3 steps to launch your ecommerce business in the South African market

So, you’ve got an online business selling products or services to clients locally and, perhaps, abroad. Sales-savvy or new to e-commerce, this guide will outline the steps needed to expand your ecommerce business into South Africa.

1. Customs Duties, Taxes and other Financial Considerations

South Africa’s customs process can be complex, demanding specialist knowledge and financial investment - arguably the biggest hurdle you’ll face is actually getting the goods from A to B.

The UK government website supplies resources for first-time exporters, and you may be eligible for support from UK Export Finance (UKEF).
 

Duties & Taxes on Exports to South Africa

There are four kinds of indirect (consumption) taxes. These include (1) customs duties, (2) excise duties and levies, (3) anti-dumping, safeguards and countervailing duties, and (4) VAT. Duties are usually calculated as a percentage of the value of the goods.

1. Customs duties are applied to imported goods, to raise revenue and protect the country’s local market.
2. Excise duties and levies are generally applied to high-volume daily consumable products, as well as certain luxury items. Environmental levies and health promotion levies are imposed with the aim of promoting desirable socioeconomic outcomes.
3. Anti-dumping, safeguarding and countervailing duties are applied to goods considered to have been ‘dumped’; those which have caused injury on multiple counts and those which have been subsidised.
4. VAT is levied at a standard rate on goods imported into South Africa, although certain goods are exempt.

Tariffs

Valuation

Origin

Carriage Charges

Insurance

Exchange Rates and Moving Money

2. Paperwork

*You may want to engage the services of a reputable freight forwarding / customs clearance agent to manage the paperwork for you*

Customs South Africa (Customs SA) requires that importers register and obtain an importer’s code:  they then uses a Single Administrative Document (SAD) to facilitate customs clearance.

The following are required from the exporter:

• One negotiable and two non-negotiable copies of the Bill of Lading - a document that establishes the terms of a contract between a shipping company and the exporter (or freight forwarder).

• A Declaration of Origin Form, DA59 (where a lower-than-general rate of duty is claimed, or for goods subject to antidumping or countervailing duty). One original signed copy of the form must be attached to the original commercial invoice.

• Four copies and one original Commercial Invoice, containing a full description of goods’ nature and characteristics.

• One copy of the insurance certificate (required for sea freight);

• Three copies of the Packing List

• Where restricted items are being imported, importers must possess an import permit.

​3. Marketing and Customer Support

Top tip: citizens of different countries display different consumer preferences. South African consumers are generally brand conscious and price sensitive, appreciating online promotions and shopping around for the best deal: ideally, create marketing materials that address these priorities.

Ensure that navigation around your sales platform is intuitive: signpost international shipping information, including payment and delivery options and international charges. You may want to consider language options- South Africa has eleven official languages, although English is most used for advertising.

Finally- consider multi-channel e-commerce. Selling via eBay or Amazon, in addition to your own platform, will expand your reach: not only that, but it could take some of the headache out of transportation, as several platforms can handle shipping for you.
 

One Final Tip…

Make finances a priority- your budget must include customs charges, transportation and potentially insurance.

Remember that you’re likely to lose a cut of your income transferring a foreign currency, unless you take steps to minimise your exposure to risk.

For detailed information and personal business support, contact your local trade office; you may qualify for free support from the UK’s Department for International Trade, which runs an E-Exporting Programme.