global insights and guidance to selling internationaly with paypal
TRANSCRIPT
© 2014 PayPal Inc. All rights reserved. Confidential and proprietary.
INSIGHTS INTO SELL INTERNATIONALLY Dec 2015
© 2014 PayPal Inc. All rights reserved. Confidential and proprietary.
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Agenda –
1. Insights from global research done by PayPal in partnership with Ipsos. Research was conducted in 29 markets with approximately 23,000 consumers to examine how people shop online and across borders.
2. Framework for cross-border selling
3. Insights from PayPal data on Canada originated cross-border selling.
© 2015 PayPal Inc. All rights reserved. Confidential and proprietary.
Incidence of online cross-border shopping Shopping across-borders is most prevalent in Ireland, Austria and Israel
3
78
33
64
14
69 61
49 43
63
35
15
51
67
38
21
65
45 51
33
55
30
59 56 62
88 73
30 35
65
20
60
33
79
28 35
47 50
32
58
78
46
29
54
71
32
45 45
60
40
64
37 36 36
11
23
60 59
32
2 7 3 7 3 3 5 6 5 8 7 4 4 8 9 3 10 4 7 5 6 5 8 2 1 4 9 6 4
US CA UK IRE DE FR IT ES NL CH AT SE PL RU IL TR UA BR MX AR NI SA EY IN JP SK SIN AU CN
North America Western Europe Middle East Latin America Asia Pacific Africa Eastern Europe
% Shop domestically only % Shop domestic and x-border % Shop x-border only
Self-stated domestic and cross border purchasing in past 12 months
Q27. Thinking about shopping online, from which of the following country or geographies’ websites have you purchased in the past 12 months? Please include your home country if applicable.Base: Online shoppers (size shown in appendix)
-8
-7
-6
n/a
-9
-11
-12
-6
-7
-5
+2
-8
-3
+4
-3
-2
-5
-1
+5
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
-11
+9
Ppt. change in x-border incidence from 2014 (where data available):
© 2015 PayPal Inc. All rights reserved. Confidential and proprietary.
The majority of cross border purchases are still made on a computer
But in some less developed markets, a large proportion of cross-border purchases are made on a mobile device
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64%
77% 67%
77% 80% 86%
78% 77% 81% 81% 82% 79% 79% 78% 79%
66% 54%
74% 69%
79%
50%
67% 59%
53%
75% 70% 71% 74%
53%
19%
12%
15%
12% 11%
8% 12% 12%
9% 10% 10% 10% 11% 13%
15%
19%
29%
14% 17%
11%
36%
18% 28%
30%
12% 19% 16% 13%
27%
13% 9% 15%
10% 7% 5% 8% 8% 8% 9% 7% 9% 7% 8% 5%
10% 12% 8% 10% 4% 11% 12% 12%
11% 11% 6% 11% 11%
14%
4% 2% 3% 2% 3% 2% 2% 3% 2% 1% 1% 2% 3% 2% 1% 6% 5% 4% 5% 6% 3% 3% 2% 6% 2% 5% 3% 2% 6%
US CA UK IRE DE FR IT ES NL CH AT SE PL RU IL TR UA BR MX AR NI SA EY IN JP SK SIN AU CN
North America Western Europe Middle East Latin America Asia Pacific Africa Eastern Europe
Q33. Thinking only about the purchases you make on websites in other countries, what proportion of your purchases in the last 12 months do you think were made using each device? Base = Cross border shoppers (size shown in appendix)
Other device Tablet Smartphone Desktop/laptop/ notebook
Average proportion of x-border purchases in past 12 month made on each device
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China and the US are the most popular cross-border destinations For Western European shoppers however, shopping within Europe is still more popular
5
25
19
14
11
5
USA
China
UK / GB
Germany
Japan
Top online destinations among all online shoppers surveyed*
Top online shopping destinations for consumers Within each region* (% of online shoppers living in each region shopping cross-border from the country mentioned)
USA 30% CN 21% UK 16%
USA 29% CN 15% UK 7%
USA 38% CN 26%
JP 9%
DE 23% UK 21%
USA 19%
USA 26% CN 14% UK 9%
USA 30% CN 30% UK 12%
North America (n = 1057)
Central/South America (n = 1490)
Western Europe (n = 5823)
Africa (n = 1411)
Middle East (n = 1695)
Asia Pacific (n = 3651)
*Results are among all consumers surveyed, not weighted for population size
