New research into the online shopping habits of consumers across the world reveals the increasing importance of e-commerce to people’s everyday lives.
FedEx and Forrester Consulting have revealed preferences of online shoppers, both globally and in the UK. In an effort to better understand global purchasing behaviour in cross-border e-commerce, researchers questioned more than 9,000 respondents in 17 countries and territories, and conducted interviews with small-and-medium businesses with cross-border operations. The UK, along with China and the US, are the top three exporters of online purchases.
With online buying behaviour currently representing more than $1 trillion in global sales per year and forecasted to nearly double in the next four years according to Forrester Research data, the findings of the paper, “Seizing The Cross-Border Opportunity” are revealing.
For more than a third (34 percent) of UK online shoppers, online purchases account for at least a quarter of their total monthly spend. Clothing and apparel are the most popular online purchase in the UK, along with books, footwear and music. The study also found a significant part of e-commerce involves cross-border shipments.
“This research provides deep insight into the priorities and preferences of global online customers and highlights how small and mid-sized retailers can better take advantage of the cross-border opportunity", said Raj Subramaniam, executive vice president, Global Marketing, FedEx. "Knowledge about both the cultural similarities and differences in geographic markets can help businesses gain real online retail advantage.”
70 percent of UK respondents indicated they buy items online at least once a month and a little over 35 percent say they make online purchases of goods from merchants outside their country at least every few months. What all this means for small and mid-size businesses is they also have an opportunity to take advantage of regional differences. UK respondents look to international SME retailers because the prices are generally lower (41 percent), or to source specialty and unique items (38 percent).
UK shoppers 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, with 45 percent saying this was very influential to their decision making.
The top ten physical items purchased online in the UK are:
Global cross border results
Primary online shopping destinations are the US, China and the UK. While shoppers indicated buying cross-border from all 17 international markets included in the study, the US, China and the UK were the top 3 exporters of online purchases.
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, 35 percent of global respondents cited high duties/taxes as a concern for cross-border shopping with the most significant numbers coming from Canada – 62 percent of Canadians believe duties and taxes are an issue – higher than any other country.
“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, International, FedEx Express.
In a world of globalized shopping, cross-border online trade seems destined to expand exponentially, benefitting small and mid-size businesses and consumers with exciting and expanding opportunities.