1. shopping

CONFIDENTIAL
PayPal Cross-Border
Research 2014
GLOBAL SNAPSHOT
PayPal Project Sponsor: Melissa O’Malley
PayPal Market Research Contact: Daniel Jenkinson
Ipsos MORI Contacts: Eleanor Pettit & Peter Attwell
© 2014 PayPal Inc. All rights reserved. Confidential and proprietary.
Research Methodology
This study was conducted across 22 markets and 17,500+ consumers globally.
Fieldwork
Sample, per market
Global Fieldwork
conducted Sept-Oct
2014
Online
survey
20 minute
questionnaire
This research
was carried out
to
the international
quality standard
for market
research, ISO
20252:2012
22 markets
Sample of c.800
per market.
Nationally
representative of
online population
Aged 18+
Respondents
recruited from
online panels
Own and/or use an
Internet-enabled
device*
Data weighted to adjust for
known population incidence and
demographic profile
Questionnaire
Screening
Transaction & Spend:
Past 12 Months &
Next 12 Months
© 2014 PayPal Inc. All rights reserved. Confidential and proprietary.
E-commerce
Behaviour and
Attitudes
Cross-Border
Commerce
Mobile
Commerce
*Desktop computer/Laptop/ notebook computer/Tablet /Smartphone/Some other type of mobile phone/Electronic
organizer / PDA with wireless voice and data features/Games console with Internet connectivity (e.g. Wii)
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GLOBAL SNAPSHOT
UK, France, Germany, Austria, Switzerland, Italy, Spain, Netherlands,
Sweden, Norway, Denmark, Poland, Turkey, Russia, Israel, UAE, USA,
Canada, Brazil, Mexico, China, Australia
© 2014 PayPal Inc. All rights reserved. Confidential and proprietary.
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Summary of findings: Cross border (CB) global study
1.
Market penetration: CB is a driving force in the global marketplace with ~50% online shoppers saying they buy
from other countries around the world (country average, not weighted for market size).
2. Market opportunity: Growth of online CB expected, especially from emerging markets.
3. CB hotspots: Western Europe (esp. UK, DE), North America (esp. US) and APAC (esp.CN) are the three key CB
destinations (i.e. most CB consumers buy from these three regions). Significant intra-EU trade is evident.
4. What’s bought: Clothing/footwear/accessories and consumer electronics (incl tablets, mobiles, peripherals) are the
most sought after CB categories.
5. CB shoppers are valuable consumers: their total online spend (domestic and CB) is around 2x that of domestic
only shoppers. They also get the benefits of online shopping.
6. CB shoppers are more mobile oriented than domestic only shoppers.
7. Top pain points: delivery shipping costs, duties/taxes/fees and concern about not receiving item.
8. Top drivers: free shipping, having a safe way to pay, access to items, lower cost of items, free return shipping.
9. Free return shipping is considered a ‘must-have’ by around half of shoppers, a similar proportion to free
shipping.
10. PayPal is a dominant payment method for cross border: In a majority of markets, PayPal has a relatively high
penetration of usage for CB purchases compared to other payment methods. This also correlates with markets
where eBay is strong domestically or has a good share of CB.
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Cross border commerce is a driving force in today’s
global marketplace
A significant proportion of online shoppers claim to make cross border purchases, and almost all cross border shoppers
also shop domestically.
Self-stated domestic and cross border purchasing in past 12 months
Domestic only
Cross border and domestic
Cross border only
%
17
18
25
26
27
29
38 37
38
38
40
42
43
50
50
56
58 60
64
64
69
74
56%
Multi-
66
country
average*
for CB
38
28
2
US
8
4
CA
UK
North
America
37
3
DE
43
57
62
56
77
63
51
72
53
40
61
49
52
31
31
55
46
7
6
7
4
8
5
6
9
9
5
6
10
6
11
4
7
FR
IT
ES
NL
CH
AT
SE
NO
DK
PL
RU
IL
TR
UA
BR
MX
Western
Europe
* Multi-country average not weighted by market size
Nordics
Central,
Eastern
Europe
Middle
East
Latin
America
15
AU
23
3
CN
Asia
Pacific
© 2014 PayPal Inc. All rights reserved. Confidential and proprietary. Base: Online shoppers. N=12,349. Q. Thinking about shopping online, from which of the following country or geographies’
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websites have you purchased in the past 12 months? Please include your home country if applicable.
