Four leading ecommerce markets set to double in size to £645bn by 2018
The four leading ecommerce markets of the UK, US, China and Germany will double in size by 2018 to £645bn, according to new research. This presents, found the study by OC&C Strategy Consultants
, PayPal and Google, a huge opportunity for those UK retailers that localise to give customers from these markets the best customer experience.
The report, Cracking the World's Largest Ecommerce Markets
, studied search and transaction data from Google and PayPal. It found that of the four markets, the UK was the most popular overseas shopping destination for German shoppers, and second most popular in both China and the US.
But it also found that UK online retailers do not currently localise their offer in detail. Many could earn up to 60% more, trebling their international customer base, argues the report, if they developed relationships with local consumers, responded to local payment preferences and developed competitive delivery options.
Anita Balchandani, partner and head of UK Retail at OC&C Strategy Consultants, said: “The study has shown that UK retailers are some of the world’s most popular and are in a strong position to seize more opportunities abroad. But at the moment, the majority are only doing the basics to adequately serve foreign markets, for example, by offering international delivery on their UK website and working with partners to provide local returns addresses.
“Those retailers that are going deeper are already reaping the rewards. For example, ASOS has adopted zonal pricing and invested in local warehouses to support returns in foreign markets. As a result, searches for ASOS from overseas have grown faster than any other UK retailer. Or take the case of Boden, which has taken a quintessentially British brand with a local warehouse in the US to get speed to market as well as accepting Paypal to support US growth; while in Germany they have adapted to open invoicing, a feature that German consumers prize.”
The research has revealed that the biggest pull factor for international customers when choosing ‘Made in UK’ is the ability to buy unique products they cannot find in their own country (40%), while one third mentioned pricing, and 29% said trust around quality was the most important driver for purchasing from UK brands.
The research not only identifies the pull factors for shopping overseas, but also the biggest barriers. For customers who already shop cross-border, data security, trust in the retailer and ease of returns are particularly important.
Martijn Bertisen, sales director at Google UK said: "The number of people with internet access is growing fast, with many new consumers skipping the desktop phase entirely and only experiencing the web through a smartphone. Our study shows that this is increasingly translating into mobile transactions and that a mobile-first or even mobile-only strategy is now imperative to international success in retail. UK retailers should be well positioned to lead this growth internationally, as UK consumers are already amongst the most mobile of all. PayPal data used in this study suggests that in fashion, for example, 59% of online transactions are already being made via mobile in the UK, compared with 45% and 24% in the US and Germany respectively.”
Cameron McLean, managing director at PayPal UK , said: “British businesses have more opportunities than ever to capitalise on the international online shopping market, provided they can offer the right levels of security, trust and translation to build consumer confidence. Last year we launched PassPort, a website designed to show businesses new opportunities in foreign markets, and equip them with the tools and knowledge to grow their international sales.”