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Cross-Border e-Commerce to Grow Sub Saharan Africa Retailers

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Cross-Border e-Commerce to Grow Sub Saharan Africa Retailers

Cross-Border e-Commerce to Grow Sub Saharan Africa Retailers

By Modupe Gbadeyanka

DHL Express, the world’s leading international express services provider, has published research highlighting the significant growth opportunity for retailers and manufacturers with an international online product offering.

The report – The 21st Century Spice Trade: A Guide to the Cross-Border E-Commerce Opportunity – looks in detail at the markets and products that offer the highest growth potential, the motivations and preferences of customers making international online purchases and the success factors for online retailers that wish to expand overseas.

It focuses in particular on the opportunity for premium products and service offerings, with higher basket values accounting for a significantly higher proportion of orders in cross-border transactions.

The report reveals that cross-border e-commerce offers aggregate growth rates not available in most other retail markets: cross-border retail volumes are predicted to increase at an annual average rate of 25% between 2015 and 2020 (from $300 billion to $900 billion) – twice the pace of domestic e-commerce growth.

Online retailers are also boosting sales by 10-15% on average simply by extending their offering to international customers.

An additional boost comes from including a premium service offering: retailers and manufacturers that incorporated a faster shipping option into their online stores grew 1.6 times faster on average than other players.

“Contrary to what many retailers think, cross-border shipping is actually simple and retailers in Sub Saharan Africa are perfectly positioned to take advantage of international opportunities. ‘Brand Africa’ is something that has increased exponentially in popularity in recent years and it’s time for retailers to remove the boundaries and open up their business to seamless international trade. Often, retailers choose not to promote their businesses internationally, and worse yet, will turn down international sales interests due to the misconception that it’s too difficult to manage and deliver,” says Hennie Heymans, CEO for DHL Express Sub Saharan Africa.

“Globally, our experience is that virtually every product category has the potential to upgrade to become premium, both by developing higher quality luxury editions and by offering superior levels of service quality to meet the demands of less price-sensitive customers. The opportunity to ‘go global’ and ‘go premium’ is available to retailers in all markets and our global door-to-door time definite network is well-positioned to support retailers looking to develop a premium service offering or directly reach new international markets without  the need to  invest in distribution or warehousing. In Sub Saharan Africa, the opportunity for Intra Africa trade should not be ignored. ‘Going global’ does not only mean trading outside of the African continent, Africa is home to one of the world’s fastest growing middle class, with an appetite for quality products and services. There are also a number of trade blocs in place to support Intra Africa trade growth and retailers should take advantage of this captive market.”

The report is based primarily on research and in-depth interviews conducted by a leading global management consultancy, as well as more than 1,800 responses to a proprietary exporter survey of retailers and manufacturers in six countries. It casts a light on the evolving face of e-commerce, with both supply and demand becoming more sophisticated Manufacturers are increasingly taking advantage of e-commerce to move to direct retail models – bypassing the ‘middleman’ and offering their products online to the end customer – and expect to grow 30% faster in cross-border e-commerce than other retailer groups. Customers in many markets are also becoming more discerning, citing product availability and trust, as well as attractive offers, as the motivating factors for shopping with overseas online retailers.

The main challenges highlighted by consumers to cross-border purchases relate to logistics, trust, price and customer experience. At the same time, online retailers can take a number of relatively easy steps to identify, cultivate and service demand from abroad. The report noted that the e-commerce trend has given birth to a new eco-system of facilitators and off-the-shelf solutions (such as payment providers and programs that localize a website’s check-out experience for the visitor), helping retailers to adapt their offering to the digital world and to transact with customers in foreign markets. Global logistics partners can provide support in identifying the right trade-off between centralized and local warehousing and fulfillment, while fast, reliable and flexible delivery options can be an important tool in turning speculative interest into long-term customer loyalty.

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

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Economy

Again, FrieslandCampina Pulls Down OTC Bourse by 0.23%

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OTC stock exchange

By Adedapo Adesanya

FrieslandCampina Wamco Nigeria Plc, for the second consecutive session, dragged the NASD Over-the-Counter (OTC) Securities Exchange down by 0.23 per cent on Wednesday, October 5.

This happened as the milk-producing company recorded a N1.15 loss to close the midweek session at N73.85 per unit compared with the previous day’s rate of N75.00 per unit.

Consequently, the market capitalisation of the OTC bourse went down by N2.25 billion to wrap the day at N960.50 billion, in contrast to Tuesday’s N962.75 billion.

Equally, the NASD unlisted securities index (NSI) recorded a drop of 1.71 points to wrap the session at 729.63 points compared with the preceding day’s 731.34 points.

The number of shares transacted during the session went up by 40.5 per cent to 41,217 units from the 29,331 units transacted on Tuesday, while the value of the shares depreciated by 4.1 per cent to N2.1 million from N2.2 million, with the number of deals carried out by investors rising by 225 per cent to 13 deals from the four deals executed in the previous session.

AG Mortgage Bank Plc ended the trading session as the most traded stock by volume on a year-to-date basis with a turnover of 2.3 billion units valued at N1.2 billion, CSCS Plc stood in second place with 687.7 million units worth N14.3 billion, and Mixta Real Estate Plc was in third place with 178.1 million units valued at N313.4 million.

