One of the latest and most important trends is the cross-border trading phenomenon, where consumers in one country purchase goods from nations or territories across the globe. This is a stark contrast to a decade ago when many retailers would not take credit cards with foreign addresses because payment systems did not allow for satisfactory fraud and credit card protection, not to mention the customs, duties and delivery issues that come with fulfilling foreign orders.
But as the consumer has become more global, payment solutions and retailers have aligned their efforts that appeal to all.
Who are the Cross-Border Shoppers?
There are people who shop domestically, cross-border and domestically, and cross-border only. But in some countries, the amount of shopping that’s done cross-border is really quite significant. Cross-border shopping is really going to start to grow as an emerging market, it is said.
China has a thriving domestic market, whereas Cross-border shopping is not very prevalent in China and in many other countries right now. That is just simply because of the policies in those countries. However, China may soon become a bigger market for international trade. A large number of Chinese online consumers said they plan to begin shopping cross-border or increase their cross-border shopping in the next 12 months.
But when you look at some of the opportunities that are now opening with foreign merchants being able to sell in some of those markets that are going to really change the dynamic.
What attracts Cross – Border Shopping?
Multiple product availability is the factor the United States is the preferred shopping destination, according to some reports. Other factors include, looking for a better value, or looking for unique products. The U.S. and China are really leading the charge in terms of shopping destinations for people across the globe. What people are buying once they do decide to look at a foreign website is really clothing, footwear and accessories that are the most popular followed by consumer electronics.
Free Shipping is the Key to Cross – Border Shopping
Shipping cost is of paramount importance to cross-border shoppers. More than half of those who have shopped cross-borders in the past 12 months say that delivery costs prevent them from making purchases from another country more often.
Advancements in technology are helping to open up commerce opportunities for everyone – across borders, anywhere, anytime and via any device, what we call this – The People Economy. And PayPal is leading this movement by making it easier, more secure and more intuitive for people to pay – wherever and whenever they want.
When cross-border shoppers choose how they want to pay, the top three factors are the safest way to pay, purchase protection and a more convenient way to pay. And things like loyalty points are actually quite low on the list.
According to some recent report Cross – border shopping trade represents a driving force, of the global marketplace, with cross-border shoppers spending approximately twice as much as consumers who only shop domestically. The finding is based on a research study on the online and cross-border shopping habits of more than 17,500 consumers in 22 countries.
U.S. and Chinese goods are the most popular overall, representing 26 and 18 percent of all online cross-border purchases, according to the study. Shoppers from North America, Latin America and the Middle East prefer American goods, while Western European cross-border shopping is dominated by German merchandise; central and eastern European consumers most often purchase from China.
United States has the minimum cross-border shoppers, largely because U.S. consumers buy from U.S. retailers, who often offer free shipping and returns and meet consumers’ product availability desire.