Are you ready for the “Asian invasion”?

By Steve Bohling February 03, 2014 Industry News

Asian house builders and developers are a growing proportion of the trade market for many merchants, especially around Auckland. So what is the shape and scale of this “Asian invasion”? Steve Bohling reports.

To view a PDF of the complete feature as it appeared in NZ Hardware Journal magazine, click the download this story button at the bottom of this page.

According to the 2013 Census figures, 131,789 people moved to Auckland from overseas in the last five years, which is one of the reasons why Auckland is New Zealand’s fastest growing region, increasing by 8.5% since 2006 to 1.4 million people.

The Census notes that this scale of change is akin to “adding a city about the size of Tauranga to the region” and certainly anyone in and around the city of sales will be well aware of its growing pains, not to mention the odd stretch mark – particularly when it comes to housing availability and prices.

Now not only is our resident population growing but its mix is also changing. Nationally, one in four people in New Zealand is now overseas-born and the percentage of Asian-born people living in New Zealand has also been increasing, rising to almost 32% in 2013, making Asia (as opposed to just China) now the most common region of birth for overseas-born Kiwis.

Nationally, Asian ethnic groups in New Zealand have almost doubled in size since 2001. Indeed, the percentage of the Kiwi population who identified themselves as “Asian” in the last three Censuses was:

  • 2001 – 6.6%.
  • 2006 – 9.2%.
  • 2013 – 11.8% (471,711 people).

What is the outlook for the future? The Asia New Zealand Foundation’s paper New Zealanders’perceptions of Asia and Asian peoples: 1997‑2011 from October 2013 says New Zealand’s Asian population is expected to grow by 3.4% a year, to about 780,000 by 2026 and that Asians will make up around 16% of the New Zealand population by 2021.

Moreover, the report confirms what many in the trade up here are already conscious of, that this trend is expected to be “even more pronounced in Auckland”. In 2006, the Asian population of Auckland was 19% (5.5% in 1991) but that is forecast to increase to around 30% by 2021.

Where am I going with this? In a nutshell, that the current state of affairs, issues and opportunities around the hardware channel’s dealings with the already substantial and growing “Asian” builder/developer market (comprising largely Chinese but also Indian and Korean individuals and companies) will do nothing if not increase in scale in the coming years.

After all, here in Auckland, there is already substantial pent up demand for affordable housing and there is a skills shortage… So what is the current state of affairs from the hardware channel’s perspective?



Now although this picture will not be news to all of our readers (and a couple of merchants have been serving this market for the best part of a decade now), it’s noteworthy nonetheless that there is increasing interest around the channel right now in recruiting especially Cantonese and Mandarin speaking employees.

Indeed, Eddie Rizarri, a Senior Consultant at recruitment specialist and regular NZ Hardware Journal contributors Build People, confirms that interest in Asian candidates started becoming significant for the company almost three years ago. Still, he adds: “Recently there has been a surge of interest. It is still a niche market here in NZ but it is a growing market – and that growth is exponential.

“In my discussions around the market there is interest to tap into this niche market and that’s coming from not just merchants but also now from manufacturers.” So, although several merchants have already been exploring how to address this market for some time (as we will find later on), suppliers are also now cottoning on to the rewards that flow from fulfilling a clear and present need to support their products in the marketplace. Of course some will also be looking to sell direct…

But the right candidates for these roles are not exactly plentiful right now. Eddie Rizarri continues: “The challenge we have is finding the talent – not just Chinese speaking but someone who has an understanding of our construction process here and who has developed themselves a network.”

And, when you add into the equation the need for fluent English skills, there are only a handful of people out there who fit the bill. Still, more than one supplier put it something like this: “I will be looking for the best person for the role, irrespective of the language.”



As a generalisation, the perception around the hardware channel is that the majority of the large and growing number of Asian construction businesses in New Zealand are small, low to no overhead enterprises. They tend to be family centric and depend on personal relationships – and personal credit. Other perceptions are that Asian builders and developers are:

  • Price focused.
  • Highly competitive.
  • Want to work with Asian builders.

None of which is a bad thing, just different. Many of these developers and builders are unbranded individuals (not companies) and are deriving good income from selling 15-25 good quality houses a year or less.

According to one merchant, some if not the majority will “happily go and buy an entire street of sections in a subdivision and progressively work their way down the street. Not so long ago, each Asian customer would only do 3-4 houses in a year.”

Merchants talk ruefully about their Asian customers’ “skinny” margins and their determination to price check every product as part of achieving the lowest possible price for materials – which may be a bit of a culture shock if you’re used to dealing with Kiwi builders…

There is also widespread talk of Asian builders’ lack of brand loyalty and that talking service levels up and offering value adds doesn’t always make a difference. Having said that, more than one merchant I talked to offered a different outlook on this (see below). They are “transient and highly mobile, it’s difficult to tick all the boxes,” says a supplier.

Much or all of the above is one reason why Asian to Asian (henceforth “A2A”) distributors – small building supply companies owned by Chinese people who deal 100% with other Chinese businesses – have been springing up over the last 4+ years.

“The word is that the quality of houses being built by Asian builder/
developers is increasing all the time. Still, word does get around the community right smartly if your pencil isn’t at its sharpest for some reason”

At least one local supplier warns against the odd instance of these A2A merchants unexpectedly turning the odd product into a loss leader! Another says this sort of thing is just a fact of life: “People say they can’t compete [when it comes to pricing] but maybe that’s someone who’s not busy and needs someone to blame…”

The word is that the quality of houses being built by the Asian builder/developers is increasing all the time. Still, word does get around the community right smartly if your pencil isn’t at its sharpest for some reason. Another big difference from the average Kiwi builder is some Asian builders’ reluctance to sign up with a single merchant for whole house project contracts.

