Many shoppers in foreign countries prefer to buy from U.S.-based online retailers, but few U.S. shoppers choose to shop online internationally.
That’s according to PayPal’s just-released 2nd Annual Global Report, done in conjunction with research firm Ipsos. The report surveyed 23,200 online shoppers in 29 countries about their online purchasing habits. The report shows that 25% of all online shoppers have shopped at a U.S.-based online retailer in the past year, while only 22% of American shoppers have bought from an international online site during that same period.
”The U.S. is the number one market where cross border shoppers are flocking to from around the globe. 25% of all shoppers bought from U.S.-based websites in the past twelve months,” says Melissa O’Malley, director of global merchant and cross-border trade initiatives for PayPal. “American shoppers are the most unlikely to shop overseas. 50% was the global average but only 22% of Americans have shopped cross-border. The only one that’s lower than that is Japan, and that’s 12%.”
So how can overseas merchants better attract American buyers? O’Malley says one of the keys is keeping shipping costs low, with 39% of American shoppers citing shipping cost as a key barrier to shopping from international online merchants.
“When you’re on the site, you’ve chosen an item, the number one reason for abandoning that purchase is shipping and delivery costs being too high,” she says.
American shoppers aren’t alone on that end. For the second year in a row that PayPal and Ipsos have conducted the study, the keys to earning international online business are removing shipping costs, diversifying offerings and ensuring the buying process is safe. 50% of respondents cited free shipping as a key driver to shopping on international sites while 47% want a safe way to pay and 41% say the ability to find scarce items is key. High shipping costs ranked as the most common reason online shoppers won’t buy internationally (47%).
“Shoppers want the variety that shopping online overseas affords them, but they don’t want it to cost more than if they went into a retailer to buy,” O’Malley says. “It’s a huge factor for people who are looking to shop overseas because the shipping costs can be so incredibly high. Merchants need to look at how they handle that, whether it’s decreased shipping rates or free shipping over a certain amount.”
Clothing proved to be the most popular category in cross-border shopping in six out of the seven regions surveyed. Globally, 49% of shoppers said they’ve purchased clothing, footwear and accessories from a foreign online retailer, up from 39% last year.
PayPal found that shoppers in less-developed markets are more likely to use mobile devices when shopping online internationally. Shoppers in Nigeria in particular (37.8%) transacted a higher percentage than consumers in other countries of their online spending via smartphones during the past 12 months.
“Nigeria, China and the United Arab Emirates are leading in terms of mobile savviness,” O’Malley says. “In those countries, there are people who have one device.”
Other findings from the report:
- 64% of shoppers prefer buying from large online merchants with a global presence.
- 73% would like flexibility to pay with their home country’s currency or local currency.
- 58% will shop from websites they’ve shopped from before.