Q27. Thinking about shopping online, from which of the following country or geographies’ websites have you purchased in the past 12 months? Please include your home country if applicable.Base: Total online shoppers n= 16,302
Region definition (countries surveyed): Western Europe: UK, IRE, DE, FR, IT, ES, NL, SE, AT, CH, Central and Eastern Europe: PL, RU; North America: USA, CA; Latin America: MX, BR, AR; Middle East: TR, IL, UAE; Asia Pacific IN, CN, AU, JP, SK, SG Africa: NG, SA, EG
CN 31% USA 15%
UK 9%
Eastern Europe (n = 1176)
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In most regions, clothing and apparel is the most popular category for cross-border purchases
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Top x-border categories among all online shoppers surveyed*
Top x-border categories for respondents Living in each region* (% of x-border shoppers shopping x-border in each category)
Entertainment/education online=47%
Clothing = 44% Consumer electronics =
41%
Clothing=42% Entertainment/education
(physical) = 30% Entertainment/education
(digital)=26%
Clothing=48% Entertainment/education
(digital) =45% Consumer Electronics=40%
Clothing=48% Entertainment/education
(physical)=33% Travel & transportation
=33%
Clothing =53% Cosmetics/beauty = 34%
Travel & Transportation =32%
Clothing =51% Travel & Transportation= 35%
ConsumerElectronics=34%
North America (n = 456)
Central/South America (n = 803)
Western Europe (n =3124)
Africa (n = 734)
Middle East (n = 956)
Asia Pacific (n = 1469)
*Results are among all consumers surveyed, not weighted for population size
Clothing=54% Consumer Electronics=
39% Toys & Hobbies=34%
Eastern Europe (n = 555)
49
32
31
31
29
26
Clothing, Footwear & Accessories
Consumer Electronics
Entertainment/education (digital/downloadable/onlin
e)
Travel & Transportation
Entertainment/education (physical items)
Toys & Hobbies
Q28. In the past 12 months what kinds of products have you purchased from websites in other countries? Base: Cross-Border shoppers n = 8097
Region definition (countries surveyed): Western Europe: UK, IRE, DE, FR, IT, ES, NL, SE, AT, CH, Central and Eastern Europe: PL, RU; North America: USA, CA; Latin America: MX, BR, AR; Middle East: TR, IL, UAE; Asia Pacific IN, CN, AU, JP, SK, SG Africa: NG, SA, EG
© 2015 PayPal Inc. All rights reserved. Confidential and proprietary.
Shipping costs, and reassurance about safety of purchasing are key drivers to cross-border shopping
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50
47
41
38
37
37
36
35
35
34
Free shipping
Safe way to pay
Can find items which are hard-to-find locally
Free return shipping
Costs shown/payment possible in your local currency
Customer support in my language
Lower overall cost to buy items from another country
Proof of product authenticity
Faster delivery
Website available in my language or translation available
Q39. Which, if any, of the following would make you more likely to buy from a website from another country? Base: Online shoppers n = 16,302
47
41
39
39
38
37
37
37
36
36
Delivery shipping costs
Concern that I may not receive the item
Having to pay customs duties/fees and /or taxes
May not receive sufficient help if I encounter problems
Delivery time not fast enough
Concern that the item I receive would not be as described
Difficult process for returning products
Concerns about counterfeit goods
Concern about identity theft / fraud
It is not clear how much duties/customs fees/taxes I will have to pay
Q36. Which, if any, of the following reasons prevent you purchasing from websites in another country (more often)? Base: Online shoppers = 16,302
*Results are among all consumers surveyed, not weighted for population size
Top 10 potential drivers for x-border shopping among all online shoppers surveyed*
Top 10 barriers for x-border shopping among all online shoppers surveyed*
© 2014 PayPal Inc. All rights reserved. Confidential and proprietary.