Then there’s the sometimes ultra-rapid pace of execution on-site: “If you’re not on top of it and understand where they’re up to it can be quite difficult,” says one merchant, having raced to supply prenail to a two-storey townhouse erected over a single weekend!

Even having ticked all the boxes on one job, you cannot take it for granted that the next sale is actually going to occur, says one merchant. “The biggest frustration for us is the fact that they are not brand loyal; the loyalty offer we make to them as [brand removed] does not push their buttons at all, it’s all about lowest cost.”

Yet another opinion has it that the lowest-price-at-all-costs outlook is changing, thanks to the increasing onus of the last few years on compliance in the building industry.

That’s all as may be but if there’s one positive aspect that nearly all of the merchants I talked to for this article agreed upon it’s that in general, Asian builders and builder-developers are cash rich, and as a result low-risk (again unlike some Kiwi builders…).



We weren’t able to get in touch with the 2-3 merchants which have been working in this market for the longest, but what are some of the other hardware retailers and merchants making of all this?

Patrick Britton, General Manager at Mitre 10 MEGA Glenfield, believes there are “pockets throughout Auckland and indeed elsewhere in the country where people in hardware and builders’ supplies are recognising the need to service the Asian market.”

But right now this Mitre 10 MEGA at least is more interested in developing its trade operations and “simply being part of the larger community” than having any particular focus on this niche market.

Still, he says: “We will be looking for Asian speakers, as well as ensuring there is also one in the drive-through, not just for Asian builders but the community as a whole.”

Chris Fairbairn, Branch Operator of PlaceMakers Mount Wellington, confirms: “It’s a strongly growing and important segment – not just the Asian but the ethnic builder, Indians, Koreans, Chinese.”

And is making something of this Asian home building segment just about overcoming language barriers? Not at all: “From our point of view I think it’s pretty easy but equally foolish to think that you can just hire a sales rep who can speak the language and all the riches will come flowing, because they operate in a different way.”

Chris Fairbairn has been working on the Asian builder/developer segment for the last 3-4 years. “It’s not as if this market has just suddenly popped up,” he reminds me. “We have been dealing with this market for a substantial period of time and expect it to continue to grow at the same if not greater rate.”

To add value for its Asian customers, the branch has worked hard at becoming LBP advocates to educate the community around industry requirements. “We see education as a vital part of getting alongside these guys.” Some of this is about “demystifying nuances” around legislation and codes but it’s also about removing some of the language barriers.

What about the perception of “price is king”? “Like any builder out there, price is important. But, at the end of the day, it’s the intangibles – it is about education, it is about adding value and simplifying processes.”

“The LBP process came in at a great time,” adds Fairbairn. “It really helped to establish some standards that needed to be met.”

Which also addresses the brand disloyalty and price fixation issues I have been hearing about elsewhere. And, as a result, he says: “We’re seeing a strong move back to the recognised NZ or PlaceMakers provided product. Due to standards compliance, simplicity of ordering, after sales service and guarantees – for all of those reasons – we are seeing a noticeable move back to locally sourced goods.

“There will always be an element of imported product where there is an opportunity to save money. But I think the reality is, once your business grows, the real money isn’t in the procurement it’s in providing a good quality product.”

Chris Fairbairn adds that this changing outlook is being reflected in the marketplace: “I think earlier there was a perception that some of the quality of the buildings that were being completed weren’t as highly specced as a typical NZ built property but certainly now that is not the case and that is due in the main to the builders adopting NZ sourced and typical hardware products.”



Martin Day, Director at Dayle ITM in Avondale, was one of the few to admit that the Asian market is “Quite a sizable part” of his business” and that it’s actually a “big part of the new house market” – maybe as much as 30-40% of the Auckland market can be split between the Asian and Indian builders and developers, he says.

Admitting “It’s a market that we Kiwis probably don’t understand well enough”, Martin Day says merchants seeking to do well with this market would be well advised to get their ducks in a row when it comes to developing relationships with the most active architects and draughtsmen and should be prepared to deal direct with the odd Asian homeowner (which means some accounts are only for one job).

As mentioned earlier, Asian builder/developers are relatively cash rich, which makes Dayle ITM positive about risk levels: “As long as the deal you did at the beginning is honoured, then [it’s OK]… We may have a few discrepancies around the odd account but we have never had a bad debt in the five or so years we have been working with this group.”

Like Chris Fairbairn above, Martin Day has put stock in providing these customers with advice, information, education and support around legislative changes and developments: “We have done quite a lot of work on that to be fair. They are aware that they need to keep up to date. And some of the communications are maybe a little bit too technical, so we have done a lot of face to face stuff, talking them through it and making sure that they are up to date.”

At the end of all this is there is one truth it’s that the Asian builder/developer market remains a growth market and that, while it is changing and adapting to work within the local framework, it may continue to stand apart from the mainstream at the same time as adding to the New Zealand building industry for many years to come.

In the next issue we will do some more digging into this market and we’ll be looking to secure some opinion from both Asian to Asian distributors and builder-developers. It will be interesting to get straight whether local perceptions and opinions match the reality. 




  • This market segment will continue to grow, strongly if the forecasts hold true.
  • It’s not all about overcoming language barriers but experienced, Asian speaking staff are at a premium.
  • Merchants and suppliers targeting this segment will need to be highly proactive, flexible and prepared to match the rapid pace of construction.
  • They will also often need to provide product/legislative education or support to these customers.
  • And they will be sanguine about all this not guaranteeing the customer will be back with the next project.
  • For players with a retail arm, investment in learning to work with this trade segment will make dealing with Asian consumers a lot easier.

share this