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Opportunity for smaller exporters amid global ecommerce trend

29th June 2018

By: Schalk Burger

Creamer Media Senior Deputy Editor

     

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The growth of ecommerce and changing retail industry trends provide entrepreneurs and small businesses with new opportunities to sell their products and services to international markets, says courier multinational FedEx Express Southern Africa operations VP Mike Higley.

According to the PayPal and Ipsos third annual cross-border commerce report, South Africa’s online spend is forecast to grow to over R53-billion by 2018. In 2016, 43% of adults in South Africa shopped cross-border.

Businesses that manage to combine innovative products and services with a seamless online experience and high-quality customer care will be the ones who attract and retain their online customers, he says.

“It is essential that ecommerce business owners address the entire value chain of the online shopping process to make sure that they cater to their customers’ needs and deliver on their expectations,” Higley notes.

With economies becoming more interconnected, companies large and small are now able to access markets that were previously unattainable.

Market research firm Forrester Consulting’s Seizing the Cross-Border Opportunity study, commissioned on behalf of FedEx, surveyed online merchants and thousands of online consumers across 17 countries and markets to understand their concerns, priorities and what smart small, medium-sized and microenterprises (SMMEs) are doing to remain competitive.

“Many of the merchants Forrester Consulting surveyed initiated global exporting without a solid strategy. “The companies only became global companies after international customers came to them through search engines or online adverts and placed orders.”

It is important that a business knows and understands who is buying its products to cater to the consumers’ need, he says.

Broadly speaking, online shopping behaviours are similar all over the world, but paying attention to those regional nuances can help a business understand its customers better.

“With high rates of mobile penetration in South Africa, online shoppers are its increasingly opting to make purchases on their mobile devices – resulting in an estimated 65% growth in online spend via mobile device between 2015 and 2016, to reach an estimated R9.5-billion, with momentum expected to continue. This provides an immense opportunity for online retailers, as mobile spend is projected to increase by 123% by 2018.”

In the last 12 months, 43% of cross-border shoppers stated that they shopped cross-border via smartphone, while 21% stated they used a tablet for their cross-border purchases, he illustrates.

Further, cost is also a concern to the global ecommerce customer. Cheaper prices and lower duties or taxes are two of the main reasons given for seeking items across borders.

However, availability of the products was rated as influential or very influential by 75% of respondents.

“More consumers are using their computers and smartphones to find goods that are unavailable where they live. For instance, 68% of respondents in Europe, the Middle East and Africa considered uniqueness to be influential or very influential,” says Higley.

A significant hurdle for SMMEs is that most cross-border shoppers prefer multibrand retailers or marketplaces. In a survey asking consumers to rank preferred online shopping destinations for foreign goods, small or medium-size independent retailers were rated fourth out of five.

To leverage the multibrand marketplaces for their businesses, SMMEs should consider selling their goods through a popular selling platform.

“A home-grown venture can build off another company’s global reach, language, localisation and country-focused marketing. Skittish shoppers get buyer protection and on-site customer reviews provide an unbiased demonstration of just how good your goods are,” notes Higley.

Further, logistics are key for many cross-border consumers. Key deciding factors for choosing an online store included delivery times, package tracking and simple return or exchange processes. For international shipping, delivery features that boost transparency and eliminate guesswork also go a long way to levelling the playing field.

“Many of the successful merchants from the study worked closely with at least one major global logistics provider that provided guidance and assistance. This approach allowed businesses to easily offer those all-important add-ons like guaranteed delivery. However, the top merchants made life easier for business owners, offering services like calculating taxes and duties, paperwork support and streamlining cross-border returns.”

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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