How the online retail revolution offers great opportunity
The emergence of the pandemic last year created uncertainty for businesses everywhere, but the online retail sector soon discovered that with great change comes great opportunity. Online retail sales rocketed across the globe in 2020, with more transactions being made across borders.
According to a new study by PayPal, a substantial share of those cross-border sales were driven by seasonal holidays and discount-driven shopping events, with online buyers in India searching down the best prices on gifts for Diwali, Singaporeans benefiting from worldwide variety when hunting down Black Friday bargains, and people from across the globe joining China’s Singles’ Day shopping spree.
And now, with global economic engines beginning to turn once again, the behaviour of the international ecommerce consumer appears to have kicked into a higher gear — with wide-reaching impact on the online retailer.
The great pivot in global ecommerce
The number of online shoppers globally jumped with the pandemic, with the average shopper also dipping deeper into their pockets to spend more. According to PayPal’s research, total online retail sales surged in value from US$3.35tn in 2019 to US$4.28tn last year — the equivalent of adding a second United States to the global ecommerce economy.
What’s more, with more online shoppers, seismic shifts have occurred in shopping behaviour. As buyers have become more familiar with the online environment, they appear to be ever more comfortable with making transactions internationally.
PayPal’s 2021 Borderless Commerce Report — which analysed 13 key markets to understand how shifts in buying habits are shaping ecommerce across national borders — found that the overall comfort level with cross-border shopping grew by 22% across markets.
In Singapore, 78% of online shoppers purchased from overseas websites in 2020. Also increasing willing to buy internationally were Russians (with 68% shopping across borders), Brazilians (57%) and Mexicans (65%), among many other nationalities.
More purchases in each shopping cart
And the icing on the ever-growing ecommerce cake: PayPal also learned that online shoppers spent more in 2020 — across all product categories. In India, for example, more than two-thirds of shoppers spent more than before the arrival of Covid-19.
And it appears that these shifts in habits are not only here to stay, but about to accelerate. Also in India, 76% of online shoppers in PayPal’s survey said they planned to shell out even more this year and next. Sixty-eight per cent of online shoppers in China and 61% in Mexico had similar plans for 2021-22.
How the world spends on its holidays
But what has pushed online shoppers increasingly to buy beyond their national borders?
The key drivers, according to PayPal, range from the technological (increasing use of smartphones, for example) to the seasonal, with the payments specialist finding that cross-border sales soared at the times of holidays and deal-oriented shopping events.
Globally, Black Friday is just one such shopping bonanza. Also popular around the world is Singles Day (known as 11.11 in China), which accounted for US$115bn in sales last year, dwarfing the 2019 haul of US$38bn.
Chinese are avid holiday shoppers, with 93% spending during peak holiday periods. They tend to shop for culturally specific items during domestic holidays, PayPal found, and look overseas for Black Friday and Christmas.
In India, meanwhile, some 77% of online shoppers browsed outside the country’s borders when sourcing gifts for Diwali, the annual “festival of lights”.
Profit from special moments in time
Ultimately, the crucial takeaway from PayPal’s Borderless Commerce Report is that smartphone usage, adoption of online shopping, spend and future intent to spend, and confidence to buy across borders all flourished last year, and that online retailers should now seize the moment with an effective cross-border holiday sales strategy.
According to PayPal’s study, seasonal shoppers are predominantly driven to buy across borders by higher product quality, better prices than they can find at home, and the availability of new and interesting products not available in their domestic markets.
Plus, when it comes to time-sensitive holiday events — when gifts and important purchases need to arrive safely, reliably and punctually — shipping speed, responsive customer service and the quiet confidence that comes with secure financial transactions can also be deal-breakers.
PayPal: Global partner in cross-border retail
“This is where PayPal comes into the picture,” says Maria Yelutina, Marketing Director for Southeast Asia. “We function as a global ecosystem partner, providing solutions that go through the lifecycle of a merchant. Right from their early stages, we provide access to consumers around the world, help curate inventory, and even offer support with cataloguing products.”
Importantly, Yelutina adds, PayPal provides an added security layer to protect retailers from potential fraud when operating internationally. “Post-transaction, we have made returns simpler and more efficient,” she says. “Our ultimate objective behind a robust process is to ensure that merchants can focus on creating wonderful products without having to worry about the complexities involved in selling cross-border.”
This content was produced in partnership with PayPal.
