A growing cross-border
e-marketplace in Asia Pacific is a signal for Filipino SMEs to consider taking
their products and services abroad, according to PayPal.
The global leader in
digital payments and Ipsos recently released the 2018 PayPal Cross-Border
Consumer Research, which investigates the online shopping habits of
approximately 34,000 consumers in 31 countries
— including the Philippines. It reveals a growing cross-border
e-commerce scene, with the US and China being the biggest markets in terms of
online spend.
According to the study,
there is a healthy appetite for e-commerce in APAC, with 48 percent of
consumers shopping cross-border in the last 12 months. “This is a huge
opportunity for local entrepreneurs to expand their businesses beyond the
Philippines. China, in particular, shows significant promise as the Philippines
improves its bilateral relations with the world’s second largest economy,” said
Abhinav Kumar, Head of Strategic Partnerships for PayPal in Southeast Asia.
China, the largest market
for online purchases in the world, spent an estimated total of RMB 3.9 trillion
for online transactions in 2017. This is projected to increase to RMB 5.4
trillion in 2018. Cross-border trade (buying from a website not in their own
country) is increasing with 43 percent of Chinese consumers shopping
cross-border in the last 12 months compared to 26 percent the previous year.
APAC countries like
Australia, India and Japan are likewise growing fast. For 2018, the PayPal
study projects Japan to increase its total online spend by 26 percent, India by
53 percent, and Australia by 19 percent.
Cross-border opportunities
for Filipino merchants
The digital upheaval
brought about by social media and increased smartphone penetration translate to
increased opportunities for cross-border trade, as seen by the projected growth
in online spending. The world has become much smaller as platforms like PayPal
enable merchants to take advantage of opportunities by connecting them with
global consumers, allowing SMEs and micro enterprises more opportunities to
thrive.
According to the study, the
top few reasons for the growth in cross-border shopping can be attributed to
the novelty of accessing items that are not available in their own country (49
percent) or to discover new and interesting products (34 percent). Over 30
percent of consumers from China and Australia who shop online cite finding
items that are hard to find locally as a reason for making them more likely to
shop cross-border.
“The demand for unique
products is there, and this is an opportunity for Filipino businesses to
showcase products not available elsewhere. The Philippines produces many unique
products thanks to its rich culture, and with e-commerce, local merchants can now
bring uniquely Filipino products to the world,” said Kumar.
Cosmetics on the rise for
APAC consumers
As more and more Asian
nations become more open to cross-border trade, Filipino businesses should be
mindful of what consumers are buying to be able to take full advantage.
Globally, fashion, such as
clothing, footwear and accessories, remain the top category for online
shopping, with 68 percent of cross-border online shoppers having spent on these
items in the past 12 months.
While APAC shoppers are
forecasted to be spending more online in 2018, buying behaviors are also
changing. Survey results showed that Chinese consumers are turning their
attention to spending on things for health and beauty as well as their
children, with online spending on cosmetics and baby supplies predicted to
increase by 21 and 31 percent, respectively, in 2018. In India, online spending
on the same categories are forecasted to increase by 40 and 37 percent,
respectively. Consumer electronics is also another growth category in APAC,
with online spending in the category expected to grow by 40 percent in India,
20 percent in China, and 13 percent in Australia.
Security a key driver of
cross-border trade
Despite the increasing
popularity of international online shopping among consumers across the globe,
challenges to cross-border shopping remain. Barriers vary from region to
region. Over a third (38 percent) of all online shoppers say that having a more
secure way to pay would make them more likely to shop internationally.
In order for Filipino
merchants to take full advantage of the expected increase in online spend, they
need to address these barriers to encourage overseas purchases. With PayPal,
they can connect to international consumers via a secure, seamless, and
hassle-free network.
“At PayPal, we understand
that while more and more people shop online, the hassle of online payments can
be a barrier. PayPal addresses those concerns through a more convenient and
more secure online payment facility for consumers to buy the things they need
and love. As Filipino businesses take their cross-border sales online, we are
proud to empower people and businesses to join and thrive in the global
economy,” added Kumar.
PayPal endeavours to bring
a sense of security to online shoppers with Refunded Returns (terms and
limitations apply). In addition to Refunded Returns, PayPal offers Buyer
Protection for eligible transactions to help provide a greater peace of mind
for online shoppers. This protection goes both ways as merchants can be
protected against eligible fraudulent transactions with Seller Protection.
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