By Nick Gelling
Product Test Journalist | Kaipūrongo Whakamātautau Hautaonga
Parallel importers buy genuine branded products overseas, ship them into New Zealand and sell them to local consumers without permission from the manufacturer. It’s completely legal and very widespread.
Parallel importing meets a demand
Some international brands aren’t interested in selling to a small country like ours. Setting up in a new country means dealing with local regulations, honouring warranties and keeping a stock of spare parts for repairs. If the brand doesn’t sell enough products, it isn’t worth that investment.
But customers might still want those products. As a result, plenty of goods are brought into New Zealand through unofficial channels every day, including by major chains like The Warehouse.
Even products that are officially distributed in New Zealand are sometimes sold by parallel importers as well. And often, because importers can source the product cheaper overseas, they can afford to undercut the official New Zealand store.
Common products parallel imported into New Zealand include:
Consumer NZ tests some parallel imports
Every time we test a product, we scour the web to find out where it’s available, and for what price.
We think it’s important to recognise that more people are buying online than ever before. So, where we used to only test models that were available at major stores, we now also look at smaller online shops – including some parallel importers.
We tend to avoid publishing information about a product if that product is only available from one parallel importer, but we take notice if a few stores are independently bringing it in.
A clear example is the Google Pixel smartphone range. Pixel is a well-known brand overseas with a small but passionate group of users in New Zealand. It regularly appears in our mobile phone test despite not being officially available here.
Parallel importing lowers prices for everyone
There are clear benefits to parallel importing. For one, it opens the market to a wider range of products. Also, parallel importers can often afford to charge less because they import from countries with economies of scale or stronger local competition, and they usually don’t have to maintain physical stores. But are these cheaper offerings undermining the businesses that deliver proper after-sale service?
PB Tech is a retailer on both sides of the equation – it’s an official distributor for some major brands and parallel imports other products.
PB Tech product manager Joe Shi says parallel importers put price pressure on official sellers.
“New Zealand customers actually pay more than lots of other countries for the same products through official dealers. That really encourages parallel importers.
“The only way official brands can stop parallel importers is by reducing their retail prices,” says Joe. “If a parallel importer can only make a small margin … they’ll lose interest.”
Lower prices sound like a win for consumers; so, what’s not to love about parallel importing?
Your legal rights with a parallel import
You have consumer rights for anything you buy in New Zealand. The Consumer Guarantees Act (CGA) and Fair Trading Act (FTA) set the legal agreements between you and the retailer. By law, the onus is on the retailer to sell you suitable products. If a product is not of acceptable quality or doesn’t do what it should, the retailer needs to make it right. That might mean repairing or replacing the item or giving you a refund.
However, in practice, parallel importers can be difficult to nail down, especially if the product is faulty. They might say they cannot source spare parts to make a repair or tell you to contact the manufacturer yourself for help. Or, if they are an online store, they might simply ignore your emails or calls.
Ordinarily, if a retailer proved elusive, you’d complain to the manufacturer – but with parallel imported goods, any CGA obligations on the manufacturer are transferred to the importer (which, in this case, is usually the retailer). After-sales support provided by the manufacturer, such as call centres, might be inaccessible from New Zealand, and the importer becomes responsible for honouring any warranties.
You can always take a retailer to the Disputes Tribunal if it is failing to work with you to reach a solution. However, if the retailer is based overseas with no real presence in New Zealand, it can be a challenge to enforce a tribunal decision in your favour.
It all adds up to an environment of risk. You need to consider how much time and effort you’re willing to spend enforcing your rights if something goes wrong with a cheap product you buy through a parallel importer.
How to tell if something is parallel imported
Retailers don’t have to disclose that a product for sale is parallel imported, but some do. For example, online store Mighty Ape uses several labels including ‘parallel import product’ and ‘international product’.
In general, there are some telltale signs.
The product’s non-sale price is lower than the non-sale price at other stores.
The product isn’t available anywhere else, and the retailer doesn’t claim to be a dealer or authorised seller.
The delivery time is longer than expected (because the store has to import new stock).
It’s important to distinguish parallel importing from international online shopping. Some brands have no official dealers in New Zealand but will still ship here from their global online shop.
Because you’re buying directly from the brand, you’d expect better support if you needed to return or exchange something. But enforcing your rights against an overseas company can be difficult. In some cases, it can be easier to challenge a New Zealand-based parallel importer.
Be careful buying a parallel imported phone
Phones are one of the most common parallel import products. They’re also an exceptionally high-risk purchase because of how cellular networks vary between countries.
2degrees head of communications Quentin Reade wants consumers to be aware that not all parallel imported phones will connect and receive signal in New Zealand.
“Many will work on 2degrees with no issue. However, we do not test functionality of parallel imported phones and cannot guarantee they will work here,” he cautions. “Also, some devices for sale internationally have not been certified to use on New Zealand mobile networks, so we can’t guarantee users will be able to make calls (including emergency calls).”
Paul Brislen, chief executive of industry body Telecommunications Forum, says there are thousands of different devices on New Zealand networks, some of which aren’t entirely set up for the New Zealand environment.
“They may have the wrong frequency ranges built in, for example. A number of devices don’t offer 4G calling on New Zealand’s frequencies.”
You should only buy a parallel imported phone if you’re confident that particular model will work on your mobile provider’s network.
Looking for a new phone?
Find the best mobile phone for you with our buying guide and test results for 73 current and 114 discontinued models.
More parallel imports to avoid
Electrical products from some regions, like Japan or North America, operate on much lower voltages than our 230V mains supply.
These are major fire and shock hazards when connected to a New Zealand power source and should always be avoided.
Selling any electrical product without a New Zealand plug is technically illegal, too. However, parallel importers might bend the law by including a New Zealand adapter in the box.
This should be safe if the adapter is of high quality. If you have any doubts, replace it with another adapter from a store you trust (look for an ‘inbound travel adapter’).
Phone chargers and other plug-in device chargers shouldn’t be bought from parallel importers. Cheap overseas chargers are often counterfeit or poorly designed, risking electrical shock or fire.
Appliances are high-risk products. If they go wrong, they go very wrong, so take extra care. New appliances sold through official channels tend to provide decent warranty protection, and buying local makes it easier to enforce your rights.
Take your time and do your research
Our experts urge shoppers to think twice before buying anything on parallel import and try to stick to trusted stores.
Joe Shi from PB Tech says consumers need to understand the risks when they purchase a parallel imported product – and not just look at the price.
“You need to find a good dealer. You need to think, if this $1,000 phone doesn’t work, will the seller help you?”
