The rise of cross-border online shopping

International express, parcel delivery and logistics services company Aramex is forecasting 57% customer growth for its Aramex Global Shopper (AGS) offering in 2017.

The exponential growth of the AGS online shopping delivery service mirrors the rise of cross-border online shopping in South Africa, driven predominantly by people’s desire for specialised products only available overseas.

Mark Mahoney, Manager eCommerce Services at Aramex – a service that enables South Africans to purchase off international eCommerce sites that are often otherwise largely inaccessible because of lack of delivery options – attributes the increase in online shopping to South Africans becoming more trusting in making online purchases. “People are increasingly seeing online shopping as a safe, convenient way to become fully fledged global citizens, with access to goods manufactured worldwide.”

According to the PayPal Cross-Border Consumer Research 2016 Global Summary Report, in 2018 South African online spend is predicted to exceed R53bn.

The KPMG The Truth About Online Consumers 2017 report finds the African/Middle Eastern market imports 50% of all online purchases from other regions, making it the number one online importer worldwide.

This is mainly attributed to fewer of the sought-after products being locally available and the big retailers being based overseas.

Until recently, delivery concerns have been a major obstacle hindering cross-border shopping growth.

AGS’s 47% shipment growth from 2015 to 2016 indicates that more people are turning to personalised shipping services to eliminate concerns.

In the second quarter of 2017, AGS shipment’s quarter on quarter growth was 12.6%.

Says Mahoney, “In the past, the international retailer’s inability to ship to South Africa – or to ship for exorbitant prices – was a deal breaker. Our model eliminates this concern and makes shipping a faster, more affordable option.”

Some of the most popular online categories for global cross-border shoppers are: clothing and apparel (46%), consumer electronics (24%), digital entertainment and education devices (24%), toys and hobbies (23%) and cosmetics (20%), according to the PayPal report.

China, the UK and USA are the most popular cross-border shopping locations. Mahoney has seen similar trends but he warns South Africans about shipping clothing due to high duty and VAT costs.

Globally, most people are still using PC to make their purchases, with 63% of online purchases by the African/Middle Eastern market made via PC, according to the KPMG report. However, the PayPal report suggests mobile is on the rise.

Mahoney confirms this, “PayPal suggests that mobile spend is likely to increase by 123% by 2018. As technology advances and internet connections become more accessible, smartphones will play a larger role. We have an AGS app that allows people to track their parcel’s progress once shipping takes place.”

Along with shipping and internet access, a final cross-border shopping deterrent for South Africans is the perception that only a credit card can be used.

KPMG’s report shows that millennials feel less comfortable paying by credit card than with debit, COD or prepaid gift cards.

This could simply be indicative of young people’s reduced access to credit. However, one no longer needs a credit card to shop online – any smart card with a chip has this capability.

AGS has partnered with FNB to give younger smart debit card holders increased purchasing power with free lifetime membership.

Mahoney concludes, “We’ve experienced exponential growth over the last few years in terms of our shipping and subscriber base. The catapulting growth of cross-border shopping shows little sign of abating – especially with the rise of mobile and increased internet access. We’re proud to be helping South Africans to shop the world.”

How Aramex Global Shopper Works:

AGS helps make people global citizens by providing lifetime members with 22 personalised local addresses worldwide.

When shopping cross-border, a member inputs the nearest AGS local address for delivery.

The package is delivered to the address then costed for shipping according to its actual (not volumetric) weight.

It’s then shipped, and the member is charged for any customs duties as well as the shipping fee once it lands in South Africa.

After payment is made, it gets delivered to the member’s door, all within the space of five to ten working days.

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The rise of cross-border online shopping