Also, the most traded stock by value on a year-to-date basis was still CSCS Plc with the sale of 687.7 million units for N14.3 billion, VFD Group Plc was in second place with 27.7 million units worth N7.4 billion, and FrieslandCampina WAMCO Nigeria Plc was in third place with 14.4 million units valued at N1.7 billion

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Economy

Equity Market Falls 0.09% as Investors Lose N25bn

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equity market size

By Dipo Olowookere

Trading activities remained in the bearish region on Wednesday on the floor of the Nigerian Exchange (NGX) Limited despite the upbeat about the listing of Geregu Power Plc on the exchange.

The local equity market depreciated by 0.09 per cent yesterday as a result of the persistent profit-taking triggered by inflationary pressures as investors leave the market for other assets that can give them returns closer to the 20.52 per cent inflation rate.

When the market closed for the session, the All-Share Index (ASI) decreased by 43.04 points to 48,836.70 points from 48,879.74 points as the market capitalisation dwindled by N25 billion to N26.354 trillion from N26.379 trillion.

The industrial goods space remained flat for another trading day, while the insurance counter closed higher by 0.21 per cent, with the banking, energy and consumer goods sector depreciating by 0.98 per cent, 0.27 per cent and 0.18 per cent, respectively.

Cadbury Nigeria recorded the highest fall as its value went down by 9.93 per cent to N12.25, Northern Nigerian Flour Mill declined by 9.33 per cent to N6.80, PZ Cussons fell by 9.19 per cent to N8.40, Cornerstone Insurance retreated by 8.93 per cent to 51 Kobo, and Unity Bank lost 6.82 per cent to trade at 41 Kobo.

The highest price gainer for the midweek session was the new boy, Geregu Power, as its share value rose by 10.00 per cent to N110.00. Multiverse gained 9.88 per cent to sell for N4.45, Red Star Express appreciated by 9.43 per cent to N2.32, Sovereign Trust Insurance chalked up 8.00 per cent to quote at 27 Kobo, and Japaul garnered 7.69 per cent to settle at 28 Kobo.

The most active stock for the day was Chams, which sold 25.5 million units worth N7.4 million and was trailed by GTCO, which sold 19.5 million units valued at N341.0 million. Sterling Bank transacted 9.9 million shares for N15.2 million, Geregu Power traded 8.5 million equities worth N935.0 million, and Transcorp exchanged 7.2 million stocks for N7.5 million.

At the close of business, the market recorded the sale of 135.5 million stocks worth N2.2 billion in 4,041 deals compared with the 173.5 million stocks worth N2.4 billion traded in 4,926 deals on Tuesday, representing a decline in the trading volume, value and number of deals by 21.87 per cent, 7.12 per cent and 17.97 per cent, respectively.

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Economy

Naira Appreciates to N733/$1 at Black Market, Weakens to N437.50/$1 at I&E

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Bitcoin Naira

By Adedapo Adesanya

The exchange rate of the Naira to the American Dollar at the black market closed at N733/$1 at the black market, data obtained by Business Post from foreign exchange (forex) traders on the streets showed.

On the previous day, the Naira was exchanged with the United States currency at N740/$1, indicating that the local currency appreciated within 24 hours against its American counterpart by N7.

Also, in the Peer-to-Peer (P2P) segment of the FX market, the Naira appreciated against the US Dollar yesterday by N2 to close at N747/$1 in contrast to the previous day’s value of N749/$1.

However, in the Investors and Exporters (I&E) window of the market, the Nigerian currency depreciated against the greenback in the midweek session by 47 Kobo or 0.06 per cent to settle at N437.50/$1 compared with Tuesday’s value of N437.03/$1 as forex traders executed transactions valued at $70.42 million during the session.

In the same vein, the domestic currency suffered losses against the Pound Sterling and the Euro in the interbank segment of the market on Wednesday.

On the Pound Sterling, the indigenous currency lost N21.64 to trade at N491.52/£1 versus the previous day’s N469.88/£1 and against the Euro, it lost N9.16 to close at N429.91/€1 compared with Tuesday’s rate of N420.75/€1, according to data from the Central Bank of Nigeria (CBN).

Meanwhile, in the digital currency market, bullishness continued in Bitcoin (BTC) as the coin added 1.3 per cent toits value to trade at $20,386.63, with Ripple (XRP) recording a 5.4 per cent gain to sell at $0.5016.

Ethereum (ETH) appreciated by 1.8 per cent to sell at $1,376.18, Dogecoin (DOGE) gained 1.5 per cent to trade $0.0659, Solana (SOL) recorded a 1.1 per cent rise to sell at $34.41, Cardano (ADA) recorded a 0.7 per cent climb to quote at $0.4354, as Binance Coin (BNB) also recorded a 0.7 per cent appreciation to trade at $296.48.

However, Binance USD (BUSD) recorded a 0.05 per cent depreciation to settle at $0.9999, Litecoin (LTC) declined by 0.02 per cent to $54.80, while the US Dollar Tether (USDT) closed flat at $1.00.

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