Mobile cross-border shopping is a thing, and Asia is owning it: PayPal

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Asia Pacific is emerging as a leader in mobile cross-border shopping, with China as the most popular cross-border online shopping destination for global online shoppers, according to new research from PayPal and Ipsos.

PayPal’s third annual cross-border commerce report, 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 – particularly on mobile devices.

In Asia Pacific, consumers claim that on average, 37% of cross-border purchases are made on a mobile device, the majority of which are on a smartphone. In fact, 68% 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% of cross-border purchases being made on a smartphone in 2016 vs. 27% in 2015.

If the growth in Asia Pacific is an indication of a global shift to increased mobile cross-border shopping, that spells 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% of cross-border purchases on a smartphone.

The report also examines who is most likely to shop more, and shop the most cross-border. On that score, 64% of internet users in China, 39% of users in Russia and 26% 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%), changes in disposable income (30%), faster shipping (35%) and cheaper shipping (27%).

“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% 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.”

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% of all online shoppers interviewed claimed to have shopped cross-border from Chinese websites in the past 12 months), followed by the US (17%) and UK (13%).

Source: PayPal cross-border commerce report
Source: PayPal cross-border commerce report

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%) 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% of global online shoppers) and a secure way to pay (44%) 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.

One other finding of interest: security drives the choice of payment method.

Key factors for choosing a preferred payment method for cross-border shopping included security (53% of global cross-border shoppers with a preferred cross-border payment method selected ‘a secure way to pay’), convenience (44%) and being accepted by most retailers (41%).

As it happens, in 24 of the 32 countries surveyed, PayPal is the most frequently cited cross-border payment method used. Among cross-border shoppers globally who cited PayPal, 44% say that ‘I do not need to share my financial details with the seller’ is a reason for their preference.

Click here [PDF] to view the global results.

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