Owners of businesses in Africa, including Nigeria, have been advised to embrace cross-border e-commerce because it provides 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 percent between 2015 and 2020 (from $300 billion to $900 billion) – twice the pace of domestic e-commerce growth.
Vice President of Sales for DHL Express Sub-Saharan Africa, Mr Steve Burd, says that this highlights a boundless opportunity for African businesses looking to take a piece of the cross border e-commerce pie.
Mr Burd said 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,” the DHL chief said.
He highlighted five common areas which domestic e-commerce customers consider to be a challenge when deciding where to trade internationally.
According to him, the first is the cost of express shipping, which he explained that there is no risk at offering customers an express delivery option. “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.”
For the second point, he said it gives good 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.”
Also, he said the process gives basket values, noting that, “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.”
For the fourth point, Mr Burd said evidence shows that international customers will spend significantly more than local ones. “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.”
For the last point, which he called unfamiliarity with customs procedures and processes, Mr Burd explained that, “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’ 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 Mr Burd.
Adedapo Adesanya