Larry Sack, chief executive of ParcelJet, says a lot of local courier companies are getting into this business.
"But to be successful in this sector requires high volumes and a national infrastructure," he says.
He says online retailers want to charge as little as possible for delivery and some are incorporating the courier fee into their margins and see it as a direct cost.
"The feedback from retailers is that customers want an all-inclusive price and do not want to pay extra for courier delivery," says Sack.
Gary Marshall, chief executive and chairman of the SA Express Parcel Association, says five years ago there was no access to the world from Mthatha, (Umtata) in the Eastern Cape but today locals can go to an Internet cafe and order goods from anywhere in the world and have them delivered to their door by courier.
"Goods ordered online can now be delivered anywhere in SA, even to the smallest place," he says.
Marshall says conventional business-to-business delivery is still the biggest part of the market but the business-to-consumer market is growing at about 10% a year, while business-to-business has declined by about 10% over the past few years.
George van der Merwe, managing of UTi Distribution, says online retailers tend to offer free delivery and build the cost into their margins. "It is costly to service the e-commerce market with the traditional courier delivery model, so we have to look at ways to do things differently," he says.
There is still a lot of work to be done to improve the customer experience when it comes to e-commerce deliveries, says Van der Merwe.
Wilnand Vlok, commercial executive at Berco, says e-commerce is growing by 30% locally with a huge increase in the number of traditional retailers and newcomer entrepreneurs selling their goods and services online.
He says two to three years ago, the trend was three- to five-day delivery, but it is common today for online retailers to offer next- day or even same-day delivery.
"We are getting to the point where the customer dictates the delivery time frame."
He says online retailers are realising that a good customer experience from order to delivery will secure future business.
Charles Brewer, MD for sub-Saharan Africa at DHL, says e-commerce is growing at 30% a year globally. But it poses challenges for SA, one of them being the minimum value of items being brought into the country before duty is payable.
"In SA the minimum value is US$60 compared with Angola at US$300, and Australia where it is US$1,000," he says.
Another hurdle is the length of time it takes to clear goods through customs.
Brewer says the delivery of goods purchased online and other business-to-consumer deliveries requires a different way of thinking, because recipients are often not at home during the day.
Ken Light, chief business development officer at SkyNet, says the number of traditional retailers that are selling their products online is increasing by 25% a year. He says the company is experiencing growth of between 200% and 300% this year in its e-commerce deliveries services.
Source: Business Day via I-Net Bridge
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