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 US$ 300 to 900 billion. That’s at twice the pace of domestic growth in e-commerce.
Steve Burd, vice president of sales for DHL Express Sub-Saharan Africa, says that this highlights boundless opportunities for African businesses looking to take a piece of the cross-border e-commerce pie.
Burd points to five common areas that he believes domestic e-commerce customers consider a challenge when deciding where to trade internationally, and he suggests some solutions:
1. The cost of express shipping
There is no risk in offering customers an express delivery option. Customers want choice, not only in their product selection, but also when and how they receive products. Customers are usually willing to pay a fair price for a faster, more-efficient service.
2. Return rates
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
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. Even if international traffic to a company’s website is small, it can be worth a lot for a limited effort. There are free online tools available that will indicate international traffic on a website – this will provide an idea of the countries on which to focus. 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 the choice of delivery partner comes in. If the 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.