Tips for buying online in Africa this festive season
With the increased availability of broadband access, more affordable data costs offered by mobile operators and the consistent development of mobile devices, online shopping is gaining great traction in Sub-Saharan Africa.
Fatima Sullivan, Head of Retail at DHL Express Sub-Saharan Africa said that with the upcoming festive season fast approaching, consumers are increasingly choosing to purchase gifts online from both local and foreign retailers due to the ability to select from a wide range of products at competitive prices, without being limited by geographical locations, at any time that is convenient to them.
“With improved infrastructure, in terms of Information and Communications Technology (ICT), and online safety and security, more people are choosing to make use of online shopping over traditional brick and mortar outlets due to the variety of products available to them at just a click of a button,” said Sullivan.
JUMIA, which only launched in 2012, has already expanded into six markets, to take advantage of this growth, with Zando planning expansion plans in the near future.
Jeremy Hodara, Co-Chief Executive Officer of the Africa Internet Holding and Sascha Breuss, Managing Director of Zando agree, that “it is very expensive to buy abroad.”
They also emphasised on the importance of a strong logistics partner to gain the customers trust.
“This is the biggest test, since there are many fears of frauds and we have to educate consumers about shopping online securely. For example, we have to be transparent on prices, taxes, or shipment costs.
“That’s why JUMIA and ZANDO accept payments on delivery and offer free returns to deliver a safe, stress-free and convenient shopping experience.”
Fatima Sullivan, said that while online shopping has many benefits, not many South African consumers are aware of the regulations involved with importing products purchased online from international retailers, which could lead to consumers incurring additional expenses, thereby making the product less of an attractive buy.
“As an example, all shipments transported across international borders must be cleared through Customs, where, depending on the type of goods being shipped, they may also be subject to certain other restrictions and regulations.
“There are goods such as clothing that attract high rates of duty and are subject to interventions by Customs where the price, contents and country of manufacture are often interrogated to mitigate a wide range of risks.”
She adds that confirming any possible restrictions attached to particular goods is vital and should be the first action taken by consumers before making a purchase online in order to avoid suffering any financial losses in the event that goods are detained by Customs.
When purchasing goods online from international retailers, Sullivan said that it is important to bear the following factors in mind to avoid additional costs or a delay in delivery of the goods:
• Import taxes and duty: Usually taxes and import duty costs are calculated specifically on the value of the imported goods.
Consumers should also be aware that certain products such as footwear and wines are calculated part in value and/or in quantity, and may be subject to permit requirements based on quantity, while others, such as clothing, jewellery, perfumes and mobile devices, may only be calculated on the value of the product.
• Customs clearance: Depending on the item, various levels of customs clearance might be necessary. This could delay your shipment due to processing or physical inspection, so it’s important to order your goods well in advance, to ensure they arrive in time.
• Choose a suitable courier service: Larger express operators like DHL have a strong footprint in Africa, and have a well-established working relationship with Customs and local authorities, ensuring a speedy clearance and delivery of goods.
• Gifts: In most countries, gifts are only acceptable between individuals and a full description of the contents is required, the generic description “Gift” is not accepted. Again, this varies per country.
• Be aware of the different shipment costs: It is important to establish what costs the shipper and the customer will be responsible for prior to the shipping of the goods.
There are ultimately three main costs associated with the movement and clearance of goods: a) the cost of the goods payable to the shipper, b) the shipping costs to the customer’s door, and c) the duties, taxes and Customs clearing costs.
In most instances, the duties and taxes payable in the country of destination cannot be accurately determined by the shipper at the point of ordering the goods and these costs are not included by the shipper in their quotations to the customer. As a result, on arrival, these charges are billed to and payable by the customer before the package can be claimed – often to the customer’s total surprise.
This ultimately could result in the landed cost (the total amount of all costs) of the e-retail merchandise becoming much more costly for the buyer than expected and could potentially put them off repeat on-line purchases.
“It is advisable for consumers to speak to the online retailer or a local expert / service provider should they be unsure about any regulations that may apply to their purchase,” concludes Sullivan. With the festive season boom expected, you don’t want to be in for an unexpected surprise in terms of duties and taxes, or that your Christmas present arrives on December 28th.”
5 minutes with... Janthana Kaenprakhamroy, CEO, Tapoly
Founder and CEO of award-winning insurtech firm Tapoly, Janthana Kaenprakhamroy heads up Europe’s first on-demand insurance platform for the gig economy, winning industry awards, innovating in the digital insurance space, and leading with inclusivity.
Here, Business Chief talks to Janthana about her leadership style and skills.
What do you do, in a nutshell?
I’m founder and CEO of Tapoly, a digital MGA providing a full stack of commercial lines insurance specifically for SMEs and freelancers, as well as a SaaS solution to connect insurers with their distribution partners. We build bespoke, end-to-end platforms encompassing the whole customer journey, but can also integrate our APIs within existing systems. We were proud to win Insurance Provider of the Year at the British Small Business Awards 2018 and receive silver in the Insurtech category at the Efma & Accenture Innovation in Insurance Awards 2019.
How would you describe your leadership style?
I try to be as inclusive a leader as possible. I’m committed to creating space for everyone to shine. Many of the roles at Tapoly are performed by women and I speak at industry events to encourage more people to get involved in insurance/insurtech. Similarly, I always try to maintain a growth mindset. I think it’s important to retain values to support learning and development, like reliability, working hard and punctuality.
What’s the best leadership advice you’ve received?
Build your network and seek advice. As a leader, you need smart people around you to help you grow your business. It’s not about personally being the best, but being able to find resources and get help where needed.
How do you see leadership changing in a COVID world?
I think the pandemic has proven the importance of inclusive leadership so that everyone feels supported and valued. It’s also shown the importance of being flexible as a leader. We’ve had to remain adaptable to continue delivering high levels of customer service. This flexibility has also been important when supporting employees as everyone has had individual pressures to deal with during this time. Leaders should continue to embed this flexibility within their organisations moving forward.
They say ‘from every crisis comes opportunity’, what opportunities do you see?
The past year has been challenging, but it has also proven the importance of digital transformation in insurance. When working from home was required, it was much harder for insurers to adjust who had not embedded technology within their operating processes because they did not have data stored in the cloud and it caused communication delays with concerned customers at a time when this communication should have been a priority, which ultimately impacts the level of customer satisfaction. This demonstrates the importance of what we are trying to achieve at Tapoly in driving digitalisation in insurance and making communication between insurers and distribution partners seamless.
What advice would you give to your younger self just starting out in the industry?
Start sooner, don’t be afraid to take (calculated) risks and make sure you raise enough money to get you through the initial seed stage.