from those of established agents such as Harcourts (which had over 11,000 listings) to generic sites such as open2view.com. A big advantage real estate websites had over traditional advertising methods was the ability to show multiple images of every house.

Banking

Apart from Trade Me, the most popular New Zealand-based commercial sites were banks. ASB opened the first online banking system in 1997 and by 2000 all major New Zealand banks had followed. By 2013, 77% of internet users were logging on to their internet banking accounts at least once a week. Increasingly, New Zealanders were also paying bills over the internet (81% did so). Banks responded to the situation by reducing the number of their counter tellers.

Travel

In 1996 Air New Zealand issued its first electronic ticket and by 1999 a million such tickets had been issued. From 2002 the airline promoted online booking aggressively and other travel operators such as New Zealand Rail and travel agents followed suit. In 2011 about 65% of internet users booked travel over the web. People planning travel increasingly used sites that compared prices, such as Expedia and webjet.

Entertainment

Internet booking of entertainment such as sporting fixtures or concerts began seriously with Ticketek’s establishment of an online membership database and personalised log-in in January 2000.

Music began to be purchased online in place of compact discs (CDs) with the emergence of Apple’s iPod portable music player in the first few years of the century. Ebooks came some years later, especially with the appearance in New Zealand in 2010 of Kindle readers. The effect of these technologies was that most music and increasing quantities of literature were purchased from major North American outlets such as Apple and Amazon. By 2013 two-thirds of internet users downloaded or listened to music online; 15% did so daily.

How to be number 1

In September 2013 the 16 year old Auckland singer Ella Yelich-O’Connor, better known as Lorde, achieved the number 1 single in the United States with her song ‘Royals’. Her success was in large part achieved through clever use of websites – SoundCloud and YouTube – on which she posted her music, her own website (lorde.co.nz), iTunes, Facebook and Twitter.

Younger New Zealanders began to spend more time playing games online. Among those aged 12 to 19, 84% of internet users did so in 2011. By 2013 people rated television and the internet as equally valuable sources of entertainment; significantly higher than radio.

Shopping

Younger New Zealanders were less likely to have a credit card which restricted their ability to shop online. But about 80% of New Zealanders aged 20 to 59 regularly shopped online in 2011. Purchases ranged from electronic equipment through to clothes for which firms like Ezibuy, originally a mail-order operation, emerged as online retailers. By the 2000s it had become possible to do supermarket shopping on the web.

Effects

The development of these forms of e-commerce in New Zealand had major social impacts. Many retail outlets began to suffer and even disappear from the cities and towns of the country – second-hand shops, travel agents, CD stores, and even bookshops.

How to cite this page:

Russell Brown, 'Digital media and the internet - E-commerce', Te Ara - the Encyclopedia of New Zealand, http://www.TeAra.govt.nz/en/digital-media-and-the-internet/page-3 (accessed 15 December 2017)

Story by Russell Brown, published 22 Oct 2014