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Cross-border shopping on the rise

News, 19 January 2016

SINGAPORE: E-commerce is growing across Asia-Pacific with international brands benefiting from a willingness among consumers to shop across borders, albeit with continuing reservations about the provenance of online stores and shipping costs.

The Cross-Border Research report from payments provider PayPal was based on a survey of 23,354 respondents across 29 countries, including, in Asia Pacific, Australia, China, India, Japan, Singapore and South Korea.

This found that a majority of APAC shoppers (68%) preferred large "global" stores such as Amazon when they were contemplating a purchase from an overseas vendor, Inside Retail Asia reported.

And Amazon's home nation, the US, was the top online shopping destination for APAC shoppers, followed by China, the UK and Japan.

Unsurprisingly, the city state of Singapore led the way in terms of cross-border purchases: some 69% of online purchases there were made abroad. But Australia was not far behind, on 65%, while India was third on 38%.

Free shipping was an important incentive to making such purchases, cited by almost half of respondents in the APAC region (47%), just ahead of secure payment options (46%) and proof of authenticity (41%).

The other major stress point was currency: three quarters of respondents wanted the option to pay in their own currency, while half said they felt uneasy paying in a foreign currency.

Most shoppers in the region continue to rely on desktops for cross-border shopping although around four in ten in China and India are using mobile devices.

"As both the internet and use of mobile phones and tablets transform the face and form of retail, online borderless shopping continues to grow rapidly, presenting a clear opportunity for businesses to embrace their export potential," said Hamish Moline, PayPal Asia-Pacific VP of regional merchant services.

"Any business can become a competitive player in the global marketplace," he added, since it was now possible to "extend their reach to the global market without the exorbitant cost of traditional geo-expansion".

To be successful, it may be less a case of 'can' than 'must' for businesses, however, since the report expected an increasing number of consumers in the region to shop online – in India, for example, it predicted a 53% increase in online shopping in the coming year.

The advent of the ASEAN Economic Community is another incentive for brands and businesses to think beyond their own borders.

Data sourced from Inside Retail Asia; additional content by Warc staff