Telecoms Online Store Is Finally Being Eradicated

By tonyhughes Hughes, in , posted: 12-Jan-2009 14:02

The following announcement from Telecom New Zealand regarding the closure of its loss-making online shopping portal -, which has consistently failed to impress, given the sheer amount of undisclosed millions of dollars in development, marketing and running costs comes as no surprise to anyone with an elementary understanding of e-commerce, business and/or 3rd Form Economics, yet was much much later than predicted - perhaps due to Telecoms stubborness in wanting Ferrit to own the e-commerce market in New Zealand for brand new consumer goods, gifts, electronics and more.

Perhaps Telecom simply underestimated the power that Trademe wields over the NZ online marketplace, and the fact that successful web businesses are often born with a unique idea that the web populace latches onto, and that deciding "Hey lets open a website, and be successful by pouring millions and millions of dollars into it." is NOT actually a good web strategy.

With so many people knowing for so long that Ferrit was a dead... well... uh.... Ferrit - forever doomed to not achieve any profit - let alone any return of the original investment itself, you have to wonder why Telecom itself stumbled so badly here.

A legacy of Theresa Gattungs old guard perhaps? Followed by a cleanup crew led by Dr Paul Reynolds?

Score: F- (Please try MUCH harder next time, and monitor your progress with a view to killing dead projects off BEFORE massive investment and a pot-committed situation arises).


[This article now contains 38% better england than it did a few minutes ago]

Telecom has decided to close its online shopping mall Ferrit as part of the company’s focus on the delivery of its core services.

The decision reflects that there has been a range of changes in both the telecommunications landscape and the company’s strategic priorities since Ferrit first launched in 2005.

Alan Gourdie, Telecom Retail CEO, says Telecom’s strategy is focused on building customer preference in the key areas of mobile, broadband and ICT.

“In this changing market Telecom is directing its focus and resources to core business areas such as significant commitments and investment in next generation broadband and mobile technology to benefit our customers.

“Telecom’s aim in launching Ferrit was to help develop New Zealand’s
online retail market. Since 2005 we’ve seen a growth in retail adoption of online with many retail players adopting ecommerce and web capabilities.

“Ferrit has continued to grow during the past three years but the current retail environment has meant the break-even point has shifted out a number of years. The decision has now been made to refocus and resources will be directed to other areas,” says Mr Gourdie.

Telecom is advising its retail partners individually of its decision. Ferrit will stop taking online orders on Wednesday 14 January at 5pm but will continue to direct visitors to the retailers’ own websites from

Ferrit will be working to ensure all existing orders are received by customers in the normal delivery time.

Mr Gourdie says a number of the employees working on Ferrit have been involved from launch and have valuable new media and online expertise.

“Our priority will be to capitalise on these people’s skills wherever possible through redeployment to other parts of Telecom.”

Telecom continues to be an active player in the development of online content and applications in New Zealand through activity and partnerships such as Yahoo!Xtra, Telecom Business Hub and Xero and in the coming months will have other developments in the content area as it launches its new 3G network.

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Comment by paradoxsm, on 12-Jan-2009 15:17

Bugger, it had a rough start and was actually just becoming useful and I actually recently used it a couple of times when it was such a pain to go to the mall and also once when I forgot something from a shop.

Shame they poured so much cash into it from the start..

R.I.P to Ferrit and FlyingPig.

Comment by hellonearthisman, on 12-Jan-2009 21:58

Who really want's to go online and pay retail?

Comment by Dratsab, on 12-Jan-2009 22:20

I was never once attracted by the stupid adverts they ran and never used the place.  In fact, until Juha and Tony posted their blogs about it today, I had actually forgotten it even existed so would never have gone there anyway.

A miserable failure in terms of developing and establishing a brand -  amongst other miserable failure-ish things...

Comment by Henrik, on 12-Jan-2009 23:07

The analysis is spot on. The lessons to learn from this debacle is really that you first need to listen to your users (something Ferrit only partly did) and second that it's very difficult to jump-start a web project regardless of investment without an attractive website and business model.

Comment by johnr, on 13-Jan-2009 08:11

I wonder if the porn site wants to purchase domain back.

Comment by literarysoldier, on 13-Jan-2009 12:32

I was left wondering how Telecom expected the site to draw customers and, you know, make money. Apparently the people running the show were still wondering the same thing.

Ferrit General Manager Ralph Brayham is using the currently trendy “Global Financial Crisis” excusology, claiming that the success of the site was dependent on a constant stream of new retailers signing up to expand the product range, and the current financial climate was scaring potential retailers off. A more cynical observer might say that their business model was fundamentally flawed, and that someone has finally realised this and pulled the plug.

Whatever Telecom’s motivations were, soon Ferrit will be just a ghost on the servers of the interwebs, but there’s one thing we can all be glad about; we don’t have to put up with those god-awful TV ads any more.

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