Email This Post Email This Post

Can PayPal Convince Sellers to Export to China?

The world’s biggest online shopping day isn’t Black Friday or Cyber Monday – it’s Singles Day in China. PayPal is advising merchants to prepare now if they want to take advantage of the holiday that Alibaba has turned into a commercial success in China.

PayPal says there are “incredible” opportunities for U.S. merchants to reach Chinese online consumers and dramatically expand their overseas sales, and released new research showcasing the attractions.

For example, it says that among Chinese consumers who have made cross-border purchases from the U.S.:

Sponsored Link
  • 53 percent purchase clothing, apparel, footwear and accessories, spending on average $485 in a typical transaction;
  • 46 percent purchase consumer electronics, spending on average $1229 in a typical transaction;
  • and 41 percent purchase cosmetics/beauty products, spending $512 in a typical transaction.

PayPal also cited its survey data that found the reasons US products are appealing – it found that among Chinese shoppers who have made cross-border purchases from the U.S., more than half have done so for the following reasons: Higher quality products (55 percent) – products that are superior to what is available outside the U.S.; Authenticity (53 percent) – products which originate in the U.S. and reflect American culture and ethos; and Better prices (53 percent) – a good, fair price for products they perceive as high quality.

Other incentives to purchase from US retailers include purchase incentives, better brand offerings, and buying items not available in China.

Fifty-three percent of those surveyed said that secure online transactions would drive them to buy cross-border, and 35 percent report having used PayPal within the last 12 months

The research, conducted between June 17-22, 2015 by Nielsen’s Harris Poll in collaboration with PayPal, surveyed 1,313 Chinese adults (18 and over) who shop online and make cross-border purchases. The survey focused specifically on their views regarding product preferences, purchase drivers, spending thresholds, and devices used to make online purchases.

What may concern some sellers, however, is the potential higher costs of cross-border trade especially when taking into account the cost of returns. Last week, PayPal announced free return shipping and expanded buyer protection in China – including free return shipping even in cases when the shopper changes his or her mind.

Here’s what PayPal is promising Chinese shoppers on its website:

Returning goods overseas should be easy.
Bought something but it didn’t fit, wasn’t what you expected or simply changed your mind? Don’t worry. Send it back and we’ll take care of the return shipping cost*. Activate now to enjoy this service on your next purchase.

There are limits (“Up to US$15, one refund per month for eligible purchases until 31st December 2015.”), but the offer demonstrates the risks sellers face in selling internationally.

On the other hand, PayPal said its research has shown that international shoppers spend twice as much as domestic online shoppers, making cross border trade a tempting opportunity for those merchants who understand the costs.

Interested in reading PayPal’s pitch to US merchants? You can find the post on the PayPal blog, which includes a link to more of its findings.

Ina Steiner on EmailIna Steiner on LinkedinIna Steiner on Twitter
Ina Steiner

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. Send news tips to ina@ecommercebytes.com.


Leave a Reply