Despite a predicted fall in the amount of exporting by British businesses, PayPal UK managing director Cameron McLean believes that UK businesses should still be viewing the global market as a growth opportunity.
The online revolution has changed the way people shop around the world forever. Now more than ever, people can buy from anywhere and on any device at any time – whether browsing British fashion on a mobile on the way to work in Japan, or shopping for Chinese electronics on an iPad at home in Germany.
Cross-border trading may be nothing new – these international trade routes have existed and evolved for thousands of years – but what is new is the way technology is shaping and changing the patterns of international trade.
Technology has delivered an unprecedented ease to online shopping, and on an international scale this is fast becoming a massive opportunity for British business. In fact, recent PayPal research suggests that British businesses are already seizing the opportunity with both hands.
Thanks to the early adoption and pioneering role many UK retailers played in enabling e-commerce, as well as the variety and quality of goods we produce, the UK has become the second most popular shopping destination for five key markets across the globe: China, Germany, US, Australia and Brazil. We come second only to the US, and we’re ahead of China, the presumed leader in global exports.
By the end of 2013, demand for British goods from those five markets will reach £10.3 billion, growing to £24.4 billion in the next five years.
Interestingly, the UK’s most in-demand online cross border products are clothes, shoes and accessories, with health and beauty products and personal electronics not far behind. Customers around the world are looking abroad to save money, but also to take advantage of the huge variety that online shopping presents, including products which can’t necessarily be found locally. International shoppers are therefore after high-quality, authentic items, as well as bargain hunts.
More on exporting in the UK:
- Overcoming obstacles to exporting
- Exporting efforts bearing fruit for UK businesses
- CBI chief says exporting could give UK £20 billion boost
For UK businesses wishing to take advantage of the online export boom, addressing pain points for international customers is key. For instance, there is still concern that shopping online makes customers vulnerable to identity theft or fraud. Nearly seven out of ten shoppers surveyed say this was the main barrier to making a cross-border online payment.
Businesses need to ensure they are perceived as a trusted site to buy from online to ensure browsing converts into sales. We found eight out of ten cross-border shoppers look for a trusted payment brand such as PayPal on overseas websites. And nearly 90 per cent said that buyer protection is important or very important to them when making an overseas online purchase, with the highest response rates from shoppers in emerging markets.
Another pain point is setting up websites so UK businesses can take payment from customers from around the world using different currencies and payment methods.
Online cross border shopping is booming in Britain, and our research shows that customers from abroad are going to be looking online more often and in more ways. The new retail environment is all about better connections with customers around the world and there is plenty of opportunity for businesses large and small to get involved.
Survey methodology: commissioned by PayPal, the Nielsen Company conducted a research study to develop a greater understanding of the cross-border online shopping market and habits of consumers in six key markets around the world: the United States, the United Kingdom, Germany, Australia, mainland China and Brazil. The research was conducted online and surveyed more than 6,000 cross-border online shoppers across these six markets, aged 18 and above, from 27 May to 12 June, 2013