The five species of cross-border online shopper Research reveals that the cross-border shopping population around the world can be divided into five distinct types.
8 Source: PayPal’s Report: Modern Spice Routes - The Cultural Impact and Economic Opportunity of Cross-Border Shopping, 2013
© 2015 PayPal Inc. All rights reserved. Confidential and proprietary.
Challenges for businesses to sell abroad
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Despite the growing market opportunity, many retailers aren’t actively pursuing international opportunities because they’re unsure about:
Concern on increased fraud and chargebacks
Complexity in calculating and paying taxes to buyer countries
Challenging international logistics (complexity of handling returns)
High international shipping costs
Localized websites
Localized Payments
Hard to get marketing dollars
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The cross-border value chain
Operations Fulfillment
Access to consumer base
Category/ product recommend-ation
Offers/ coupons
Language, time zone, source relevance
Marketing (SEO, SEM)
Local website hosting
Website in local language/ form factor
Shopping cart integration
FX support
Tax compliance
Order management
Sourcing
Localized ops and CS support
Accounting integration
International shipping and tracking
Returns
Warehousing
Customs clearance
Seller and buyer protection
Local currency listing
Distribution Demand generation Selling Payment Merchant
How is my payment
processed?
How do I get my
purchase? Where do I find products? How do I pay
for them? Consumer
Description
We are a trusted part of people’s financial lives and a partner to merchants in 203 markets around the world.
Our customers can accept payments in currencies, 100 withdraw funds to their bank accounts in currencies, 57
and hold balances in their PayPal accounts in currencies. 26
Almost PayPal team members provide
support to our customers in over languages. 8,000
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PayPal’s Global scale
$300B 79% 94M Of shoppers in key markets, 79% used PayPal for a cross-border transaction between
June 2012 and June 2013.
In 2014, 94 million people shopped with PayPal across
borders in key markets.
In key markets, cross-border trade is expected to pass
$300B in 2018.
PayPal’s international
footprint
© 2014 PayPal Inc. All rights reserved. Confidential and proprietary.
Canada
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By 2018, bringing cross-border sales to an estimated CAD 12.8 billion
Rank Industry
1 fashion
2 auto-parts
3 website-services
4 software
5 travel
6 sports-equip
7 arts-n-craft
8 memorabilia
9 cellphones
10 computer-hardware
Based on PayPal data, below are top exporting industries from Canada -
Source: PayPal data: 2014
© 2014 PayPal Inc. All rights reserved. Confidential and proprietary.
Canada’s Top online export countries… (based on PayPal data)
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1 USA
2 UK
3 Australia
4 Germany
5 France
6 China
7 Netherlands
8 Hong Kong
9 Brazil
10 Japan
1
2
3
4 5
6
7
8
9
10
Austria, Norway and Israel are opportunities
Source: PayPal data: 2014
© 2014 PayPal Inc. All rights reserved. Confidential and proprietary.
Top Canadian Cities exporting and their top export industries (based on PayPal Data)
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1
2
3
4
5 6
8
City Industry 1 Toronto Fashion 2 Vancouver Fashion 3 Montreal Fashion 4 Calgary Photography 5 Mississauga Auto-Parts 6 Ottawa Software 7 Victoria Fashion 8 Edmonton Fashion 9 London Travel 10 Oakville Fashion
Rank Industry 1 fashion 2 auto-parts 3 website-services 4 software 5 travel 6 sports-equip 7 arts-n-craft 8 memorabilia 9 cellphones
10 computer-hardware
Source: PayPal data: 2014
© 2014 PayPal Inc. All rights reserved. Confidential and proprietary.
Case Study: Canadian companies that went global
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Penzu, www.penzu.com Alexander Mimran Australia, Germany, Hong Kong, New Zealand
Whistle & Flute Clothing, www.whistleandfluteclothing.com Miranda and Ryan McCullagh Southeast Asia and Canada
© 2014 PayPal Inc. All rights reserved. Confidential and proprietary.
