M-commerce will be the next big thing

hile express airfreight remains a small percentage of the freight and logistics sector locally, it is a potentially burgeoning market with healthy future growth prospects especially for the SADC region, according to industry leaders. However, some analysts have cautioned that a major challenge for express airfreight operators in South Africa will be to remain price-competitive to encourage users to switch from slower but cheaper road-based services. According to the South African Express Parcel Association, which represents more than 100 local operators, including all the global players, China is still the fastest-growing user of express logistics, although its economic growth rate is no longer in double digits. “The continent of Africa is growing faster than the European Union, meaning that regional opportunities should mushroom,” Garry Marshall, Saepa CEO told FTW. Marshall said m-commerce (purchase by cellphone) was one of the next big anticipated growth areas for the express freight sector. “We’re seeing m-commerce gaining ground much as e-commerce did earlier. M-commerce sales in the US topped $10 billion in the first half of 2013. It is expected that m-commerce will account for 25% of all online sales by 2017,” he said. SA country manager for ATC Aviation, Gerd Von Mansberg, said express courier growth had levelled out in Europe but the sector was growing in Africa, albeit from a lower base. “The volumes to Windhoek are really growing and we are certainly seeing steady growth into Africa. The smaller countries are developing and more tenders are being written,” Von Mansberg said. Express airfreight to Zimbabwe, Tanzania, Egypt, Nigeria and Zambia have also experienced growth, he said. This is mainly being seeing in pharmaceuticals, specialist pharmaceuticals such as vaccines for humans and animals and chronic medication, in the delivery of tenders and other documents as well as ore samples for the mining sector. He added that SA supermarkets that had expanded into the continent also used express airfreight for emergency deliveries of perishable foods such as yoghurt and caviar. However, Hannah Edinger, a director of the emerging market investment research and strategy firm Frontier Advisory, said that locally airfreight contributed only a fraction to the overall freight and logistics sector when measured in tonnage. “While there are some reporting challenges, Acsa estimates that the total airfreight market in South Africa stands at about 400 000 tonnes per year. The airfreight industry in South Africa in turn is valued at US$50 million. Key players include the likes of SAA Cargo, Bid Air Cargo and Imperial Air Cargo,” Edinger said. INSERT & CAPTION 1 The continent of Africa is growing faster than the European Union, meaning that regional opportunities should mushroom. – Garry Marshall INSERT & CAPTION 2 Express courier growth has levelled out in Europe but the sector is growing in Africa, albeit from a lower base. – Gerd von Mansberg