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
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