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How They Shop • 70% of consumers shopped online; • 30% have shopped from intl sites. Consumers most often purchase from: 1. China (13%) 2. UK/Great Britain (9%) 3. Canada (9%) Categories: 1. Clothing/apparel, footwear and
accessories (34%) 2. Toys and hobbies (18%) 3. Travel and transportation (18%) Barriers and Drivers • shipping costs, and • delivery times.
How They Shop • 76% of consumers shopped online; • 42% have shopped from intl sites. Consumers most often purchase from: 1. United States (24%) 2. China (16%) 3. Germany (9%) Categories: 1. Clothing/apparel, footwear and
accessories (33%) 2. Cosmetics/beauty products (19%) 3. Jewelry/watches (18%) 4. Entertainment/education (physical
items) (18%) Barriers and Drivers • shipping costs
How They Shop • 70% of consumers shopped online; • 76% have shopped from intl sites. Consumers most often purchase from: 1. United States (50%) 2. UK/GB (36%) 3. China (32%) Categories: 1. Clothing/apparel, footwear and
accessories (42%) 2. Entertainment/education (physical
items) (27%) 3. Toys and hobbies (24%) Barriers and Drivers • shipping costs
https://www.paypal-passport.com/
© 2014 PayPal Inc. All rights reserved. Confidential and proprietary.
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How They Shop • 26% of online consumers have shopped
from intl sites. Consumers most often purchase from: 1. United States (14%) 2. Hong Kong (9%) 3. UK/Great Britain (6%) 4. Japan (6%) Categories: 1. Clothing/apparel, footwear and
accessories (45%) 2. Cosmetics/beauty products (38%) 3. Consumer electronics (31%) Barriers and Drivers • shipping costs
• Word of mouth - Ensure Your Supply Can Meet the Demand
• Shipping Costs
• Focus on a Product Line that is Already in Demand
• Go Mobile
• Invest in Translations
• Simplify Payment
• Singles Day (November 11th) https://www.paypal-passport.com/
Questions
© 2015 PayPal Inc. All rights reserved. Confidential and proprietary.
Appendix Research Methodology
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On behalf of PayPal, Ipsos interviewed a representative quota sample** of c.800 (23,354 in total) adults (aged 18 or over) who own and/or use an internet enabled device* in each of 29 countries (UK, Ireland, France, Germany, Austria, Switzerland, Italy, Spain, Netherlands, Sweden, Poland, Turkey, Russia, Israel, UAE, USA, Canada, Brazil, Mexico, Argentina, India, China, Japan, South Korea, Singapore, Australia, South Africa, Nigeria, Egypt). Interviews were conducted online between 17th September and 28th October 2015. Data was weighted to known incidence of online shoppers in all countries, and to demographic profile of internet users in 4 countries (SK, SG, EG & UAE). *Desktop computer/Laptop/ notebook computer/Tablet/Smartphone/Some other type of mobile phone/Electronic organizer/PDA with wireless voice and data features/Games console with Internet connectivity (e.g. Wii). **Age, gender and region representative of online population (Age and gender representative in Switzerland). Quotas were not set for Nigeria, as online profile not available in this country. Ipsos is a member of the MRS, and research was carried out according to MRS code of conduct.
© 2015 PayPal Inc. All rights reserved. Confidential and proprietary.
Research Methodology This study was conducted across 29 markets and approx. 23,000 consumers globally.
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Screening
Transaction & Spend: Past 12 Months & Next 12 Months
Cross-Border transactions &
spend
Cross-Border Payment
Online survey
Global Fieldwork conducted Sept-Oct 2015
20 minute questionnaire
Respondents recruited from online panels
Own and/or use an Internet-enabled device* Nationally
representative of online population Aged 18+
Fieldwork Sample, per market
Questionnaire
This research was carried out to the international quality standard for market research, ISO 20252:2012
Data weighted to adjust for known population incidence
29 markets Sample of c.800 per market.
Drivers, barriers and attitudes to cross-border shopping
*Desktop computer/Laptop/ notebook computer/Tablet /Smartphone/Some other type of mobile phone/Electronic organizer / PDA with wireless voice and data features/Games console with Internet connectivity (e.g. Wii) /Smart TV