Consumers have become so familiar with online shopping that they are increasingly turning to foreign e-commerce sites to satisfy their needs. Almost 70% of consumers worldwide claim to have shopped on foreign websites in the past year. Although cross-border shopping is on the rise across the world, we have still been able to identify a number of noteworthy regional differences.

E-commerce in Europe mired in complexity
Europe may be among the frontrunners in online shopping but cross-border e-commerce still presents a challenge. Europe remains a patchwork of national online markets in which cross-border transactions are complex. European consumers don’t benefit from the advantages that a single market offers in terms of price and choice. These limitations are in turn reflected in cross-border consumer behavior. According to recent figures from the European Commission, only 15% of European consumers bought products from foreign sites in 2014. A unified e-commerce market in which consumers have access to a broader range of European products and services could save European consumers as much as 11.7 billion euro a year.

For online retailers, the cost of offering products and services across borders remains high. According to figures from the European Commission, small-scale e-tailers already pay 9,000 euro extra to meet the legal and regulatory requirements of selling to an additional European Union (E.U.) country. Add another 5,000 euro for every further country in which the e-tailer has to satisfy VAT regulations.

Elsewhere in the world
Israelis are by far the biggest globetrotters in terms of their online shopping behavior. A whopping 90% of Israeli consumers claim to have bought from international retailers. Singapore and Hong Kong also have a large share of online shoppers who buy from foreign sites. In the U.S., consumers are more reserved with respect to foreign e-commerce sites. It’s worth noting that young Americans shop twice as often on foreign sites than the over 45s. From a global perspective, it turns out that unsatisfactory speed and ease of use are the main factors holding consumers back from using foreign e-commerce sites more often. These factors are a particular deterrent in China, India and Hong Kong. In Germany and the Netherlands, almost 60% of consumers say they would buy from foreign sites more often if the process were faster and simpler.

Preferences for delivery also vary among e-shoppers from country to country and from region to region. Delivery to the customer’s home or place of work is still preferred, but a number of other options are gaining in popularity. In the U.K., two in three consumers have picked up online orders from a collection point, while in France delivery to local stores has proved popular. German e-shoppers are becoming more and more accustomed to collecting their parcels from automated parcel collection lockers. In the U.S. and Canada, this “click & collect” approach is proving slower to catch on. Numerous pilot projects are underway, but it remains to be seen whether consumers will flock to this model. In Asia, too, the number of retailers offering collection points is rising sharply. It is expected that the more retail infrastructure is developed, the more ground this trend will gain.

Mobile and social on the rise
Those seeking to reach Chinese or Indian e-shoppers should focus efforts on mobile shopping. While 40% of online shoppers worldwide make a quarter of their purchases via their smartphones, in China this figure is as high as 80%. India comes in second with 65%. In Europe, the number of consumers that shop via their mobile devices is a great deal lower. In the Netherlands and Germany, a little over 20% had the intention to do so in 2015, while in the U.K. this share was a little higher at around 30%. The view that mobile shopping is not as quick and easy as simply shopping online seems to be what is limiting a faster adoption of mobile shopping.

Finally, the impact of social media on the purchasing behavior of online consumers is also growing. According to recent research by PwC, more than half of respondents said that Facebook played a role in their online purchasing behavior. However, regional differences were again significant. While in China social media is almost an inherent part of online shopping, the opposite is true in Europe. The great majority of respondents in France, Switzerland, Germany and the U.K. say they are hardly influenced by what they read on social media, if at all.

The bar is high
The potential for cross-border e-commerce is huge. The increasing maturity of online purchasing behavior is leading to an increase in the ability of many foreign e-shops to draw in consumers. E-tailers seeking to benefit from the potential of cross-border e-commerce should ensure they are well prepared and respond to regional preferences from the very beginning. After all, one thing is certain: consumers expect faultless service and customer experience, regardless of their geographical location, whether they are in a bricks-and-mortar store or shopping online via their PC or mobile device.

 

Sources:
Dyn – 2015 Report: Global Consumer Online Shopping Expectations
Global PwC 2015 Total Retail Survey
European Commission – The Digital Single Market

 

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