How retailers can grow their business through cross-border opportunities
- 42% of online shoppers said they are more comfortable shopping internationally than they were in 2020.
- Cross-border shopping is compelling customers around the world, but it has also introduced new challenges for businesses.
- As buyers’ values have changed, their purchasing decisions have changed, creating an opportunity to attract a new audience.
Business has been anything but predictable in recent years. Closures, regulatory changes and concerns for public safety have brought “business as usual” to a screeching halt. As stores and offices closed and shutdowns took hold, shoppers and businesses had to adapt quickly to a new normal.
The economic impact
In the third year of the pandemic, the public health outlook is slowly improving, but the economic impact puts companies at risk of not meeting their growth targets. Perhaps the most notable problem facing buyers is the sharp and sudden wave of inflation at levels never seen in more than 20 years. From gas and groceries to rent and utilities — and more — the cost of living is skyrocketing, forcing consumers to tighten their belts.
And if inflation weren’t enough, global supply chain problems will persist well into 2022. Average shipping times from China to Europe increased by six days at the end of 2021, and China to the West Coast of the United States saw similar increases. It may not sound ideal, but fortunately companies still have opportunities for growth – they just have to look beyond their borders.
The cross-border opportunity
When companies start selling internationally, they not only diversify their customer base, but they also help to mitigate their risks in times of uncertainty. Ultimately, this gives businesses the opportunity to recoup lost revenue, reach new audiences, and drive overall growth.
Despite today’s faltering economy, the future of e-commerce looks bright. Online retail sales have grown steadily around the world, rising 16.3% to $4.9 trillion from 2020 to 2021 and accounted for 19% of all retail sales. And that growth is not behind us: global e-commerce sales are expected to surpass $5 trillion in 2022.
When it comes to cross-border trade specifically, more and more buyers are opening their minds and wallets to buy across borders. In reality, 42% of online shoppers said they are more comfortable with international shopping than they were in 2020*. We’re now at a point where businesses have more access to potential customers than ever before, but that doesn’t mean it’s effortless.
Future cross-border challenges
Although cross-border shopping offers businesses a significant growth opportunity, it comes with a unique set of challenges. Selling to diverse markets with nuanced customer behaviors and preferences is no small task, but companies need to find ways to connect with their global customers to truly make the most of cross-border opportunities. This means understanding what they value, how those values have changed, and how they differ from region to region.
With the volatility we’ve seen recently, companies are finding that they don’t know their customers as well as they used to. The COVID-19 pandemic has caused many people around the world to reevaluate what really matters to them, and 50% of global customers surveyed say they have completely revised their personal goals and life priorities. These changes alter how they shop, what they buy and why they choose certain products or services.
Keeping up with changing customer values can be a challenge for businesses of all sizes, and retailers need to better understand the impact of these changing behaviors on their bottom line. That’s why PayPal conducted research on 14 major markets around the world so retailers can get a better idea of how to successfully approach each market and connect with a wider global audience.
*PayPal commissioned “PayPal Cross-border Insights 2022”. Online survey of adults in 14 markets (aged 18+ who shopped online in the last three months) between December 2021 and January 2022.
This post was created by Insider Studios with PayPal.