Identifying new growth opportunities is the key to ensuring that your online business generates returns more effectively than your competitors. eCommerce is a fast-expanding market in South Africa – there are more online shoppers in South Africa today than ten years ago, and as more eCommerce stores rose to the opportunity, customers also became choosier about where they shop. With new markets expanding and the spread of globalisation, more South African shoppers opt to abandon local purchases in favour of more attractive overseas marketplaces.
In South Africa, 43% of online shoppers indicated in a recent survey that they purchased from overseas eCommerce websites. Online shopping has amounted to R8.8 billion in revenue for international websites over the past twelve months, indicating a stimulated consumer landscape in South Africa.
But, online shopping doesn't just happen spontaneously. Customers have requirements and reflective tendencies that influence their purchase decisions. As such, the main incentives for customers to shop outside their country, the survey revealed, are free shipping (60% of respondents), availability of local currency for payment (58%) and secure payment methods (56%).
Cross-border eCommerce does have challenges and obstacles, which makes the chances of an uncompleted transaction on an overseas website just as good as local shopping cart abandonment. In the study, 72% of customers said that they stopped a purchase. High shipping costs, uncertainty about taxes, custom fees and lengthy delivery times are the main reasons they don't make it past checkout.
Previous research also indicated that the number of cross-border purchases on South African eCommerce websites is on the rise, especially from Nigerian shoppers. Thirty percent of Nigerian cross-border shoppers have spent their cash via South African e-tailers in the past 12 months.
This survey data highlights the opportunities that South African online businesses need to capitalise on in order to effectively fulfill the eCommerce standards of local consumers. Whether they want to expand to international markets or tap into the local cross-border segment, businesses can put several measures in place that cater to the demands of shoppers and give them a stellar shopping experience.
For example, knowing which trending products and services customers are most likely to splash out on, will allow you enhance your product offerings so that shoppers won't have to turn to overseas stores to get these products. The study found that digital goods, event tickets, travel or transportation, fashion, electronics, and physical entertainment were the most popular categories among shoppers. While these are everyday purchases, eCommerce businesses can take a unique selling proposition through value adds. These can include more features, options, lower prices, added bonuses, faster delivery, and better quality than their overseas counterparts.
Furthermore, when targeting new markets, businesses should consider foreign currency concerns as these greatly impact purchase decisions. The majority of online shoppers prefer to pay for cross-border transactions in their local currency and, as such, online retailers need to look at displaying prices in that currency and install a payment gateway that accepts the money that the country uses. Addressing your customer's payment needs goes a long way toward building brand credibility and establishing trust with customers.
Cross-border eCommerce offers promising prospects for online businesses looking to invest in new sources of business growth. If you're considering opening up your store for business in international markets, it's worthwhile delving into consumer insights first to understand your target market's shopping behaviour and payment preferences.