How SMEs can leverage cross-border e-commerce opportunities
The rise of cross-border e-commerce trade is unlocking new opportunities for South African businesses eager to expand their reach and revenue.
Cross-border e-commerce, also referred to as international e-commerce, involves the buying and selling of goods and services online across national borders, with buyers and sellers located in different countries.
It transcends geographical limitations, enabling businesses to reach global markets and consumers.
According to Capital One Shopping research, cross-border transactions already account for at least 31.2% of all global online sales, and it is projected to grow 219% faster than global e-commerce through 2028.
The market is expected to reach $5.06 trillion in sales within the next three years.
The research was released on January 28, 2025, stating that approximately 4% of African retail sales are made online. African e-commerce is expected to grow by 25% from 2023 to 2025, driven by the increased availability of smartphones.
Benefits of cross-border e-commerce
Gregory Saffy, Managing Director for Sub-Saharan Africa at FedEx, said that there remains a largely untapped opportunity for small and medium enterprises (SMEs).
'That is set to change with e-tailers bold enough to navigate the global landscape standing a chance to reap huge benefits in the years to come.'
However, he added that there are important practices that businesses need to consider when expanding outside their home territory.
'To boost global sales, SMEs must tailor their offering to local preferences. This includes researching your chosen market, translating product descriptions where needed, using local currencies, adjusting sizing or packaging, and aligning messaging with cultural norms.'
Localisation builds trust and relevance, increasing the likelihood of purchase. Understanding regional buying behaviours and adapting accordingly helps brands stand out in competitive foreign markets.
ALSO READ: Six ways to avoid burnout as an entrepreneur
Tax and customs obligations in cross-border e-commerce
Saffy said that it is also important to understand your tax and customs obligations as a business owner, as every country has its own duties, including VAT rules and customs requirements; it is essential to research these thoroughly.
'Transparency around duties and delivery timelines will help to prevent customer dissatisfaction. Staying compliant not only avoids legal trouble but also enhances credibility and paves the way for further global growth.'
He advises business owners to also offer multiple payment options, because international buyers are more likely to complete a purchase when they have access to familiar and secure payment methods.
'Integrating globally renowned and reputable payment platforms that enable transactions in multiple currencies and across borders will improve conversion rates.
'Flexibility in payment options shows professionalism and meets the expectations of today's sophisticated online shopper.'
Headache-free delivery
Saffy added that it is important to establish an efficient and headache-free delivery system, as this is key in cross-border success.
'Outsourcing logistics also allows businesses to focus on growth while reducing the operational administration burden. Partnering with experienced logistics providers helps SMEs manage international shipping and customs clearance seamlessly.'
He said there will always be challenges when entering new markets, but with the right tools and support. 'We believe that South African SMEs are well-positioned to seize the rewarding cross-border opportunities ahead.'
NOW READ: Political uncertainties that will impact SMEs in the coming months
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The South African
2 hours ago
- The South African
SOLD: Sale of SuperSport United confirmed
SuperSport United have officially been sold to Siwelele Football Club and are waiting for the PSL to approve the deal. This was confirmed in a statement by SuperSport International on Thursday, which added that after a closed bidding process, Siwelele were awarded the rights to purchase the Tshwane side. 'SuperSport International would like to confirm the sale of its Premier Soccer League (PSL) club, SuperSport United, to Siwelele Football Club (Pty) Ltd. 'Following a closed bidding process, Siwelele F.C was awarded the rights to purchase the three-time Premiership winners, pending approval by the PSL Executive Committee. 'The sale of the club comes as SuperSport makes strategic shifts to allow us to remain the biggest broadcaster in Africa and a leading global competitor. Shifts in the market, as well as the need to innovate in accordance with our core business, have necessitated focused direction to allow SuperSport to remain the best sports content provider on the continent and a leader in broadcast innovation,''' said SuperSport CEO, Rendani Ramovha. Siwelele chairman Calvin le John said they are happy to have won the bid to purchase the club. 'As Siwelele FC, we are privileged to have been given the responsibility of continuing with a rich winning tradition in the PSL. SuperSport and the MultiChoice Group laid an incredible 30-year platform that we wish to build upon, should we get the final vote of approval from the PSL executive committee,' Le John said. 'Out of respect for the PSL executive committee's processes, Siwelele F.C, MultiChoice and SuperSport will not be making any further statements pending the decision of the PSL.' Reports suggest that Matsatsantsa were sold for R50 million and will relocate to Bloemfontein in the 2025/26 Betway Premiership season and will be called Siwelele FC. SuperSport United endured a horror 2024/25 Betway Premiership season, finishing 14th and narrowly avoiding the promotion-relegation playoffs. Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1 Subscribe to The South African website's newsletters and follow us on WhatsApp, Facebook, X and Bluesky for the latest news.
