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China Beats Out US as Global Shopping Destination

PayPal and Ipsos released their third annual cross-border commerce report. The global insights research, which investigated the online domestic and cross-border shopping habits of more than 28,000 consumers in 32 countries, reveals new opportunities for merchants to expand their international sales.

Shopping internationally on mobile devices gains traction 
In Asia Pacific, consumers claim that on average, 37 percent of cross-border purchases are made on a mobile device, the majority of which are on a smartphone. In fact, 68 percent of all cross-border shoppers in the Asia Pacific region reported making a cross-border purchase on a smartphone in the past 12 months. In China, the survey saw a marked increase in the shift to mobile purchasing between 2015 and 2016, with an average of 35 percent of cross-border purchases being made on a smartphone in 2016 vs. 27 percent in 2015.

If the growth in Asia Pacific is an indication of a global shift to increased mobile cross-border shopping, there is a tremendous opportunity for merchants in Europe and North America. In the 2016 findings, Western European, Eastern European and Northern American shoppers each claimed to make less than 15 percent of cross-border purchases on a smartphone.

The future of online spending – who is most likely to shop more, and shop the most cross-border 
Sixty-four percent of internet users in China, 39 percent of users in Russia and 26 percent of users in the UK claimed that their online spending will increase in the next 12 months. Among all shoppers interviewed across all countries, those predicting to increase their online shopping say that this is primarily driven by convenience of shopping online (selected by 76 percent), changes in disposable income (30 percent), faster shipping (35 percent) and cheaper shipping (27 percent).

“Selling internationally is a substantial opportunity for merchants around the globe to grow their business. At PayPal, we’ve seen our cross-border volume grow 38 percent in the last two years – from $14 billion a quarter in Q3 2014 to $19 billion a quarter in Q3 2016,” said Melissa O’Malley, Director, Global Initiatives at PayPal. “PayPal’s mobile payment volume is also up 56% over last year, so we see the direct benefits merchants can reap by optimizing their mobile shopping experiences.”

Where consumers are buying and why 
For the first time in the survey’s three-year history, China is the most popular cross-border online shopping destination for global online shoppers (21 percent of all online shoppers interviewed claimed to have shopped cross-border from Chinese websites in the past 12 months), followed by the U.S. (17 percent) and U.K. (13 percent).

Current cross-border shoppers are looking for a good deal. Seventy-six percent of global consumers polled who shop cross-border cited better prices as a reason for shopping in another country instead of the country where they live. Gaining access to items not available in their own country also ranked high (selected by 65 percent) as a reason for having made purchases internationally.

However, the reasons change, when it comes to the factors that would make online shoppers more likely to buy from a website in another country. Free shipping (selected by 46 percent of global online shoppers) and a secure way to pay (44 percent) are the top factors that could drive more cross-border shopping.

The distinction between these insights is important for merchants – to retain a current cross-border shopper, better pricing is key. To motivate a shopper who may have never shopped cross-border before, free shipping and a secure way to pay are paramount in converting them.

Security drives choice of payment method 
In 24 of the 32 countries surveyed, PayPal is the most frequently cited cross-border payment method used. Key factors for choosing a preferred payment method for cross-border shopping included security (53 percent of global cross-border shoppers with a preferred cross-border payment method selected “a secure way to pay”), convenience (44 percent) and being accepted by most retailers (41 percent). Among Cross-border shoppers globally who cite PayPal as their preferred cross-border payment method, 44 percent say that I do not need to share my financial details with the seller is a reason for their preference.

Source: PayPal Press Release

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.