Expect continued cross border growth and penetration,
especially from ‘emerging’ markets
Consumers are generally positive about shopping cross border more often.
CBT shopping intent
Will shop CB more often
RU TR BR CN
Will start shopping CB
10% online adults to start shopping cross border*
25% online adults to shop cross border more often*
39
34
%
27
15
16
18
17
19
4
4
3
5
7
US
CA
UK
DE
FR
North
America
27
26
15
14
IT
18
16
8
4
4
5
ES
NL
CH
AT
Western
Europe
* Multi-country average not weighted by market size
© 2014 PayPal Inc. All rights reserved. Confidential and proprietary.
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5
SE
NO
DK
Nordics
35
24
17
6
32
39
28
7
26
33
13
PL
20
20
6
RU
Central,
Eastern
Europe
IL
TR
Middle
East
15
18
UA
BR
20
17
6
MX
Latin
America
AU
CN
Asia
Pacific
Base: Online adults. N=12,878. Q36f. In the next 12 months, how do you think your online shopping habits will
change, if at all, in terms of how often you purchase from online stores in your country or from another country?
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US and China are most popular cross border destinations. W.
Europe a key region.
Popular online destinations for
cross border shoppers*
%
USA
What are the popular online destinations for cross border shoppers within a particular
region (including intra-region international purchasing)?
26
China
18
UK / GB
17
Germany
16
Hong Kong
8
France
5
Japan
4
Canada
3
Singapore
3
Spain
3
Italy
3
Note on interpretation:
figures are % of global*
online shoppers buying
internationally from these
countries
W. Europe
Germany 28%
USA 18%
UK 17%
China 13%
North America
USA 32%
China 15%
UK 10%
Note on interpretation: North
American shoppers buy
from these countries
Nordics
USA 31%
UK 30%
Germany 19%
China 15%
CEE
China 24%
USA 16%
Germany 13%
UK 11%
ME
USA 36%
China 29%
UK 17%
Hong Kong 11%
APAC
USA 31%
UK 20%
Hong Kong 17%
China 15%
LATAM
USA 39%
China 26%
*22 country average (not weighted by market size)
Region definition (countries surveyed): Western Europe: UK, Germany, Austria, Switzerland, France, Italy, Spain, Netherlands; Central and Eastern Europe: Poland, Russia; Nordics:
Denmark, Sweden, Norway; North America: USA, Canada; Latin America: Mexico, Brazil; Middle East: Turkey, Israel, UAE; Asia Pacific China, Australia
Base: Online shoppers. N=12,349. Note: China and HK asked separately. Includes intra-region purchasing. Q.
© 2014 PayPal Inc. All rights reserved. Confidential and proprietary. Thinking about shopping online, from which of the following country or geographies’ websites have you purchased in
the past 12 months? Please include your home country if applicable.
