Page 8 - LUA Sep - October 2022 for Magzter

COVER STORY

industry back in 2021. With several of no experience of distance selling (trusting
these big retail giants training their lens on payment/delivery of products, etc),” he says.
South Africa’s online retail market growth Road networks are also largely used
prospects, it's ultimately the customers to deliver online purchases so it is only
who are likely to benefit from the ensuing prudent that road networks, transport laws,
e-commerce battle. and good infrastructure come together to
facilitate and smoothen online retail. But
TRUST, REGULATIONS & larger distances are another challenge faced
TRANSPORTATION HURDLES by eCommerce logistics players.
However, for online retail to happen “On average in Europe, for example,
several simultaneous and essential the distance between major cities is 1,300
processes like warehousing, packing, We are seeing km; in North America is 2,200km, in
sorting, inventory management, labelling, a demand for South Asia, it is 3,700 km and in Africa,
billing, shipping, payment collection, it is 4,100 km. The roads in Europe and
order management, facilitating returns e-commerce America are well developed and easy
and exchanges need to work in tandem to imports into to navigate, in Africa, although there
deliver the ultimate e-commerce delight to are some great new projects
its consumers, at scale. Africa, which underway, most major roads
Tempest observes, “Cross-border is forecast are not easy to navigate,
online trade (part of digital trade) is to increase while roads to smaller towns
certainly a major driver for the African and villages are extremely
Continental Free Trade Area (AfCFTA). as internet difficult to navigate. The same
Transport infrastructure is one issue technologies and goes for trains as the railroad
that you are looking at; telecoms service in America, Europe,
infrastructure and data costs are a smartphones India and some of Asia is
challenge. But the three major barriers become more extensive – which is
are customs procedures which are accessible. not so in Africa,”
often very antiquated and create delays; Alastair adds.
payment services which can cause delays GUILLAUME HALLEUX While the
of days even while payments clear; and QATAR AIRWAYS wheels of
regulations. Often these three elements
are interconnected with other challenges.” start scaling them and scaling logistics on
Tempest adds, “For example, while the ground is quite different. Africa has its
national customs authorities promote own challenges, people are fighting for day-
e-documentation, smart contracts and pre- to-day survival, for jobs, and e-commerce
clearance, weak telecoms coverage means in many ways is still like a luxury for
that some frontier posts have little or no many. We also have to factor in the
internet connection. Banking regulations, cost of transportation and delivery
particularly those covering remittances and the cost of food is also undergoing
from abroad, cause unnecessary delays inflationary pressures. There is also
and it is frequently the case that a a lack of a middle class
payment in country A’s currency has to with purchasing
be exchanged into US Dollars/UK Pound power, whether
sterling or in Euros in order to be sent to they are super rich
country B. The new PAPSS system (Pan- or poor, there is
African Payment and Settlement System) nothing called the middle class
set up by the AfreximBank (the African in many places.”
Export-Import Bank) does away with that Alastair Tempest mentions
sort of added cost.” that trust in e-commerce
With many big e-commerce companies remains an issue
in Africa burning big money and struggling although the
even as the world reels from supply chain pandemic may have
constraints and inflationary pressures, helped in shifting gears.
Girraj Sharma, Head Of Supply Chain at “If we look back at the start
Omnibiz Africa told the Logistics Update of e-commerce, the mail order
Africa, cautions, “You cannot build your business was very well established in North
own logistics and scale. You need to bring America, Europe, and some parts of Asia.
more partners on board and then begin to It hardly existed in Africa. So there was

6 LUA SEPTEMBER - OCTOBER 2022