Design flaws led to Ferrit’s downfall sings out the Independent, but it’s a bit more complicated than a pithy headline. I’m quoted in the article, and so am providing a bit more background to those quotes. I also promise that these are the final blog postings on Ferrit. Really.
The Market Space
The first question was whether they were in the right space. To me there was indeed a gap in the space, but the way the went about addressing it was not. Indeed Telecom would have served NZ ecommerce better by concentrating on their core products, and improving the quality and penetration of broadband.
While Trade Me had/has done better than the rest of the world (e.g. in listing numbers) at establishing a marketplace for small sellers, there was and really still is a gap in the NZ ecommerce market for medium and large businesses. Put simply these businesses were not moving online fast enough and were and are, really behind the times.
This was partially inexcusable by those businesses, as the larger retailers couldn’t make the numbers work as they were confronted by a relatively small NZ market. The market was constrained by the tiny size of New Zealand’s economy, by the relative merits of online versus offline and importantly the access to the economy was constrained by poor broadband penetration and quality.
(Trade Me managed to succeed in New Zealand by taking advantage of New Zealand’s high internet penetration yet low broadband penetration. Their website was designed for dial-up, and only in recent times is becoming more suitable for broadband connections. However doing this required incredibly really talented people and a relentless focus on usability and speed.)
Internet use and commerce is directly related to speed of access – with those with faster connections are more likely to read news, communicate and shop online. (no source sorry) Telecom would have accelerated New Zealand’s online retail (and media) sector by simply focusing on ramping up broadband quality, speed and penetration. Their efforts were poor, and the service in New Zealand still inexcusable.