international ecommerce

GreetingsMelissa BlackburnSenior Manager, Sales

International E-commerceThe benefits and challenges of selling globally

Growth of E-commerce

Internet users in the world Distribution by World Regions - 2011

Source: Internet World Stats - www.internetworldstats.com/stats.htmBasis: 2,267,233,742 Internet users on December 31, 2011Copyright © 2012, Miniwatts Marketing Group

Asia - 48.8%

North America - 12.0%

Africa - 6.2%

Oceania / Australia - 1.1%

48.8%

22.1%

12.0%

10.4%

6.2%3.4%1.1%

Europe - 22.1%

Lat Am / Caribb - 10.4%

Middle East - 3.4%

The e-commerce market is poised forexplosive growth... globally

Source: Internet World Statswww.internetworldstats.com/stats.htm

Source: Goldman Sachs

North America 78.6%

67.5%

61.3% 500.7

39.5% 273.1

35.6% 235.8

26.2% 139.9

13.5% 77.0

46.0% 23.9

Oceania/Australia Asia

North America

Europe Europe

Latin America /Caribbean

Latin America /Caribbean

Middle East

Asia Africa

Africa

2010

2013

Middle East

World, Avg.

CAGR

Oceania /Australia

2011 Penetration Rate 2011 Millions of Users

e-Commerce Growth Projection in Billions of GBP

10% 10020% 20030% 30040% 40050% 50060% 60070% 70080% 80090% 900 1000

US EU Asia ROW Worldwide

£102.8 £121.0 £96.5 £34.6 £355.0

£145.9 £175.5 £200.3 £75.5 £597.1

12.4% 13.2% 27.5% 29.1% 19.4%

1016.8

What to think about?

Language Barriers

- Bob Pearson

“83% of the online population can be addressed with 10 languages”

Top 10 Languages on the Internet

Japanese

English

65.4

59.8

59.7

39.4

Portuguese

Chinese

German

Spanish

Arabic

French

Russia

Korean

All the rest

Millions of Users

50 100 150 200 250 300 350 500400 550450 600

99.1

536.6

82.5

444.9

75.2

153.3

350.6

Source: Internet World Stats - www.internetworldstats.com/stats.htmBasis: 1,966,514,816 Internet users on June 30, 2010Copyright © 2000 - 2010, Miniwatts Marketing Group

2010in Millions of Users

Currency Options

Euros 11.14%

7.18%

4.27%

3.94%

.70%

.68%

.64%

.62%

British Pounds Sterling

Canadian Dollars

Australian Dollars

Japanese Yen

South African Rand

Mexican Peso

Indian Rupee

Percent of Transactions

2% 4% 6% 8% 10% 12%

(excludes USD)

Source: 2Checkout

Preferred Payment Methods

Cards are the most popular - 69%PayPal next most popular - 40%Debit cards coming in third - 37%

Survey (19,000 consumers in 15 countries)

Source: Internet Retailer

Preferred Payment Methods by Region (Online)

80%

90%

100%

5964

56

69

63

86

2321

28

4

13

23

13 15 14

27

13126

13

29

18

1211 12 12

22

911

70%

60%

50%

40%

30%

20%

10%

Region

PercentPreferred

Global Asia Pacific Europe North America Latin America South Africa

%%

%

%%

%

% %%

%

%

%

% % %

%%

%%%

%

%

%%% % %

%

% %

Credit Card Bank Transfer PayPal Debit CardCOD - Cash on Delivery

Source: AC Nielson Global Consumer Attitudes Towards Online Purchases

Fraudulent Orders

2.5

3.0

1.1

1.31.2

1.6 1.7

1.9

2.32.5

2.01.7

2.1

2.0

1.5

1.0

.5

Per Year

£ Lossin Billions

2002 2003 2005 2007 2009 20112001 2004 2006 2008 2010

Online Revenue Loss Due to Fraud Estimated £2.1B in 2011

££

£

£ ££

££

££

£Source: CyberSource and Merchant Risk Council

Where Fraud Typically Appears

“Friendly Fraud” over the last 2 Years

Fraudulent orders continue to look like Valid orders

Increased

35%Yes

46%

Decreased

5%

Remaindedthe Same

60%No

54%

= % of merchants that claim current fraudulent orders are cleaner than those from 12 months ago

Source: CyberSource and Merchant Risk Council

Countries/Regions where Merchants have stopped shipping...

2011 Riskiest Countries1. Nigeria - 50%2. Ghana - 35%3. Malaysia - 33%4. Indonesia - 30%

5. Venezuela - 25%6. Vietnam, Russia - 23%7. Iran, South Africa - 20%8. Pakistan - 18%

9. China, Philippines, Signapore, India, Ukraine - 15%10. Egypt, Myanmar, Mexico - 13%

Africa &Middle East

65%West Africa

35%Latin &CentralAmerica

30%

Europe

38%

Asia Pacific

60%

Indonesia

30%

Malaysia

33%Venezuela

25% Ghana

35%

Nigeria

50%

In the past year, 25% of Merchants who accept international orders, stopped from at least one country due to high Fraud levels

Up from 20% in 2010

Stopped

25%

Continue

75%

Percent of Orders Rejected for Fraud

7.3%Outside your border

Increase in Fraud orders outside your border

Source: CyberSource and Merchant Risk Council

2.8%

Impact of Fraud

Real Cost = Fraud Prevention Expenditures

What are you spending?Measure how many orders are:

Flagged for review?Rejected for fraud?Accepted that turn out to be fraudulent?

---

Most Effective Fraud Tools

Customer order history

IP geolocation

Negative lists (in-house lists)

Fraud model (in-house)

Device fingerprint results

Address Verification Service

Paid-for public records services

CVN (Card Verification Number)

Order velocity monitoring

Contact customer to verify order

Multi-merchant Fraud Model

Payer Auth / 3D Secure

Credit history check

Shared negative lists - shared hotlists

Percent of Merchants

5% 10% 15% 20% 25% 30% 35% 50%40% 45%

Merchants Most Effective Tools

27%26%

25%

18%24%

15%

37%

46%

33%

39%

29%

38%

24%

17%

Source: CyberSource and Merchant Risk Council

Our Recommendation

Threshold for Loss

Outsource

Fraud ModelNegative & Positive ListsDevice Finger printingIP Geo Location

---

Choose your Overseas Markets

SRSR

International traffic & order originationCultural & language differencesEconomic & political policies Tariffs or trade barriers

Pinpoint the best country or region----

Research with Social Media

Facebook users Distribution by Countries

Source: www.checkfacebook.com

US - 34%

India - 10%

Mexico - 7%

Philippines - 6%

Turkey - 7%

Germany - 5%

34%

10%10%

9%

7%

7%

7%

6%5%

5%

Brazil - 10%

Indonesia - 9%

UK - 7%

France - 5%

LinkedIn

Facebook

Groups by region

Buy credits by country

Forums

Wall posts

Connect with e-commerce partners

We’re here to help, cheers!

Stand #822

mblackburn@2co.com

salesteam@2co.com+44 (0)808 234 0487

2Checkout

Melissa Blackburn

Stand

#822

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