E-commerce entrepreneur debunks online marketing myths

SHAY WRIGHT RUNS A SOCIAL ENTERPRISE – AND A PURE E-COMMERCE PLAY.

Tue, 10 Nov 2020

Both the march of time and onset of the Covid-19 global pandemic have meant that much of commerce has moved online – but most New Zealand businesses still have no idea how to set up their shopfronts in the digital realm, according to one young entrepreneur.

Shay Wright (Te Rarawa, Ngāruahine, Ngāti Ruanui) and co-founder Travis O'Keefe run two businesses bordering on $2 million in revenue: one devises strategies for business, mainly Māori business, to fully embrace e-commerce; the other is an online seller of carefully chosen consumer products aiming to fill a data-driven niche in the market.

Wright’s work with fledgling entrepreneurs combined with his own endeavours have convinced him that few understand digital commerce, while his work in data analytics has helped him puncture a few myths New Zealanders hold dear.

One of the main ones, which is sure to place an arrow through the heart of Kiwis high on the country’s Covid-19 response, is that contrary to popular belief, the label ‘New Zealand made’ means little to the global audience buying products online. The labels ‘indigenous’ and ‘Māori’ are also not words you would want to lead any kind of digital marketing blitz with either, according to the data.

“We realised our assumptions do not hold, and almost any assumption you go in with about the market, the customers and therefore the products and ways to present them, could well be way off the mark,” Wright says.

“And that’s why we use data to determine the keywords we use and we way we market products. If we were to, say, sell a meat or honey-based product, instead of promoting it with the words ‘New Zealand’ or ‘indigenous’, the words we have found that would bring 100 times the traffic are ‘raw’, ‘organic’, or ‘keto’.”

— Shay Wright

Wright believes, for example, that many New Zealand honey companies fall into the trap of using the wrong words and present themselves sub-optimally online, coasting, for want of a better word, on the fact their product is mānuka – and will therefore sell itself. It’s the kind of thing he can now say with confidence.

Two years ago, he and O’Keefe established Nuku Ltd, to unlock the secrets of e-commerce. Their team studied the data and customer feedback of 2,000 products to identify gaps in the market. They decided to focus on lower-priced consumer goods and make them better than what was already on offer but still cheap to manufacture. Now they sell a range of products into the US via e-commerce platform, Amazon.

*Some of the early products sold by Nuku Ltd*

“All our decisions are data driven. We run a whole lot of algorithms and test keywords and other metrics and our system outputs for us that this product in this market presented this way and at this price point will be successful.”

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“And, as we have discovered, these products we have chosen, even if they are obscure, can have a huge margin when they are differentiated products.”

TE WHARE HUKAHUKA

For most people, this would probably be enough, but Wright and O’Keefe believe in the potential for businesses to be a vehicle for social impact, and have a global ambition to “improve the lives of 10 million indigenous people”.

They are using the lessons learnt from Nuku Limited to feed back into their main social enterprise, Te Whare Hukahuka, which works to grow Māori entrepreneurship.

Named after the ‘hukahuka’, the froth on top of the waves and being a metaphor for the domain of creativity and innovation, their social enterprise was conceived at The Icehouse in 2013 and spun out a few years later. Now generating just more than $1 million a year, they have won a number of awards, earning Wright has collected slew of accolades including Forbes’ 30 under 30 Asia list in 2016, 2019 Impact Award for Enterprise, and finalist for 2016 Young Enterprise Alumni Award, the 2017 Young NZ Innovator Award, Matariki Young Achiever Award and 2019 Young New Zealander of the Year. This year he made the One Young World Entrepreneur of the Year shortlist and was recently a speaker at this year’s Tainui Economic Summit.

In terms of getting their clientele set up for global e-commerce, Te Whare Hukahuka may have just pulled off their most significant achievement – a partnership with global Canadian e-commerce giant Shopify, which has announced it is partnering with Te Whare Hukahuka to help Māori businesses establish themselves digitally. It is part of a strategy the company has to foster indigenous retailers around the world.

As part of the partnership, Te Whare Hukahuka will roll out its flagship three-month e-commerce and digital marketing programme Ka Hao i te Ao to other indigenous nations, aimed at making entrepreneurship accessible to everyone.

Te Whare Hukahuka this year worked with Te Puni Kōkiri and Shopify to offer 65 scholarships worth $412,500 wanting to get online, and are now working with New Zealand Trade & Enterprise to support additional iwi and Māori businesses.

