NEWSROOM

How to successfully enter the American market

13 September 2021

The American Chamber of Commerce in New Zealand has announced the finalists for the 2021 AmCham-DHL Express Success and Innovation Awards, celebrating success and innovation for companies doing business with the United States of America (USA). Three of this year’s finalists feature alumni from the Velocity entrepreneurship programme, delivered by the University of Auckland Business School’s Centre for Innovation and Entrepreneurship. Their businesses have successfully cracked the American market through developing innovative products, understanding the market and developing and executing intelligent marketing plans.

The three Velocity alumni companies shortlisted for the awards include retail crime and loss prevention platform Auror and orchard management software platform Hectre in the under $1 million export category, and EdTech company Kami in the over $10 million export category. Mike Hearn, Executive Director of the American Chamber of Commerce in New Zealand Inc. says “Over the last year Kami has grown to over 27 million users with 85% of their revenues being generated in the USA. Tech is a sector that continues to expand year on year.  In the last four to six months, we have seen over $3 billion of new USA investment in NZ companies, mainly in the tech sector, including into Seequent, Timely, Unimarket, Education Perfect and Rocos.”

Mike says that despite the challenges that Covid has presented including disruptions to business travel and shipping, New Zealand businesses have continued to make progress in the American market. “Over the last 12 months, New Zealand’s exports of goods to the USA have grown by over 10% to $6.5 billion. While food and beverages make up 46.6% of these exports, manufacturing exporters have continued to grow during the COVID-19 pandemic. Companies like Buckley Systems, Fisher & Paykel Healthcare, Douglas Pharmaceuticals and Howick Ltd. Other tech companies doing well in the USA are Endace, ERoad, Orion Health, RedShield Security and Xero”

“One of the more niche areas that we are seeing companies entering the US market is in skincare, nutraceuticals, and associated products, many of whom are leveraging Amazon’s online platform or have been successful in working with major retailers like Walmart. Companies include HoneyLab, Ethique, Organic Initiative and Eagle Protect.”  

Entering the American market is something that many entrepreneurs can find overwhelming. Mike says that the rewards are large and the barriers to participation are reducing. “The US has a population of over 331 million with a GDP per capita of $63,534 so is a good market for New Zealand consumer products. On top of this, we are seeing more New Zealand tech companies investing and setting up businesses in the USA. The KIWI Act that was introduced in 2019 allows New Zealanders wanting to invest and establish businesses in the USA to apply for E Visas. Since then there have been over 140 visas issued with new investment in the USA totalling US $29 million.”  

The 2021 AmCham-DHL Express Success and Innovation Awards have been postponed until 1 December, due to Covid disruption. 

Advice for entrepreneurs wanting to do business in America:       

• Take your time to research and understand the market.
• Entering the market can take much longer and cost at least three times more than you would expect. Salary expectations can be much higher than in New Zealand.  
• The US is 50 different “countries” as each state has their own rules, regulations, procedures, and taxes. On the other side, each state offers different incentives to attract businesses to invest and set up offices, so businesses need to do their research.    
• Get expert advice to help you set up your business entity. The US is a very litigious country so hire a lawyer to assist with this and with any visas and immigration requirements. If entering the US on an ESTA, never overstay past the 90 days.
• Network with other New Zealand businesses already there. Work with government agencies that are in the market and use networks like KEA and AmCham.