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Clothing, footwear and accessories and consumer electronics
are top cross border categories purchased
Top 10 CB categories purchased* (%)
Clothing/apparel, footwear and
accessories
Nordics
Clothing/footwear 36%
Travel/transport 21%
Entertainment/ (phys) 21%
Consumer electr. 21%
Toys & hobbies 17%
39
Consumer electronics,
26
Toys and hobbies
20
Travel and transportation
20
Entertainment/education
(physical items)
20
Cosmetics/beauty products
18
Jewellery/watches
Entertainment/education
(digital)
Top CB categories purchased by region
North America
Clothing/footwear 33%
Entertainment/ (phys) 24%
Travel/transport 17%
Toys/hobbies 17%
Consumer electr. 16%
17
16
Sports/outdoors
12
Household appliances,
household goods and furniture
11
i.e. people in NA like
to buy ‘xyz’ from other
countries
W. Europe
Clothing/footwear 33%
Consumer electr. 24%
Entertainment/ (phys) 21%
Travel/transport 20%
Toys/hobbies 17%
CEE
Clothing/footwear 50%
Consumer electr. 35%
Toys/hobbies 30%
Cosmetics/beauty products 24%
ME
Clothing/footwear 47%
Consumer electr. 34%
Travel/transport 28%
Toys/hobbies 27%
LATAM
Clothing/footwear 47%
Consumer electr. 38%
Toys/hobbies 24%
Entertainment/ (digital) 23%
Cosmetics/beauty products 22%
APAC
Clothing/footwear 43%
Cosmetics/beauty products 26%
Consumer electr. 25%
Entertainment/ (phys) 23%
Jewelry/watches22%
*22 country average (not weighted by market size)
Region definition (countries surveyed): Western Europe: UK, Germany, Austria, Switzerland, France, Italy, Spain, Netherlands; Central and Eastern Europe: Poland, Russia; Nordics:
Denmark, Sweden, Norway; North America: USA, Canada; Latin America: Mexico, Brazil; Middle East: Turkey, Israel, UAE; Asia Pacific China, Australia
Base: Online cross border shoppers. N=6,899. Q. In the past 12 months, what kinds of products
© 2014 PayPal Inc. All rights reserved. Confidential and proprietary.
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have you purchased from websites from other countries? Please select all that apply.
Cross border shoppers are valuable consumers
They spend more online, see the benefits of shopping online and are more mobile oriented.
Online spend
Online shopping attitudes
Domestic Only
Shoppers
% Somewhat/Strongly Agree
78
87
76
86
72
84
73
83
74
83
69
77
61
68
Enables me to shop anytime,
anywhere
2x
…the
Helps me locate info. about retail
stores (e.g. opening hours, locations)
I like that I can make purchases from
the comfort of my home
amount that cross-
border shoppers
spend online vs
Gives me more product choice
Helps me research and choose items I
plan to purchase in store
domestic only
Gives me back time
shoppers**
Makes my life easier around the
holiday season
* * self-stated. N=5448 domestic;
n=3936 cross border* shoppers
Enhances my experience of shopping
in store
43
52
N=5448 domestic; n=3936 cross border* shoppers
© 2014 PayPal Inc. All rights reserved. Confidential and proprietary.
Cross-Border
Shoppers*
Share of online spend on mobile
(self-stated)
Domestic Only
Shoppers
4%
9%
5%
13%
87% 82%
Cross-Border
Shoppers*
7%
10%
8%
16%
83% 76%
CB shoppers
expect +6ppt
share of spend
from mobile vs
domestic only
shoppers
Tablet
Smartphone
Past 12 Next 12
Months Months
Past 12 Next 12
Months Months
Desktop /
Laptop /
Notebook
N=5448 domestic; n=3936 cross border* shoppers
Multi-country average. * Those who spend >10% of their online expenditure cross-border
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However, CB shoppers still face hurdles…
Top pain points are delivery shipping costs, duties/taxes and concern about not receiving the item.
Barriers to Cross-Border Shopping
Top 10 barriers
Delivery shipping costs
Concern about customs duties/fees /taxes
Concern that I may not receive the item
Concern item would not be as described
Delivery time not fast enough
Difficult process for returning products
Concerns about counterfeit goods
May not receive sufficient help if problems
Return shipping costs
Concern about identity theft / fraud
Other barriers
51
45
45
40
43
42
41
37
40
34
39
38
38
38
38
39
38
36
35
39
© 2014 PayPal Inc. All rights reserved. Confidential and proprietary.
Lack of buyer protection or insurance in
case of problems
Concern about security of my financial or
personal details
Preferred payment method not always
offered
Unsure of the return policy for shipments
% of those
who shop
cross-border
Currency conversion rate not favourable
Lack of tracking and notification
% of those
who do not
shop crossborder
Different language of websites, product
descriptions and customer support
Payment is in foreign currency
35
36
33
36
33
30
30
33
28
28
28
27
26
31
24
30
Base: N=5448 domestic; n=6899 cross border shoppers. Multi-country average. Q. Which of the following
reasons prevent you from making purchases from websites from another country? /[ …more often]?
