Or so they say. Of course there are a few niches in the New Zealand market that will be worth pursuing if you want a high growth, scalable business. But niche is a relative term. One with 1,000 high worth individuals in New Zealand might well contain 100,000 in North America. The numbers and percentages might well be amplified for luxury products. According to CNN Money there are 8.3 million high net worth individuals worldwide (at 2005). Their wealth totaled $30.8 trillion ...
High net worth is defined in the report as having financial assets of at least $1 million, excluding home real estate. Mid-tier millionaires are defined as having $5 million to $30 million in assets.
I saw an example on the web today that reinforces the point: personalised name badges for your Porsche. Great idea, niche product … tiny market, right? Go online, type in your desired word. Your name or maybe something a little racier, I’m sure your imagination is better than mine. The cost of a chrome badge with a reasonably short word? (It varies by word length and finish—grey, black, chrome, or gold—each progressively more expensive). I went for my name in chrome, 500 Euro or NZ$962. Sound steep? Hey, if you can afford a new Cayenne …
According to the Associated Press, Porsche sold nearly 97,000 vehicles in the year leading up to July 31, 2006. That was 8.9% up on the year before. So, assuming similar growth (not adjusted for any market variation) on the past five years that means Porsche moved over 406,000 new vehicles in the past five years alone.
So, putting aside the used fleet, if just 2% of new Porsche owners were to order a personal name badge the business would turn over nearly NZ$8 million. It is a pure Internet play, the buyer covers shipping prices and I am sure the cost of goods is negligible, so margins would be substantial. It’s probably being run from a bedroom somewhere.
Of course my calculations are guesswork, but you get the point. Niches served by on-trend ideas and served with low cost technology and smart marketing is perfect for New Zealand entrepreneurs. Your niche might well be here, but why muck about?
The ideas don’t have to be sensible—you have to ask how sensible a Porsche Cayenne is in itself—but it scratches a niche.
What do you think?