Bulls n Bears Entrepreneurship Zone :: Cross-border e-commerce a significant growth opportunity for African companies

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Cross border e-commerce continues to provide significant growth
opportunities for retailers and manufacturers with an international online
product offering. According to a 2017 DHL report, cross-border retail
volumes are predicted to increase at an annual average rate of 25% between
2015 and 2020 (from US$300bn to $900bn) – twice the pace of domestic
e-commerce growth.

Steve Burd, vice president of sales for DHL Express Sub-Saharan Africa,
says that this highlights a boundless opportunity for African businesses
looking to take a piece of the cross border e-commerce pie.

Burd says that as the market leader in express logistics, DHL Express works
with thousands of e-commerce customers around the world, with a lot of them
at start-up phase. “We are therefore well aware of the perceived hurdles
involved when considering to trade across borders.”

He points to five common areas which domestic e-commerce customers consider
to be a challenge when deciding where to trade internationally.


1. The cost of express shipping


There is no risk at offering your customers an express delivery option,
says Burd. “Customers want choice, not only in their product selection, but
also when and how they receive it. In our experience, customers are willing
to pay a fair price for a faster, more efficient service.”


2. Returns rates


“We’ve found that the return rates are actually much lower on international
shipping. Businesses could always do it on a trial basis and measure the
benefits over losses and adjust their strategies accordingly.”


3. Basket values


“We have found that basket values often increase with the introduction of
express shipping. Customers tend to buy more to justify the premium shipping
costs.”


4. The customer’s business is doing well locally


Evidence shows that international customers will spend significantly more
than local ones, says Burd. “So even if international traffic to your
website is small, it can be worth a lot for limited effort. There are free
online tools available which will give you an indication of your
international traffic on your website – this will provide an idea of which
countries to focus your efforts on. There is no risk in opening doors to the
international market – only the risk of getting left behind.”


5. Unfamiliarity with customs procedures and processes


“This is where your choice of delivery partner comes in. If your paperwork
has been done correctly, there shouldn’t be any customs delays or worries.
Collaborating with an experienced partner that has extensive knowledge and
know-how of customs procedures on the African continent will assist the
business’s e-commerce offering to evolve.”

To further connect and support the e-commerce industry in Africa, DHL
Express recently signed on as title sponsor for the 2018 DHL eCommerce
MoneyAfrica Conference & Exhibition (Confex), taking place on 14 and 15 of
March this year.

“The DHL eCommerce MoneyAfrica Confex has established itself as one of
Africa’s biggest opportunities to bring stakeholders in the fintech and
e-commerce sectors together. This year’s event features presentations and
knowledge sharing from an array of African and international thought
leaders, geared at enabling participants to formulate innovative strategies
to unlock more opportunities on the continent,” concludes Burd.—
Howwemadeitinafrica 

 

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