Some of Today’s Hottest Cross-Border Trade Growth Markets

While we hear about the explosive growth of ecommerce in the U.S. and China, one can’t help but wonder what the next big market will be. Which countries are on the verge of ecommerce renaissances, about to hit the inflection point into a new era of online buying?

As the barriers to international ecommerce are being surmounted with the rise of new logistics platforms, more focused government regulation, and secure payment processing for consumers and businesses alike, we are looking at some of today’s hottest cross-border trade ecommerce markets to find out not only where we’ll likely be buying from next, but also where the next untapped business opportunity awaits.

India (where online retail is set to grow 500%  from 2014 to 2018)

While Internet penetration remains relatively low in India at 19% (vs. 46% in China and 87%  in the U.S.) the country is set to overtake the U.S. as the world’s second-largest Internet market by 2018, with 297 million online users.

Despite lower rates of Internet accessibility due to both infrastructure and cost, ecommerce in India is expected to grow to $50 billion by the year 2020. This is particularly impressive considering that a large part of digital purchases made by Indian consumers today are still paid for by cash-on-delivery, wherein the customer pays in-person for their goods once they arrive at their door.

One of the key drivers for India’s anticipated ecommerce buying boom is a growing urban middle class that is more open to technological trends. In addition, while traditional Internet penetration is still creeping upward, smartphone use is skyrocketing, with nearly half of India’s active Internet users being mobile-only.

China (where online retail is set to grow 125% from 2014 to 2018)

It may not be long before “Singles’ Day,” the Chinese ecommerce holiday, is celebrated around the world with more notoriety than Black Friday and Cyber Monday combined. The holiday, which rang in a massive $14.3 billion in sales for 2015, is just one indicator that China has hit number one as the largest ecommerce market in the world.

China’s ecommerce growth has also been exceptional because of its skyrocketing cross-border sales, which is happening despite its recent currency and stock market volatility. A new PayPal/Ipsos survey found that approximately 35% of Chinese shoppers who shopped online in the past 12 months, shopped from a foreign website – a big jump from just 26% 2014.[v] Baby products and beauty items are the most popular shopping categories for Chinese consumers who shop on foreign websites, respectively making up 32% and 25% of cross-border sales.

Brazil (where online retail is set to grow 84% from 2014 to 2018)

Leading Latin America in 2014 with 37% of the region’s ecommerce sales, Brazil is a boisterous and evolving market that is a must-watch in the coming years, particularly due to its growth in mobile and cross-border trade. By year’s end, the country is expected to reap online sales of nearly $32 billion, despite the recent economic slowdown and a highly competitive marketplace.

Mobile commerce continues to perform strongly in Brazil, with sales expected to reach $774 million in 2016.

Mexico (where online retail is set to grow 96% from 2014 to 2018)

Mexico’s ecommerce market, the third largest in Latin America after Brazil and Argentina, is set to nearly double by 2018.

Considering that fewer than one-fifth of the country’s 51 million Internet users also make online purchases and that almost two-thirds of the population do not have bank accounts, the country has room for growth over the next four years. Furthermore, ecommerce sales make up a rather low percentage of overall retail sales—1.5% compared to Brazil’s 4.1%.

Mobile is a key driver as Mexican ecommerce matures. One-third of the population uses a smartphone, making it the largest mobile market in Latin America. This is significant compared to Brazil and Argentina, where smartphone penetration is still less than 25%.   This year, Mexico will record a nearly 40% increase in mobile commerce sales, compared to a 19% increase in ecommerce. This growing trend is largely driven by millennials, a demographic responsible for 88% of all m-commerce purchases. At the end of this year, there will be 65 million active Internet users in Mexico, a number projected to jump to 80 million by 2018.

Clearly, these aren’t the only countries enjoying the surge of global ecommerce. Nations like Nigeria, Argentina, France, Germany, Japan and Australia are moving along their respective paths of growth, each overcoming barriers like regulations, consumer attitudes and payment security. To learn more about cross-border trade in these and other markets around the world, visit PayPal PassPort.

 Melissa O’Malley is the Director of Global Merchant and Cross Border Trade Initiatives, PayPal

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