Cross-border eCommerce offers promising prospects for online businesses looking to invest in new sources of business growth. If you're considering opening up your store for business in international markets, it's worthwhile delving into consumer insights first to understand your target market's shopping behaviour and payment preferences.
Identifying new growth opportunities is the key to ensuring that your online business generates returns more effectively than your competitors. eCommerce is a fast-expanding market in South Africa – there are more online shoppers in South Africa today than ten years ago, and as more eCommerce stores rose to the opportunity, customers also became choosier about where they shop. With new markets expanding and the spread of globalisation, more South African shoppers opt to abandon local purchases in favour of more attractive overseas marketplaces.
In South Africa, 43% of online shoppers indicated in a recent survey that they purchased from overseas eCommerce websites. Online shopping has amounted to R8.8 billion in revenue for international websites over the past twelve months, indicating a stimulated consumer landscape in South Africa.
But online shopping doesn't just happen spontaneously. Customers have requirements and reflective tendencies that influence their purchase decisions. As such, the survey revealed that the main incentives for customers to shop outside their country are free shipping (60% of respondents), the availability of local currency for payment (58%), and secure payment methods (56%).
Cross-border eCommerce does have challenges and obstacles, which makes the chances of an uncompleted transaction on an overseas website just as good as local shopping cart abandonment. In the study, 72% of customers said that they stopped a purchase. High shipping costs, uncertainty about taxes and customs fees, and lengthy delivery times are the main reasons they don't make it past checkout.
Previous research also indicated that the number of cross-border purchases on South African eCommerce websites is on the rise, especially from Nigerian shoppers. Thirty percent of Nigerian cross-border shoppers have spent their cash via South African e-tailers in the past 12 months.
This survey data highlights the opportunities that South African online businesses need to capitalise on in order to effectively fulfil the eCommerce standards of local consumers. Whether they want to expand to international markets or tap into the local cross-border segment, businesses can put several measures in place that cater to the demands of shoppers and give them a stellar shopping experience.
Here are some of the popular payment methods:
1. Credit and debit cards: Credit and debit cards are the most preferred payment methods for online transactions in South Africa.
2. E-wallet services: E-wallet services are also popular in South Africa, and consumers use them for online payments.
3. Electronic funds transfers (EFT): EFT is another popular payment method in South Africa.
4. Mobile money transfer services: Mobile money transfer services like M-Pesa are popular in Africa, including South Africa.
5. Bank transfers: Bank transfers are also used for cross-border transactions.
6. PayPal: PayPal is a popular payment method for cross-border transactions.
7. Prepaid debit cards: Prepaid debit cards are also used for cross-border transactions.
8. Checks: Checks are still used for cross-border transactions, although they are less popular than other payment methods.
In conclusion, South Africa has a variety of payment methods for cross-border transactions, including credit and debit cards, e-wallet services, EFT, mobile money transfer services, bank transfers, PayPal, prepaid debit cards, and checks. E-wallet services are a popular payment method for cross-border transactions in South Africa. Consumers can use e-wallet services to store funds electronically and make payments without the need for a credit or debit card. E-wallet services are secure and convenient, and some popular e-wallet services in South Africa include SnapScan, Zapper, and FlickPay.