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There are ways to drive cross border online shopping
Key drivers are free shipping, safe way to pay, access to items, low cost, free return shipping.
Drivers for Cross-Border Shopping (%)
Other drivers
Top 10 drivers
45
Safe way to pay
29
Favorable returns policy
47
Free shipping
Favorable buyer protection
27
Faster delivery
26
Can find items which are hard-to-find locally
39
Lower transaction fees
26
Lower overall cost to buy items from
another country
38
Offers my preferred way to pay
26
Shipping costs, if any, shown before checkout
25
Coupons/promotions/discounts
24
Offer delivery tracking/notifications
23
37
Free return shipping
Customer support in my language
33
Website available in my language or
translation available
31
Lower shipping costs
31
Costs shown/payment possible in your
local currency
30
Proof of product authenticity
29
Wider product selection
22
Visible, trusted payment logo
21
Favorable currency conversion rate
21
If I needed to send a gift to someone living in that country
Flexible delivery dates
15
13
Q. Which, if any, of the following would make you more likely to buy from a website from another country?
© 2014 PayPal Inc. All rights reserved. Confidential and proprietary.
Base: Online shoppers. N=12,349. Multi-country average. Q. Which, if any, of the following
would make you more likely to buy from a website from another country?
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Free return shipping is a ‘must have’
PayPal’s initiatives are well-aligned with cross border
shopper needs
Importance of Shipping Options when
Shopping Domestically or Cross-Border
For domestic shopping
52
Free shipping / free delivery
For cross-border shopping
For domestic shopping
Express delivery
For cross-border shopping
For domestic shopping
Flexible delivery times
For cross-border shopping
For domestic shopping
Free shipping / postage for returns
For cross-border shopping
36
46
35
34
41
27
% Nice to Have
39
34
% Must Have
39
28
38
57
51
30
30
Base: Online adults. N=17519. Multi-country average. Q. Listed below are some options for delivery/returns that could be offered by online retailers. For each option, please indicate how
important it would be to you for an online retailer to offer this if you were considering making a purchase from them. Please think about both domestic websites (retailers based in your
country) and websites from another country, and select one answer for each option.
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PayPal usage for CB ahead of competition in majority
of markets
PayPal usage correlates with markets where eBay provides a good foundation.
PayPal
74
65
Payment method used for cross-border
purchases (%)
Main competitor
80
74
86
74
69
67
65
55
%
39
45
43
37
36
5152 52
49
44
41
59
53
58
54
64
CA
North
America
UK
DE
73
66
57
61
62
62
60
53
50
41
41
46
34 35
28
22
US
83
77
FR
IT
ES
Western
Europe
NL
CH
AT
SE
NO
Nordics
DK
PL
RU
Central,
Eastern
Europe
IL
TR
Middle
East
UA
BR
MX
Latin
America
© 2014 PayPal Inc. All rights reserved. Confidential and proprietary. Base: Online cross border shoppers. Q. Which payment cards / methods have you used for
online transactions / purchases from websites from another country in the past 12 months?
AU
CN
Asia
Pacific
13
Safety, protection, convenience key to cross border
payment method preference
Reasons for cross border payment method preference (%)
Safer way to pay
54
Purchase protection
49
More convenient way to pay
44
Payment is processed quickly
31
Accepted by most retailers
28
Don’t have to share my personal / financial details with seller
28
Well-known, trusted brand
24
Faster checkout
24
Not charged commission/transaction fee on overseas purchases
13
Habit
11
Better currency conversion rate
11
Receive rewards/cashback
10
Base: Cross border shoppers who have used more than one payment method in the past. N=4,670. Multi country average. Q. For what reasons is this your preferred payment method
for online transactions/purchases from websites from another country?
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