Five key online shopping trends driving the great global pivot in e-commerce
- While the Covid-19 pandemic has affected every facet of business operations, it has created new opportunities
- PayPal’s 2021 Borderless Commerce Report highlights the trends that will shape the future of cross-border commerce
Online retail sales grew 27.8 per cent last year to an astonishing US$4.28 trillion, according to a report published by Insider Intelligence/ eMarketer, a research firm that provides insights into digital advertising, marketing and e-commerce1.
The report suggests that trend will continue, with double-digit growth forecast this year2.
Consumer behaviour has changed for good, with a range of impacts.
“As consumers around the world grow accustomed to online shopping, there are generous new opportunities," says Tim Fu, market leader of PayPal Hong Kong, South Korea and Taiwan. "It's created the space for small businesses to start or expand their businesses to online and social platforms, meaning they can sell anywhere with ease and confidence."
Key cross-border shopping trends
In its latest Borderless Commerce Report, PayPal has identified five key trends that online retailers should pay attention to when growing their customer base.
• Changes to online shoppers’ behaviour: Driven by factors including product shortages, budget constraints and concerns about in-person shopping during pandemic lockdowns, consumers are more willing to try new brands and new ways of shopping.
• Increasing comfort with cross-border shopping: As more online shoppers grow comfortable with cross-border shopping, they have heightened expectations for value, convenience, security and overall experience.
• New payment options take centre stage: Shoppers have demonstrated a willingness to try a wider range of digital payment methods, such as Buy Now, Pay Later (BNPL) payment schemes and digital wallets.
• Greater concerns about fraud: There is growing vigilance around data privacy, online fraud and identity theft. Cross-border shoppers view security as the number one driving factor when choosing a payment method3.
• Mobile reaches a tipping point: Smartphones are becoming the primary access point for global shopping, with mobile devices set to be used in 67% of all online purchases in 20214.
Tips for merchants
Fu considers the time is now for sellers to take advantage of the global momentum in e-commerce and to pivot their businesses to growth outside their established markets. For businesses ready to take that step, he has a few tips.
“Safety and trust are the top priorities in e-commerce as consumers are often reluctant to enter their credit card details on a website they may not be familiar with," says Fu.
“A seamless shopping experience, from beginning to end, is key. Businesses should look to streamline the checkout process and they should consider integrating industry best practices, including guest checkout and one-click payment. The research suggests that each additional click results in lost sales.”
“Sellers must prioritise mobile interface design. In all of the 13 markets that we’ve surveyed, over 50 per cent of respondents shop via smartphone. So, think mobile first."
1Source: Insider Intelligence/eMarketer, Retail Ecommerce Sales Worldwide, 2019-2024, 12 December 2020. Estimates based on analysis of data from other research firms and government agencies, historical trends, reported and estimated revenues from major online retailers, consumer online buying trends, and macro-level economic conditions.
2Source: Insider Intelligence - eMarketer, Global Ecommerce Update 2021, 13 January 2021. Forecast based on an analysis of 19,840 data points from 764 sources, including third-party research, retail industry, and government research; e-commerce sales data, and relevant consumer trends.
3Source: PayPal commissioned Ipsos MORI PayPal Cross-border Insights 2021. n=13,000, 13 markets. Online survey of adults (aged 18+ who have purchased online in the past three months) between December 2020 and February 2021.
4Source: Insider Intelligence - eMarketer, Retail ECommerce Sales Worldwide, by region, 2021, December 2020. Estimates based on analysis of data from other research firms and government agencies, historical trends, reported and estimated revenues from major online retailers, consumer online buying trends, and macro-level economic conditions.