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Talking to Ferrit
Posted on 15-Aug-2006 11:21 by M Freitas. | Tags Filed under: Articles.

Some people will remember that Ferrit, Telecom New Zealand's e-commerce attempt, had a funny start - we discovered was a "sex e-commerce" site, completely unrelated to the local

Since then things have changed a bit, and Ferrit has bought the domain Was it a stunt to attract even more people to the site?

Not according to Ralph Brayham, General Manager, and Steve Plank, Chief Information Officer at Ferrit, the Telecom New Zealand on-line retail service.

They say the .com domain was bought soon after the service launch on 28 November 2005, for about US$11,000.

The development cycle was fast and agile. From concept to launch the team of 50 spent about 4 to 6 weeks, starting with an idea in late July, coding from August and high profile launch in November.

Ferrit started as a "window" for on-line retailers, replacing Telecom New Zealand's Xtra Shopping. The service initially only listed products, specifications and prices, but referred on-line shoppers to the retailers' websites for the final transaction.

The company is now preparing for the launch of Phase 2 which will bring a complete on-line shopping experience. The company will not hold products, which will still be shipped from the retailers' depots, but consumers will be able to select products, find more about them and complete the purchase all at the same website.

Ferrit also wants to be a platform for those retailers with currently no on-line presence at all. Just like a bricks-and-mortar shopping centre.

Prices shown are set by retailers and do not have any Ferrit-specific discounts, but over time these may be offered.

The service is currently based on HP hardware, running Microsoft IIS, Microsoft SQL and ASP. When asked if there were plans to migrate this to the ASP .Net in the future, Steve Plan told us that the service is very flexible and its Service Oriented Architecture allows them to be platform independent.

Phase 2, which is coming in 4 to 6 weeks from the date of this article, is actually version 3 of their system if you count the original prototype, which was quickly created to sell the concept. The platform is based on ePages Intershop, a German product, but fully customised in New Zealand with support from the developers. The whole team was based in New Zealand during development.

Ferrit is now receiving about 125,000 unique visitors monthly, with a 15% to 20% monthly growth. The company is seeking to have 300,000 unique visitors per month by Christmas 2006.

They haven't identified competitors in New Zealand, but on-line shoppers are very familiar with Amazon services. Ralph Brayham thinks the New Zealand on-line retail market is under developed, saying that in the US 5% of shopping is done over the Internet, with this number reaching 10% in the UK, but only $200 million is spent on-line in New Zealand. He thinks a conservative estimate is a 12 times growth, but this could reach any number between 16 and 20 times.

The main activity for Ferrit has been creating the local on-line market, after some failures from other players such as the website. Ferrit is a market maker, and spends most of the time educating users. They do anticipate a rapid market growth though. The only comparison with Trademe is in terms of go-to-market strategy - while Trademe took 9 years to get to the point they are at in mid 2006, Ferrit wants to do it in 2 or 3 years.

Why did Telecom New Zealand decide to join the on-line retail space? Mainly because the company was already playing on the field as Xtra Shopping (now replaced by Ferrit) and the Yellow Pages.

This was a risky venture for Telecom New Zealand, but it seems to be working so far in terms of retail acceptance. At launch they counted 53 retailers and this number is over 150 now.

Their main challenge? To help people understand what Ferrit is. But they think they are doing well. Internet shopping is for a percentage of the on-line users, not for the full population. They think they have a cool site, and are planning even better functionality in the near future.

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