Shipping holds key to distance selling

Efficient and low-cost (or free) shipping is the key to success in the global distance selling market, which was estimated at ¤616 billion (R8.6 trillion) in 2013. The market is expected to see annual growth of 10.7% over the next five years, according to Thomas Kipp, chief executive officer of DHL eCommerce. He was commenting on the findings of a DHL ‘Shop the World’ survey which questioned over 11 000 people in 20 countries in Europe and the Americas, and included China, Russia and Australia. It found that “the key ordering criterion is speedy, free delivery”. Acceptable delivery times range from between 3.8 days in Turkey to 12.4 days in Russia. While Africa was excluded from the DHL survey, a 2013 survey by yStats puts the African market at around ¤1 billion (R14 bn) a year, with projected growth of 40% over the next 10 years. According to yStats, South Africa is “home to some of the largest merchants on the continent, such as online merchant of books and electronics, Kalahari, and online fashion retailer, Zando". “However, other countries with high potential might overtake the leader in the future. Egypt, Morocco, Nigeria and Kenya follow South Africa in terms of online shopper penetration, but some of them lead in terms of Internet penetration and mobile usage.” The DHL survey identifies some of the key success factors for South African companies wanting to enter the online market or to expand their footprint. There is opportunity, as some 45% of internet users polled had ordered goods from abroad. The top products offered via distance selling are fashion, consumer electronics, media products and food. The main reasons for ordering goods from abroad are that they are not available domestically and are lower-priced. In emerging economies, better quality and protection against counterfeit goods and product piracy are key drivers in the purchasing decision. Annual per capita orders average 13, with Mexican shoppers buying an average of six times a year at the low end, and the British leading with 29 purchases a year. Customers mainly search for products online (93%), largely via search engines and suppliers’ websites. The highest return rates are seen in Germany, Austria, Switzerland and the Netherlands (between 9% and 13%).