Kiwi selling website Trade Me enters its twentieth year this week with stiffer competition than ever before.
Chief executive Jon Macdonald said while the company’s New Zealand focus had been a "great defence" against global players, it needs to work as hard as possible to stay relevant to Kiwis with other internet trading sites “certainly present” in the country.
"We’ve got to make sure that we’re making use of technology - everything from machine learning to mobile to watches and so on - so we’re offering as good an experience as we can,” chief executive Jon Macdonald told 1 NEWS.
Mr Macdonald said the business continues to grow in profit.
Revenue was $250.4 million in 2018, up 6.6 per cent from 2017.
Investment advisor Grant Davies said Trade Me was one of the first trending websites in New Zealand.
"They’ve gone from plucky start up in 1999, taking on incumbents in the classified area, developing their own business to become the incumbent themselves and now facing disruption from other quarters as well so that’s all within 20 years."
A spokesperson for Trade Me said the company’s inception is believed to have taken place after a young computer consultant called Sam Morgan had a frustrating experience buying a second-hand heater for his Wellington flat.
The first listing on Trade Me was his own TV and within 2 days the website had 20 registered users.
New Zealand finally had an option to trade rather than through newspaper classifieds or auctions.
'It’s simply convenience, really - the ability to sit at your home computer at night and enter a few items for sale and then check your email the next day,’ Sam Morgan told TVNZ’s Tonight at the time.
After six weeks, the website had 500 users and the next year success fees were introduced.
Mr Macdonald said he was working with Mr Morgan at the time the business was created, with Mr Morgan seeing how other staff members were coding and then using his evenings to develop his own skills.
“What we were asking people to do was very strange at the time – buying something you’d never seen off someone you’d never met,” he said in a statement.
“We started just with people buying and selling shirts and tables and things like that and then we expanded into cars and into houses and into jobs and now we aim to be involved in all the things that are important to Kiwis,” Mr Macdonald said.
By 2005, the business was officially the country’s most popular website and the following year it was sold to Australian publishing company Fairfax for 700 million.
By 2012, Fairfax had sold all its shares for the company on the New Zealand Stock Exchange.
Today, 1.8 million Kiwis visit Trade Me each day with the majority accessing the website through mobile phones.
The most-viewed auction was in 2006, when the handbag Tana Umanga used to whack teammate Chris Masoe with in a Christchurch bar, was listed.
The listing got 1.07 million views and sold for $22,800.
Other popular listings include a possessed printer (2013, 1 million views), buying the chance to blow up the quake-damaged Radio Network building in Christchurch (2012, 459,420 views), a pita bread which the seller claimed looked like Jesus Christ (2009, 276,094 views) and a $100 note that was titled "Unwanted gift" (2015, 268,046 views).
Other bizarre, rare and sometimes controversial listings over the years include a bag made out of a cat, a lucrative "MAORI" number plate, tattoo rights on a Lower Hutt woman’s bottom, a stockpile of the original recipe Milo, Marmite during a hiatus in the product’s production, Piri Weepu’s hair cuttings and a giant Buzzy Bee that was previously used in parades.
Mr Macdonald said his favourite “crazy” listings were an amphibious van called "Roofless" which was driven across the Cook Strait and a bulk lot of 50 giant, inflatable poo emojis.
“I don’t know what you want with those but they sold them none the less.”
He said the last thing he brought was a typewriter for his eight-year-old daughter, insisting he doesn’t get first dibs on listings.
“I don’t want to be the guy that gets the red face (rating). I love it, I really do,” he said.
Trade Me’s pending sale to British company Apax Partners will be “another blow” for those on the NZX, investment advisor Grant Davies said.
“It just offers a point of difference to a lot of companies on the NZX, there’s not much in the way of successful tech stocks on the boards these days… I know advisors and investors will be having to look further afield for those sort of opportunities.”
Mr Davies said a lot of Trade Me’s success comes down to benefiting from the network effect right from the early years.
“People have built their own brands on those platforms over the years. They got in their early enough to beat the likes of Amazon and eBay to the punch there.”
He said the star rating for users’ conduct has helped lock people in to using the website by being able to make informed decisions on potential purchases.
Mr Davies said Apax Partners will be have to be careful about how they make money if they take on the business, with pressure on the company’s margins and Facebook Marketplace becoming a strong competitor.
“Trade Me has developed over the years, it has gone through high growth phases but at the moment it’s more of a cash cow, it is the incumbent… but there’s probably not a lot of scope to increase those at this stage.”
He said increasing listing fees would be a limited option for profit growth due to disruption in the market.
Some people 1 NEWS spoke to used the site to regularly buy and sel,l but others used Facebook Marketplace.
“I used to use it a lot… just for buying clothes and stuff but I think it’s a lot easier now to just find it on Facebook or Instagram,” one woman said.
A man that regularly uses the site said he thinks there shouldn’t be fees for both listing an item and also when it successfully sells.
“But what’s the alternatives, if you want to sell something online in New Zealand then you use Trade Me, there’s no eBay presence so it’s Trade Me or nothing really,” he said.
Trade Me shareholders will make a decision on the Apax Partners deal in April, and if a sale is approved, it would be completed by May, Mr Macdonald said.