Online buying behavior currently representing over $1 trillion in sales per year and is forecasted to nearly double in the next four years according to Forrester Research data.
The report “Seizing the Cross-Border Opportunity,” find that clothing and apparel are the most popular online purchase, along with books, electronics and cosmetics.
The study, commission by FedEx, also found a significant part of ecommerce shopping globally involves cross-border shipments.
Global Cross-Border Results:
- 82% of global respondents report making an online purchase from a merchant outside their home country. These rates vary minimally across regions from a high of 90% of Canadians reporting purchasing cross-border compared to a low of 59% of Japanese. On average, these customers reported spending about $300 on cross-border items a year.
- Primary online shopping destinations are the U.S., China and the UK. While shoppers indicated purchasing cross-border from all 17 international markets included in the study, the U.S., China and the UK were the top 3 exporters of online purchases. 91% of Canadians who responded reported making their cross-border purchases from the US, with Latin American shoppers sourcing from the U.S. as well, including 68% of Brazilians who responded. Europeans have a tendency to order within the EU, although UK businesses ship primarily to the U.S. and Australia. Shoppers in Japan and Korea stated they purchase more frequently from the U.S. than they do from their APAC neighbors.
- Cross-border shoppers prefer to purchase from well-known major multi-brand retailers and global online marketplaces. In fact, the majority of respondents in every country surveyed ranked major multi-brand online retailers or marketplaces as their first choice out of five business types for cross-border purchases. The findings indicate an effective way for SME retailers to enter the global arena is through online marketplaces.
- Duties and taxes curb cross-border activity. While shipping cost and delivery time are top of mind with shoppers, over a third of global respondents cited high duties/taxes as a concern for cross-border shopping. The impact of duties and taxes was even more pronounced when researchers explored creating a standard duty free threshold. If all online purchases under $200 (localized) were duty free, 56% of global respondents would increase their cross-border shopping. Regionally, the hypothetical limit had the greatest impact on Latin American shoppers, with 80% of those respondents predicting an increase in their cross-border shopping. At the country level, 71% of respondents in India and 80% respondents in China indicated the same.
“The results of this study on global trends suggests that streamlining regulations by harmonizing duty free limits across the globe could result in a significant uptick in cross-border trade, benefitting consumers and businesses around the world,” said David Cunningham, chief operating officer & president, international, FedEx Express.
Another study done in August of 2014 offers a glimpse into American’s cross-border shopping habits, as well. Results show that 67% of U.S. respondents indicated they buy items online at least once a month and a little over 30% say they make online purchases of goods from merchants outside their country at least every few months.
Most Americans in the survey look to international SME retailers for specialty and unique items, in fact 51% of Americans vs 34% of global respondents cited it was the availability of ‘specialty/hard to find items’ as a reason for shopping cross-border.
Americans also indicated a greater interest in international cross-border shopping where the experience provided simple exchanges, guaranteed costs at check-out including duties and taxes, and free returns.