Transcript Presentation Title
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
Online survey Global Fieldwork conducted Sept-Oct 2014 This research was carried out to the international quality standard for market research, ISO 20252:2012 20 minute questionnaire
Questionnaire
Screening Transaction & Spend: Past 12 Months & Next 12 Months
Sample, per market
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 E-commerce Behaviour and Attitudes Cross-Border Commerce Mobile Commerce © 2014 PayPal Inc. All rights reserved. Confidential and proprietary.
*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) 2
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
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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).
Market opportunity
: Growth of online CB expected, especially from emerging markets.
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.
What’s bought
: Clothing/footwear/accessories and consumer electronics (incl tablets, mobiles, peripherals) are the most sought after CB categories.
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.
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CB shoppers are more mobile oriented
than domestic only shoppers.
Top pain points:
delivery shipping costs, duties/taxes/fees and concern about not receiving item.
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Top drivers
: free shipping, having a safe way to pay, access to items, lower cost of items, free return shipping.
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. © 2014 PayPal Inc. All rights reserved. Confidential and proprietary.
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Cross border commerce is a driving force in today’s
56%
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 26 29 27 25 38 37 43 38 42 40 38 69 58 60 50 56 64 64 50 74 72 Multi 66 62 77 63 61 country 43 57 56 51 53 52 49 55 average* for CB 28 38 37 40 31 31 46 15 23 2 US 8 CA 4 UK 3 DE 7 FR 6 IT 7 ES 4 NL 8 CH 5 AT 6 SE 9 NO 9 DK 5 PL 6 RU 10 IL 6 TR 11 UA 4 BR 7 MX AU 3 CN
North America Western Europe
* Multi-country average not weighted by market size © 2014 PayPal Inc. All rights reserved. Confidential and proprietary.
Nordics Central, Eastern Europe Middle East Latin America Asia Pacific
Base: Online shoppers. N=12,349. 5 websites have you purchased in the past 12 months? Please include your home country if applicable.
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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 Will start shopping CB RU TR BR CN 10% online adults to start shopping cross border* 25% online adults to shop cross border more often* 39 34 26 33 35 32 27 27 39 26 28 15 4 US 16 4 CA 18 3 UK 17 5 DE 19 7 FR 14 IT 8 ES 15 4 NL 18 4 CH 16 5 AT 22 6 SE 7 NO 17 5 DK 13 PL 20 RU 6 IL 20 TR 15 UA 18 BR 24 20 MX 6 AU 17 CN
North Western America Europe
* Multi-country average not weighted by market size © 2014 PayPal Inc. All rights reserved. Confidential and proprietary.
Nordics Central, Eastern Europe Middle East Latin America 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 What are the popular online destinations for cross border shoppers within a particular region (including intra-region international purchasing)?
cross border shoppers* USA 26 China UK / GB Germany Hong Kong France Japan Canada 5 4 3 8 18 17 16
Note on interpretation: figures are % of global* online shoppers buying internationally from these countries 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%
Singapore Spain 3 3
North America
USA 32% China 15% UK 10%
LATAM
USA 39% China 26%
W. Europe
Germany 28% USA 18% UK 17% China 13%
APAC
USA 31% UK 20% Hong Kong 17% China 15%
Italy 3 *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 © 2014 PayPal Inc. All rights reserved. Confidential and proprietary.
Base: Online shoppers. N=12,349. Note: China and HK asked separately. Includes intra-region purchasing. Q. 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* (%) Top CB categories purchased by region Clothing/apparel, footwear and accessories Consumer electronics, Toys and hobbies Travel and transportation Entertainment/education (physical items) Cosmetics/beauty products Jewellery/watches Entertainment/education (digital) Sports/outdoors Household appliances, household goods and furniture 12 11 16 20 20 20 18 17 26 39
Nordics
Clothing/footwear 36% Travel/transport 21% Entertainment/ (phys) 21% Consumer electr. 21% Toys & hobbies 17%
North America
Clothing/footwear 33% Entertainment/ (phys) 24% Travel/transport 17% Toys/hobbies 17% Consumer electr. 16% 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%
LATAM
Clothing/footwear 47% Consumer electr. 38% Toys/hobbies 24% Entertainment/ (digital) 23% Consumer electr. 34% Travel/transport 28% Toys/hobbies 27% 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 © 2014 PayPal Inc. All rights reserved. Confidential and proprietary.
