US ONLINE businesses are leading the way in business-toconsumer e-commerce, but they are only selling high-value goods to their own domestic market and neighbouring Canada.

"It is almost impossible to procure anything of value online in the US from SA or any other country," says Tjaart Kruger, executive consultant for supply chain solutions at Comparex Africa.

He says the big issue is the payment of the goods and not the physical delivery, which can be done by courier.

For smaller items such as books, sellers are prepared to take a risk and will accept Visa and MasterCard payments, even though there is no validation process. But for high-value goods, most US companies will only accept card payment by American Express because card-holders' details can be validated online, says Kruger.

It is also impossible to arrange a money-order from SA to the US, even for small amounts, he says.

"You can do this for the UK and some African countries, but there is an explicit list of where you can send a money order."

When procuring goods online there is often not enough information on the website about the goods on sale, and there is therefore a risk of purchasing the wrong item.

This may result in having to make a call to verify that the item is the correct one.

Another issue is that it is costly to courier bulky items and the transport could end up costing more than the product itself.

"Online sellers have not yet got it right in terms of exploiting best logistics practices to reduce the cost," says Kruger.

For example, there is a huge difference in the price of sending goods by seafreight instead of by air courier.

He says suppliers that get this right will be globally successful.

Countries such as SA would be good target markets for online selling for suppliers who get their logistics and online payments mechanisms right.

"Along with other countries, SA is predominantly an importer of luxury goods, so there is potential for sellers that can solve these problems."

Nov 11 2003 07:25:47:000AM  Business Day 1st Edition