The partnership will see Shopify help indigenous business people access its intuitive, sophisticated e-commerce platform by providing templates and tools to make it easy to go online as well as drastically reducing costs to get involved, and other forms of support.

Wright says it is early days, but so far there have been some real gains for those in the programme.

“We know how to work with indigenous communities, and Shopify will bring all of the resources, experience, intelligence and e-commerce to those communities. It’s early days but we’re seeing it result in some amazing outcomes for local businesses here, as well as a number of the indigenous companies that they’re working with around the world.”

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BIG DREAMS

Wright’s dual ownership of both a social enterprise and a purely commercial play fit nicely with the kinds of dreams he once harboured as a child growing up in the tiny rural village of Takahue, just south of Kaitaia in the Far North.

From a family of teachers he gained an appreciation of education and from his father’s engineering business came to the idea of business. But it was being given Robert Kiyosaki’s Cashflow Quadrant as a young man that introduced him to the idea of the difference between being employed, being self-employed, being a business owner, and being an investor.

“That was the first time I’d seen the differentiation between being self-employed and being a business owner. So, I think, for many people, we assume they’re the same thing.

Wright downloads his IP to a Maori health provider

“And so the lesson I took from that was, if you are self-employed, you’re selling your time. And any moment when you’re not working, you’re not earning, right? Whereas, when you’re a business owner, you are the owner of a system that produces profits, regardless of your effort.”

A second lesson was to come. While at Auckland University studying commerce and law he interned at The Icehouse and was charged with writing up tales of success. An interview with Jucy co-founder, Tim Alpe, convinced him of the power of edgy, memorable branding, no matter how mundane or dull a market segment may be.

But it was a conference on the Māori economy that really opened Wright’s eyes to the need to extract more value out of billions of dollars of resources held by iwi up ad down the country, and the young man ditched his studies to start up the ‘Māori Development Unit’ of The Icehouse with O’Keefe shortly thereafter.

“We got to the point where after three years, we had built relationships with Māori, had signed our first iwi partner, had trained a couple of hundred Māori business leaders and tested different models and were breaking even,” remembers Wright.

“It coincided with The Icehouse’s change of strategic direction and was an opportunity for us to set up a standalone social enterprise to focus specifically on working with Māori.”

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FUTURE FOCUS

Te Whare Hukahuka has some 500 Māori past and present clientele, one of which is the Tuhoe Tuawhenua Trust, which needed help creating viable commercial streams from the resources under its kaitiakitanga (guardianship) – mainly Te Urewera forest in the Bay of Plenty and, among other things, the bees on that land. Honey was an obvious answer, and Manawa Honey was established. But their honey was made mostly from native flora and fauna, and not much from mānuka, which attracts the highest premiums.

Te Whare Hukahuka and Tuhoe came up with the idea of making gift packs of the assorted honey made from the forest – including Tawari, Rewarewa, and Pua-a-Tāne Wild Forest Honey – which up until COVID-19 hit was generating $1m in sales through supermarkets and tourism outlets across New Zealand.

Manawa Honey range: Honeys of Te Urewera

The problem is that supermarkets take some 52% of the retail price from such a product, the producer carrying all production, packaging and distribution costs, leaving not much in profit to put towards compensating iwi members or to fulfil the raft of social goals the group has for itself.

That drive to allow Māori to own more of their value chain from production through to retail also sits behind the establishment of Nuku. Although the business is currently selling niche products, one day it will be a channel through which Māori products – particularly food and beverage – will be sold.

The Māori part of the branding story, while important, will be told after global consumers get drawn in by the right keywords, however.

“We have spent hundreds and thousands of dollars learning e-commerce skills from global experts and even just in terms of the basic knowledge that we share, people are surprised – what that shows us is those who have a deep appreciation of e-commerce concepts, and the ability to leverage data, like real time algorithms and data, have such a competitive advantage when it comes to e-commerce”

— Shay Wright

“Many New Zealand businesses are not doing it well and if you’re not doing it well, there’s almost no point doing it at all – and that situation is alarming, really, given that e-commerce has never been more important for so many businesses. We want to fully equip indigenous businesses to compete in the new world and it’s a global ambition.”

By Dita De Boni
Senior journalist
Contact the Writer: dita@nbr.co.nz

Original story link: https://www.nbr.co.nz/story/e-commerce-entrepreneur-aims-see-10-million-indigenous-businesses-thrive-online