Base: Online cross border shoppers. N=6,899. Q. In the past 12 months, what kinds of products have you purchased from websites from other countries? Please select all that apply.
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Cross border shoppers are valuable consumers
They spend more online, see the benefits of shopping online and are more mobile oriented.
Online spend 2x
…the amount that cross border shoppers spend online vs domestic only shoppers** * * self-stated. N=5448 domestic; n=3936 cross border* shoppers
Online shopping attitudes
% Somewhat/Strongly Agree Domestic Only Shoppers Cross-Border Shoppers*
Share of online spend on mobile (self-stated)
Enables me to shop anytime, anywhere 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 Gives me more product choice Helps me research and choose items I plan to purchase in store Gives me back time Makes my life easier around the holiday season Enhances my experience of shopping in store 78 76 87 86 72 84 73 83 74 83 69 77 43 52 61 68
Domestic Only Shoppers 4% 9% 5% 13% 87% 82%
Past 12 Months Next 12 Months
Cross-Border Shoppers* 7% 10% 8% 16% 83% 76%
Past 12 Months Next 12 Months
CB shoppers expect +6ppt share of spend from mobile vs domestic only shoppers
Tablet Smartphone Desktop / Laptop / Notebook N=5448 domestic; n=3936 cross border* shoppers N=5448 domestic; n=3936 cross border* shoppers © 2014 PayPal Inc. All rights reserved. Confidential and proprietary.
Multi-country average. * Those who spend >10% of their online expenditure cross-border 9
However, CB shoppers still face hurdles…
Top pain points are delivery shipping costs, duties/taxes and concern about not receiving the item.
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 40 34 39 38 38 38 38 39 51 45 45 40 43 42 41 37 38 36 35 39
Barriers to Cross-Border Shopping
% of those who shop cross-border % of those who do not shop cross border
Other barriers
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 Currency conversion rate not favourable Lack of tracking and notification Different language of websites, product descriptions and customer support Payment is in foreign currency 30 33 28 28 28 27 35 36 33 36 33 30 26 31 24 30 © 2014 PayPal Inc. All rights reserved. Confidential and proprietary.
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]? 10
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.
Top 10 drivers
Free shipping Safe way to pay Can find items which are hard-to-find locally Lower overall cost to buy items from another country Free return shipping Customer support in my language Website available in my language or translation available Lower shipping costs Costs shown/payment possible in your local currency Proof of product authenticity
Drivers for Cross-Border Shopping (%) Other drivers
Favorable returns policy
47
Favorable buyer protection
45
Faster delivery
39
Lower transaction fees
33 38 37
Offers my preferred way to pay Shipping costs, if any, shown before checkout Coupons/promotions/discounts Offer delivery tracking/notifications
31 31 30 29
Wider product selection Visible, trusted payment logo Favorable currency conversion rate If I needed to send a gift to someone living in that country Flexible delivery dates
15 13 25 24 23 22 21 21 29 27 26 26 26
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 Free shipping / free delivery
For domestic shopping For cross-border shopping 52 46 35 36
Express delivery
For domestic shopping For cross-border shopping 27 34 39 41 % Nice to Have % Must Have
Flexible delivery times
For domestic shopping For cross-border shopping 34 28 38 39
Free shipping / postage for returns
For domestic shopping For cross-border shopping 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.
© 2014 PayPal Inc. All rights reserved. Confidential and proprietary.
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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 Main competitor
Payment method used for cross-border purchases (%)
86 80 83 74 74 69 74 77 73 65 39 65 45 37 67 43 36 55 49 44 51 52 52 41 59 53 58 54 64 41 50 61 28 66 57 41 62 46 60 53 34 22 35 62 US CA UK DE FR IT ES NL CH AT SE NO DK PL RU IL TR UA BR MX AU CN
North America Western Europe
© 2014 PayPal Inc. All rights reserved. Confidential and proprietary.
Nordics Central, Eastern Middle East Latin America Europe
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?
Asia Pacific
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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?
© 2014 PayPal Inc. All rights reserved. Confidential and proprietary.
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