IOL News
2 hours ago
- IOL News
Economic downturn signs emerge as South Africa's PMI drops to 50. 1
Citrus and fruit, vines, nuts, avocados, and beef, are among South Africa's main agricultural exports. S&P Global said new business volumes experienced their first decline since March, which can be attributed, at least in part, to a continued downturn in export orders, suffering a third consecutive monthly contraction. Image: Doctor Ngcobo / Independent Newspapers South Africa's private sector economy has signalled a concerning shift towards fragility, as evidenced by the latest S&P Global Purchasing Managers' Index (PMI). The PMI, which serves as a composite indicator of operating conditions in the private sector, revealed a notable decline on Thursday, dropping from 50.8 in May to 50.1 in June. This reading, while remaining barely within the expansion territory, raises red flags as business confidence plummeted to its lowest point in nearly four years. The PMI serves as a crucial economic barometer; readings above 50 indicate an improvement in business conditions compared to the prior month, while readings below this threshold reflect deterioration. This S&P economic indicator corresponds with the Absa PMI released on Tuesday, which showed that the economy remained in contractionary territory for the eighth consecutive month, despite the index rising by 5.4 points to reach 48.5 in June from 43.1 in May. With the June figure hovering just above the critical 50.0 mark in the S&P PMI, early signs of a potential economic downturn are evident. The PMI's underlying components painted a mixed picture: a decline in output and new business volumes contrasted with increases in stock levels and workforce size. In June, output levels across the private sector declined for the first time in three months, signalling a significant setback from the previous month when growth surged to a four-year high. Although this reduction was marginal, it marked the first contraction in activity since March, with weakness spanning nearly all sectors, except for services. Furthermore, new business volumes experienced their first decline since March, which can be attributed, at least in part, to a continued downturn in export orders, suffering a third consecutive monthly contraction. Amid these troubling economic signs, South African firms have displayed waning confidence in the outlook for business activity. The level of optimism dropped sharply, reaching its lowest point in close to four years. A noticeable decline in the proportion of firms expecting output growth from May significantly contributed to this drop. Factors such as ongoing domestic and foreign policy uncertainties have undermined optimism, despite positive influences from project starts and efforts to reach new clientele. David Owen, senior Economist at S&P Global Market Intelligence, said the drop in business expectations to their lowest since July 2021 showed that firms were growing increasingly nervous about the domestic and non-domestic economic outlook. "Nevertheless, the survey data suggests that companies were still willing to expand their headcounts and store more inputs, helped by a relatively benign (albeit quickening) cost environment." "And whilst the headline PMI dropped to 50.1 in June, eroding much of the growth in private sector conditions seen during May's six-month high, this was still a higher reading than those recorded in the first quarter, adding to estimates of a solid up turn in Q2 GDP." On a brighter note, employment data from the PMI revealed a modest increase in workforce numbers for the second time in three months. This rise, the most pronounced since May 2024, was chiefly driven by growth in the service sector. Additionally, the supply chain environment showed improvement, marking the longest stretch of enhanced supplier conditions in nearly nine years. This uptick is attributed to reductions in port disruptions and lower input demands, although the decrease in lead times remains minimal. Despite these positive developments, June saw intensified cost pressures across the South African economy, with input prices climbing at a solid pace. All sectors reported increases in costs, although it was the wholesale and retail sectors that experienced the most severe inflation rates. This increase in expenses can be linked to rising purchase prices and staffing costs, the latter of which experienced notably higher-than-average growth. Interestingly, though cost pressures mounted, the increase in selling prices remained modest, as businesses sought to balance the need to pass on costs with the realities of heightened competition. Encouragingly, reports indicated that a stronger rand allowed some firms to reduce their prices. BUSINESS REPORT
eNCA
2 hours ago
- eNCA
Ethiopia's mega dam on the Nile 'now complete': PM
Ethiopia's Prime Minister Abiy Ahmed on Thursday said a multi-billion-dollar mega-dam on the Blue Nile that has long worried neighbouring countries is complete and will be officially inaugurated in September. The Grand Ethiopian Renaissance Dam (GERD), launched in 2011 with a $4-billion budget, is considered Africa's largest hydroelectric project, stretching 1.8 kilometres wide and 145 metres high. Addis Ababa says it is vital for its electrification programme but it has been a source of tensions with downstream nations Egypt and Sudan who worry it will affect their water supply. Speaking in parliament, Abiy said GERD "is now complete, and we are preparing for its official inauguration". "To our neighbours downstream -- Egypt and Sudan -- our message is clear: the Renaissance Dam is not a threat, but a shared opportunity," he added. "The energy and development it will generate stand to uplift not just Ethiopia." The country first began generating electricity at the project, located in the northwest of the country around 30 km from the border with Sudan, in February 2022. At full capacity the huge dam can hold as much as 74 billion cubic metres of water and could generate more than 5,000 megawatts of power -- more than double Ethiopia's current output. The east African nation is the second most populous on the continent with a rapidly growing population currently estimated at 130 million and has growing electricity needs. Around half of its people live without electricity, according to estimates earlier this year by the World Bank. - Opposition - Egypt and Sudan have voiced concerns about GERD's operation without a three-way agreement, fearing it could threaten their access to vital Nile waters. Negotiations have failed to make a breakthrough. AFP/File | Amanuel SILESHI Egypt, which is already suffering from severe water scarcity, sees the dam as an existential threat because it relies on the Nile for 97 percent of its water needs. Earlier this week, Egyptian President Abdel Fattah al-Sisi and Sudan's de facto leader Abdel Fattah al-Burhan met and "stressed their rejection of any unilateral measures in the Blue Nile Basin". According to a statement by Sisi's spokesman, the two are committed to "safeguard water security" in the region. But Abiy said Addis Ababa is "willing to engage constructively", adding that the project will "not come at the expense" of either Egypt or Sudan. "We believe in shared progress, shared energy, and shared water," he said.
