Cross-border e-commerce expected to grow
The international courier company, DHL has projected a significant growth in business opportunities in cross-border online trading for retailers and manufacturing companies.
DHL new research which investigated markets and products that offer growth potential in international online trading and opportunities for online retailers who wish to sell overseas, found that due to a growing class of cross-border shoppers, market for cross-border e-commerce commodities could increase twice the rate of domestic e-commerce market by 2020.
The research has noted that the market for cross-border online commodities is expected to grow by about 25% annually until 2020 and the growth momentum creates opportunities for retailers and manufacturers. According to figures from the research the market is projected to grow from the USD 300 billion recorded in 2015 to USD 900 billion in 2020. “The growth rate is nearly twice the growth rate of domestic e-commerce and is a growth rate that most traditional retail markets would dream of achieving. This growth momentum yields unrivaled opportunity for retailers and manufacturers,” states the research.
The research has found that there is a growing class of international shoppers, who are motivated to shop cross-border for fundamental reasons such as product availability and attractive prices. It also stated that fashion and electronics are long-known cross-border top sellers, but consumers now crave for more while great opportunity lies in product categories such as beauty and cosmetics, pet care, food and beverage and sporting goods.
The research has added that all commodities can be traded in cross-border commerce: “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 international customers. The opportunity to ‘go global’ and ‘go premium’ is available to retailers in all markets.”
Commenting on the research, DHL Express Sub Saharan Africa CEO Hennie Heymans added that all types of manufacturing and retail companies in Sub Saharan Africa can take advantage of the expected opportunities in cross-border online trading. “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 market.”
The CEO added that cross-border e-commerce is not an e-commerce giant story as small and medium manufacturing companies and retailers selling various goods can successfully go global. “It is not a story only for e-commerce giants – opportunity extends to all types and sizes of retailers and manufacturers. E-commerce giants set the standards for consumer experience but manufacturers stand to be big winners of growing cross-border e-commerce since they can boost margins and control their brand by ‘cutting out the middlemen’. For retailers, this implies the need to find a distinct value proposition in order to compete with them and/or secure their place within the value chain,” said the CEO.
He stated that 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,” said Heymans.
The research report has recommended that in order to overcome cross-border challenges such as consumers’ reservations related to logistics and trust, companies should partner with strong courier companies that offer time-definite premium shipping.