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Millions of consumers cross virtual borders to shop online
94 million shoppers will buy $105 billion from foreign sites this year, PayPal says.
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Topics: Australia, Brazil, Canada, China, consumer electronics, cross-border shipping, David Marcus, e-payments and security, fulfillment and delivery, Germany, health and beauty, Hong Kong, international e-commerce, Nielsen, online apparel sales, PayPal, United Kingdom
U.S. online retailers that don’t accept orders from consumers in other countries are missing out on sales, as tens of millions of shoppers are eager to buy from U.S. e-commerce sites, according to a PayPal-sponsored survey released today.
The survey of online shoppers in six major markets suggests that 93.7 million consumers in those six countries will buy $105 billion worth of goods from e-commerce sites in other countries this year. That will grow by 2018 to 130 million online shoppers in these six countries crossing digital borders to buy $307 billion worth of merchandise, PayPal says. The Nielsen Co. conducted the survey of more than 6,000 cross-border online shoppers in the United States, Germany, United Kingdom, Australia, China and Brazil from May 27 to June 12.
U.S. e-commerce sites were the most popular destination, cited by 45% of the online shoppers surveyed. That was followed by the U.K. at 37%, China 26%, Hong Kong 25%, Canada 18%, Australia 16% and Germany 14%. The most-cited reason for buying from a foreign e-commerce site was to save money, cited by 80% of respondents, followed by finding goods not available locally, mentioned by 79%.
The most common items bought were clothing, shoes and accessories, totaling $12.5 billion of cross-border purchases by consumers in these six countries. Next came health and beauty products, $7.6 billion; personal electronics, $6.0 billion; computer hardware, $6.0 billion; jewelry, gems and watches, $5.8 billion.
"Cross border trade is nothing new. Our local stores are filled with goods from around the world. What is new is how easy it has now become for consumers to shop online directly from merchants around the world and the massive opportunity that represents," says David Marcus, president, PayPal. "Our message to merchants is if you are looking for new ways to grow your sales, especially in an economic downturn, start selling directly to 94 million cross-border shoppers in these 6 markets and own a piece of this $105 billion market.”
Nine out of 10 cross-border shoppers surveyed say they want protection for their purchases from foreign sites, with consumers in China and Brazil most concerned about that. Eight of 10 say they have paid with PayPal, which PayPal says makes it the most commonly cited payment method among respondents.
Here are selected results from the six countries:
- U.S.: 34.1 million cross-border online shoppers will buy $40.6 billion worth of goods in 2013; that will grow to 41.8 million buying $80.2 million by 2018. They mainly shopped at U.K. e-retailers, cited by 49%, followed by China 39%, Canada 34%, Hong Kong 20%, Australia 18%.
- Brazil: 5.3 million shoppers bought R$2.6 billion ($1.17 billion); that will increase to 9.4 million buying R$16.8 billion (US$7.56 billion) by 2018. The shop most at U.S. retail sites, 79%, followed by China 48%, Hong Kong 17%, U.K. 17% and Canada 14%.
- U.K.: 15.9 million consumers will buy 8.5 billion UK pounds (US$13.06) worth of goods this year, rising to 18.5 million purchasing 18.0 billion UK pounds (US$27.66 billion) in 2018. They most often purchase from the U.S., 70%, followed by China 23%, Hong Kong 21%, Germany 19% and Ireland 15%.
- Germany: 14.1 million cross-border shoppers will spend 7.6 billion euro (US$10.04 billion) at foreign retail sites this year, growing to 15.8 million shoppers spending 11.0 billion euro (US$14.53 billion) by 2018. 48% buy from U.S. sites, 46% from the U.K., 33% from Austria, 17% from China and 16% from the Netherlands.
- China: 18 billion online shoppers will purchase RMB 216 billion (US$35.19 billion) this year from foreign sites, increasing to 35.9 million shoppers and RMB1.0 trillion (US$160 billion) in purchases by 2018. They most often shop retail sites in the U.S., 84%, followed by Hong Kong 58%, Japan 52%, U.K. 43% and Australia 39%.
- Australia: 6.3 million shoppers will purchase A$6.5 billion (US$6.02 billion) this year; that will grow to 8.4 million shoppers purchasing A$16.6 billion (US$15.37 billion) in 2018. Principal destinations are U.S. 69%, U.K. 47%, China 31%, Hong Kong 29% and Canada 9%.
China's government has disclosed plans to build industrial parks in five cities to facilitate cross-border sales of Chinese products to online shoppers in other countries. The first of those cross-border facilities opened this month in Hangzhou, China, 110 miles southwest of Shanghai and home to China's leading e-commerce company, Alibaba Group, No. 1 in the Internet Retailer Asia 500.