China and the US present the “greatest” opportunity for cross border eCommerce expansion in 2022 and beyond, according to a joint report from Airwallex and PPRO.
China has “the largest cross border eCommerce market with a total value in 2021 of USD 301.5 billion.” The US has “the second largest market with a value of USD 103.9 billion, and the UK has the third largest market with a value of USD 30.5 billion.”
Despite this, the percentage of online shoppers in China and the US who “have bought items from international retailers remains relatively small.”
In China, just 39% of online shoppers “have shopped cross border, whilst in the US just 33% of online shoppers have done so.”
By contrast, 84% of online shoppers in Israel, 83% in Austria, and 78% in Singapore have bought “from international eCommerce sites in the past.”
Arguably, this ‘gives the China and US markets room for significant expansion over the coming years as cross border shopping grows in popularity.”
Tristan Chiappini, Vice President, Partnerships, and head of APAC at PPRO, says:
“What we’re seeing is a big increase in cross border eCommerce shopping. The size of the eCommerce pie is not dictated any more by the size and growth of your domestic market. Now the world is your oyster, you’re able to tap into that growth in multiple geographies.”
The research shows that “the top-performing eCommerce segment in China in 2021 was toys, hobbies and DIY, with 26% of the market share.” Fashion was “the second highest performing category with 25% of the market share, and food and personal care came in third with 21% of the market share.”
In the US, the top performing eCommerce segment “was fashion with 31% of the market share.”
Electronics and media was “the second best performing segment with 21%, and toys, hobbies and DIY was third with 20%.”
eCommerce businesses “looking to expand into new markets in 2022 and beyond should consider optimizing their online checkout by offering local payment methods that their customers know and trust.” According to research from PPRO, 20% of cart abandonments “are due to a lack of local payment methods on merchant checkouts.”
Popular payment methods in China “include Alipay, UnionPay and WeChat Pay.” Whilst in the US, the preferred payment methods “include Afterpay, Klarna, Splitit and Venmo.”
Airwallex enables eCommerce businesses “to increase their international conversion rates by offering customers 30+ local payment methods at checkout.”
Merchants can simply “plug Airwallex into their online store and instantly give their customers the freedom to pay the way they want, wherever they are.”
Merchants can also “settle in multiple currencies and collect funds directly into their Airwallex Global Account without being forced to convert funds to their home currency, helping them avoid needless FX fees and improve their profit margins.”
Pranav Sood, GM, Airwallex, EMEA says:
“Today’s market presents a tremendous opportunity for eCommerce businesses to grow beyond borders. Airwallex is facilitating that expansion by providing businesses with the financial infrastructure they need to accept multi-currency payments without high fees, and offer the local payment methods their customers trust. With our technology in place, eCommerce businesses can increase international conversion rates, improve their profit margins and achieve exponential growth.”