Sunday, August 14, 2022

Jetkrate opens export door for small producers

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While Zoom may have eased some of the tyranny of distance for many New Zealand exporters during the pandemic, they have often also found their ability to capture, grow and expand market share a tough gig. An ex-Fonterra exec and his business partner have developed an online platform aimed to help smaller producers wanting to grow their overseas market.

Jetkrate co-founder Varun Khetrapal says many small businesses want to export their products, but have been put off by the paperwork and processes that involved.

While Zoom may have eased some of the tyranny of distance for many New Zealand exporters during the pandemic, they have often also found their ability to capture, grow and expand market share a tough gig. An ex-Fonterra exec and his business partner have developed an online platform aimed to help smaller producers wanting to grow their overseas market. Richard Rennie reports.

Varun Khetrapal spent some of his corporate years selling Anchor milk powder into developing markets of Africa, including the likes of Ghana and Nigeria, and saw firsthand the power of online platforms like Alibaba in those markets.

Despite the relative Third World status of some markets, customers had leapfrogged traditional bricks and mortar supply outlets, thanks to well-developed cellular networks enthusiastically embracing e-commerce.

Back here at home, he could see the opportunity to develop an e-commerce platform that would remove much of the complexity and paperwork from the task list of small to medium producers and retailers keen to open their doors to the world.

“In the past many have tried exporting but found it was uneconomical by the time you factored in the overhead costs of completing the likes of insurance, custom forms and managing the credit card risk of the transactions,” Khetrapal said.

Their concept of consolidating orders from customers purchasing from multiple domestic vendors became a reality over a year ago. They created Jetkrate, a multi-store marketplace that can upload product ranges, receive orders, box and dispatch mixed products to overseas customers.

“Our aim was to make the service one where the process of exporting for food and beverage manufacturers and retailers is as seamless as selling to a domestic customer, opening up the door for businesses that may not have the scale or resources to do it themselves,” he said.

At present the company’s main customers are expat New Zealanders, particularly those living in Australia, with a hankering for a broad assortment of products they are already familiar with.

“We have a client, Kiwi Treats in Melbourne, carrying a really wide range of products, including food, books and accessories. We have now got to the point where we can supply Vogels bread fresh, well within its ‘best by’ period,” he said.

With domestic hospitality businesses doing it tough here, the ability to realign to export sales in consumer-ready form without the need for bricks and mortar or in-market presence means Jetkrate offers a low-risk starting point for many firms.

Khetrapal said honey, wine and dairy products are among the key food products the company wants to build upon, given the extremely high regard all are held in by overseas consumers, almost regardless of what market retailers or producers are considering.

Research by the New Zealand Trade and Enterprise (NZTE) food and beverage initiative Made with Care has found that NZ wine in particular is the most recognised product from NZ, punching above its weight, given it is the item with the third-highest sales value after dairy and kiwifruit. 

Overall, NZ food and beverage rates highly for its ethical and environmental standards, and is well-regarded for the sustainability of its production.

Not charging retailers or producers to be part of the platform has Jetkrate focusing its earnings stream on its IP, namely the company’s ability to navigate customs, export regulations and packaging requirements.

A new company selling leather wallets is utilising the company’s skills to help navigate the tricky area of importing animal-based products to certain markets.

The partners are also aiming to start providing a chilled or frozen delivery service, with products limited to ambient temperatures at present.

Khetrapal has also been influenced by his experience selling infant formula and the role of the daigou, or the informal market channel where individuals were buying product here and taking it over to be sold in China. After a regulatory change two years ago, the channels were shut down with exporters required to have a licence.

“What we originally tried to do was formalise that channel as a legitimate pathway. But we believe the time may have come, given how familiar markets are with the likes of Amazon and TradeMe,” he said.

The next challenge for the business partners is sourcing more capital to grow the business with some strong interest reported, while they are also looking to NZTE resources to help expand further into high-volume Asian markets.

“We know from the New Zealand Story that our products rate very well in these markets and consumers are very familiar with e-commerce platforms, and it’s just a case of building their awareness and trust,” he said.

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