PayPal and
IPSOS have released the Global Cross Border Consumer Research 2015. The
research maps the evolution of cross border online commerce to identify why
consumers shop online across borders and how do they pay for these
transactions. The research also shares insights on the growth prospects for the
Indian ecommerce sectors in 2017.
Key
Highlights of the report:
· Leading categories for which Indians shop online
across the border include clothing/apparel, footwear, accessories (bought by
53% of cross border shoppers ), consumer electronics (51%) and digital
entertainment and, education items (44%).
· Top three countries where Indians shop: USA (27% of
online shoppers have shopped in USA in past 12 months) , China (11%) and United
Kingdom (10%)
· Key drivers making online shoppers more likely to
shop cross border include Free shipping (selected by 54% of online shoppers),
safe way to pay (54%), proof of product authenticity (51%) , possibility of
payments in local currency (48%) along with faster delivery (47%)
· Top 3 Countries for cross-border P2P transactions:
USA (54% of those who have sent money to friends and families to another
country said they sent money to USA), UK (22%) and Singapore (15%)
By
2017 mobile spend (including smartphones and tablets) for all online shopping
within India and cross border is predicted to reach Rs.3,18,600 crore
by 2017 from the current estimated Rs.1,26,500 crore in 2015
The
research evaluates the online and cross-border shopping habits of over 23,000
internet users across 29 countries including 808 interviews in India.
“Cross
border spends by Indians is estimated to grow at 78.5% from 2015 to 2016.
PayPal is used as a cross-border payment option by 84% of the cross border
shoppers. PayPal’s unique offerings like Buyer Protection and Refunded Returns
have helped address some of the barriers like safety and security and return
shipping faced by shoppers while transacting cross border, said Vikram
Narayan, Country Manager and Managing Director, PayPal India.
He further
added, “The Indian e-commerce space is experiencing an exciting time where
innovation is the key. Our research reveals that the advent of technology is
slowly diminishing borders for online shopping. With the number of online
shoppers set to grow exponentially, it will lead to increase in the numbers
shoppers who shop from global retailers with online presence.”
The
research further highlights that desktops account for the highest
proportion (53%) of purchases made by cross border shoppers from websites in
another country in the last 12 months, however the future belongs to mobile for
cross border shopping: 41% of the purchases made by cross border
shoppers from websites in another country in the last 12 months were made using
a smartphone (30%) or tablet (11%).
Although
cross border trade is forecasted to grow in India by 78.5% from 2015 to 2016,
high customs duty and high delivery shipping costs are key deterrents: 52% of
online shoppers who have not shopped cross border state delivery shipping costs
as preventing them from shopping cross-border, and 43% say having to pay
customs/fees and or taxes is a barrier. Other key barriers also include
difficult process for returning products (selected by 48% of online shoppers
who don’t shop cross-border), having to make payments in foreign currency
(44%), return shipping costs (41%) and concerns about identity theft and fraud
(41%).
‘Cart
abandonment’ is also a key issue on cross border shopping, where consumers
abandon their online shopping carts after having chosen their products for
purchase. Reasons for cart abandonment –include amongst others preferred
payment option not available (selected by 30% of online shoppers who have
abandoned an online purchase from a website in another country) , lack of
clarity about how much duty, tax, or custom fees would have to be paid (27% )
and concerns about website security (25%) .
PayPal has
emerged as the most popular payment method for making cross-border transactions
by the Indian cross-border shoppers, with 84% of cross border shoppers claiming
to have used Paypal for a cross border purchase in the past 12 months followed
by Visa Debit (used by 58%) and Visa credit card (42%). Cross border shoppers
who prefer to use PayPal as a cross border payment method select quick
processing of payment (selected by 56%), safer way to pay (54%) and well
known/trusted brand (50%) as reasons for preferring to use PayPal.
Online
spends on the rise
The
research estimates overall online spends inclusive of cross border shopping to
touch Rs.7,02,900 crore by 2017
Consumer
electronics and entertainment are estimated to be the highest growth categories
for online spends in 2016
Total
online spend in the consumer electronics category is forecast to grow 48% by
2016 while the total online spend in groceries, food and alcohol category is
forecast to grow by 43% in 2016. Health & Beauty (41% growth predicted) as
well as travel & transport (40% growth predicted) are also expected to be
high growth categories for overall online sales,
Average
online spends among Indians
Average
spend on cross-border transactions by the estimated 3.8 million cross border shoppers
was estimated to be ~Rs.1.42 lakh per cross-border shopper in 2015.
More on
Global Cross Border Consumer Research 2015 by PayPal and IPSOS
In
addition to these India findings, more focused data is available for all 29
countries included in the research in addition to the global data.
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