New Zealand Professional Investment Services Firm

Forsyth Barr

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

New Zealand Professional Investment Services Firm, Forsyth Barr

Equity Bottom-Up

<h2>Transport Titbits — Ecommerce and B2C Parcel Trends</h2>

NZ Post has published “The Full Download”, its annual review of ecommerce trends by New Zealand shoppers. Ecommerce is a key driver of its market leading B2C (business to consumer) parcels business and continues to deliver very strong growth for the retail supply chain. The report highlights a number of key data points:
<ul>
<li>Online shopping accounted for 9.8% of retail spending at the end of 2019;</li>
<li>Online sales grew +13% in 2019 (down from +16% in 2018) compared to just +2% for traditional retail;</li>
<li>Domestic online is continuing to grow strongly, up +17%, compared to international online up +5%;</li>
<li>The clothing &amp; footwear category grew +20% and grocery was up +18%;</li>
<li>2m kiwis shopped online in 2019 accounting for ~50% of the adult population;</li>
<li>22% of New Zealand adults are regular online shoppers (transact more than once per month);</li>
<li>Online shoppers on average make 22 transactions annually;</li>
<li>Average spend per transaction is now NZ$107 up from NZ$101 in 2018;</li>
<li>The one day shopping events Black Friday and Cyber Monday represent the annual peak of Ecommerce activity in New Zealand.</li>
</ul>
The key shopping dates in late November/early December including Black Friday and Cyber Monday have consolidated their position as the annual peak of ecommerce activity. While the peak for bricks and mortar retail is the week leading up to Christmas (week 52), week 48 is the peak for online shopping. Seasonality is becoming more acute in online shopping with +12% transaction growth in the December quarter, compared to +5% to +6% growth in the first three quarters of the year.
The NZ Post report only considers 2019 online shopping trends. In light of COVID-19 the sector has had a significant step-up in activity with industry feedback suggesting business-to-consumer (B2C) parcel volumes have experienced a substantial boost. While growth rates have softened since Alert Level 3, they remain above pre-COVID-19 trend rates. The challenge for the parcel delivery industry is the low margin and low return on capital nature of B2C parcels.&nbsp;Freightways&nbsp;has announced a further price lift in its 'pricing for effort' initiative from 1 August 2020, which will accompany a CPI-type general rate increase for all parcels. However, in order for its 'pricing for effort' increase to stick and enhance B2C margins against a backdrop of rising costs, it needs other industry players to follow suit.
Transport Chart of the Week: Online spend through the December quarter in New Zealand
<figure class="editor-figure mceNonEditable"><img src="https://mail.google.com/mail/u/0?ui=2&amp;ik=f57c39853c&amp;attid=0.1&amp;permmsgid=msg-f:1672365582556672751&amp;th=17356fa302e132ef&amp;view=fimg&amp;sz=s0-l75-ft&amp;attbid=ANGjdJ-iSuHzHktCzLKLTjexHf4u8p331xUANW8NI4fI6SgKVFGL-QL6QBT9aQs6fEx7cr6lJgdR9TzEISjj_lv1FCttbPbITbvlxYePHOnfm-X2f7avGO2GBS0H69k&amp;disp=emb" width="803" height="364" class="editor-image img-responsive" data-image-whitelisted=""></figure>
Source: NZ Post
Andy Bowley&nbsp; Head of Research <a href="https://www.forsythbarr.co.nz/" target="_blank" rel="noopener">Forsyth Barr Limited&nbsp;</a>
M: +64 21 338 941 |P: +64 4 495 8246 |TF: 0800 367 227&nbsp; Level 22, NTT Tower, 157 Lambton Quay, Wellington

Transport Titbits — Ecommerce and B2C Parcel Trends

NZ Post has published “The Full Download”, its annual review of ecommerce trends by New Zealand shoppers. Ecommerce is a key driver of its market leading B2C (business to consumer) parcels business and continues to deliver very strong growth for the retail supply chain. The report highlights a number of key data points:

Online shopping accounted for 9.8% of retail spending at the end of 2019;
Online sales grew +13% in 2019 (down from +16% in 2018) compared to just +2% for traditional retail;
Domestic online is continuing to grow strongly, up +17%, compared to international online up +5%;
The clothing &amp; footwear category grew +20% and grocery was up +18%;
2m kiwis shopped online in 2019 accounting for ~50% of the adult population;
22% of New Zealand adults are regular online shoppers (transact more than once per month);
Online shoppers on average make 22 transactions annually;
Average spend per transaction is now NZ$107 up from NZ$101 in 2018;
The one day shopping events Black Friday and Cyber Monday represent the annual peak of Ecommerce activity in New Zealand.

The key shopping dates in late November/early December including Black Friday and Cyber Monday have consolidated their position as the annual peak of ecommerce activity. While the peak for bricks and mortar retail is the week leading up to Christmas (week 52), week 48 is the peak for online shopping. Seasonality is becoming more acute in online shopping with +12% transaction growth in the December quarter, compared to +5% to +6% growth in the first three quarters of the year.
The NZ Post report only considers 2019 online shopping trends. In light of COVID-19 the sector has had a significant step-up in activity with industry feedback suggesting business-to-consumer (B2C) parcel volumes have experienced a substantial boost. While growth rates have softened since Alert Level 3, they remain above pre-COVID-19 trend rates. The challenge for the parcel delivery industry is the low margin and low return on capital nature of B2C parcels.&nbsp;Freightways&nbsp;has announced a further price lift in its 'pricing for effort' initiative from 1 August 2020, which will accompany a CPI-type general rate increase for all parcels. However, in order for its 'pricing for effort' increase to stick and enhance B2C margins against a backdrop of rising costs, it needs other industry players to follow suit.
Transport Chart of the Week: Online spend through the December quarter in New Zealand

Source: NZ Post
Andy Bowley&nbsp; Head of Research Forsyth Barr Limited&nbsp;
M: +64 21 338 941 |P: +64 4 495 8246 |TF: 0800 367 227&nbsp; Level 22, NTT Tower, 157 Lambton Quay, Wellington

Transport Titbits — Ecommerce and B2C Parcel Trends

Freightways Ltd

Transport Titbits — Ecommerce and B2C Parcel Trends