China’s shoppers are becoming even more cross-border-savvy, PayPal Director of Global Initiatives Melissa O’Malley told Growing Global 2016 attendees during her keynote session on April 13 in Cincinnati.
PayPal’s findings support the growth trend: 35% of Chinese online shoppers claim to have shopped cross-border in 2015, a nine percentage point jump over 26% PayPal reported in 2014.
“Cross-border sales will take an increasing share of online commerce,” O’Malley said. “We have a massive opportunity, but to take advantage of it, we need to understand what is driving it.”
O’Malley added that mobile commerce is growing at a faster rate than ecommerce. That means merchants need to think about how their sites are optimized for mobile. What’s more, the findings also show that consumers prefer to use an app over a browser on mobile.
So where is mobile spend the highest? Nigeria, China and UAE.
In Nigeria, 37.8% of online spending is done via smartphone. That’s three times the global average of 16%. In China, 33.6% of online spending is done via smartphone, and in UAE, it’s 30.5%.
O’Malley notes that the biggest growth opportunity for mobile spend is in France, The Netherlands and Argentina. In France, 6.6% of online spending is done via smartphone. In The Netherlands, it’s 6.9%, and in Argentina, it’s 8.8%.
Which country’s consumers trust cross-border merchants the most? O’Malley said shoppers in India and Ireland have a high amount of trust for online stores in other countries and do not care if a retailer is based overseas.
The Japanese market is more difficult – consumers there have a lower trust for online stores from overseas versus their domestic stores, and they are also quite concerned about purchasing from a foreign website that is not in their language.
Currency conversion is a key factor to consider if you are selling cross border. Of those surveyed globally, 73% would prefer to have the option of paying either in local currency or my own currency; 62% check currency conversion rates before making purchases in foreign currencies; and 45% would not feel comfortable making purchases online in a foreign currency.
Being able to shop in their own currency is important to consumers, but less than half of US merchants offer currencies other than USD, O’Malley noted.
Just over half of US merchants do not include cross-border trade taxes in their checkout price, and very few of this group intend to. But in the top three cross-border trade markets, between a quarter and a third of cross-border cart abandoners cite unclear fees/taxes as a reason.