Ipsos Paypal Cross Border Consumer Research 2015

PayPal Cross-Border
Consumer Research 2015

GLOBAL SNAPSHOT
PayPal Cross Border contacts: Melissa OMalley, Astrid Huijssoon, Ritesh Arora
PayPal Market Research Contact: Daniel Jenkinson
Ipsos Contacts: Eleanor Pettit & Peter Attwell
2015 PayPal Inc. All rights reserved. Confidential and proprietary.
Background & Objectives

Advancement of technology is helping to open up commerce
opportunities for everyone - across borders, anywhere, anytime and via
any device.
Understanding that we are going through a commerce revolution, PayPal

in partnership with Ipsos, conducted a global 29 market survey with
approximately 23,000 consumers to examine how people shop online
and across borders.
This survey is designed to gain insight into 3 main areas:
How online commerce, and specifically cross-border commerce is evolving
How and why consumers shop online across borders
How consumers pay for cross-border transactions
Research Methodology
This study was conducted across 29 markets and approx. 23,000 consumers globally.
Fieldwork
Sample, per market
Global Fieldwork
conducted Sept-Oct
2015
Online
survey
20 minute
questionnaire
This research was

carried out to
the international
quality standard
for market
research, ISO
20252:2012
29 markets
Sample of c.800
per market.
Nationally
representative of
online population
Aged 18+
Respondents
recruited from
online panels
Own and/or use an

Internet-enabled
device*
Data weighted to adjust for

known population incidence
Questionnaire
Screening
Transaction & Spend:

Past 12 Months &
Next 12 Months
Cross-Border
transactions &
spend
Drivers, barriers and

attitudes to crossborder shopping
Cross-Border
Payment
*Desktop computer/Laptop/ notebook computer/Tablet /Smartphone/Some other type of mobile phone/Electronic

3
organizer / PDA with wireless voice and data features/Games console with Internet connectivity (e.g. Wii) /Smart TV
GLOBAL SNAPSHOT
Online and x-border commerce size and growth estimates

US and China are biggest markets in terms of online spend, but India is growing fast
Online commerce size (US$BN) / Growth (CAGR 2014-2017)
Total domestic spend 2015 ($US bn)
Total x-border online spend 2015 ($US bn)
CAGR
100
90
80
70
60
50
40
30
20
10
0
Compound annual growth rate: total e-commerce (CAGR)

Compound annual growth rate: mobile commerce (CAGR)
US$BN
600
500
400
300
200
100
0
US CA UK IRE DE
North America
FR
IT
ES
NL CH AT
Western Europe
SE
PL
RU
Eastern Europe
IL
TR UA BR MX AR
Middle East
Latin America
NI
SA
Africa
EY
IN
JP
SK
SG AU CN
Asia Pacific
5
Incidence of online cross-border shopping

Shopping across-borders is most prevalent in Ireland, Austria and Israel
Self-stated domestic and cross border purchasing in past 12 months
-11
-12
-6
-7
-5
+2
-8
-3
+4
-3
-2
-5
-1
+5
n/a
n/a
n/a
n/a
n/a
10
1
11
20
28
33
35
29
32
47
32
50
60
23
36
32
36
64
60
59
71
78
79
45
54
58
60
40
45
46
37
+9
-9
-11
n/a
n/a
-6
n/a
-7
% Shop x-border only
-8
Ppt. change
in x-border incidence
Vs.2014*
% Shop domestic and x-border
n/a
% Shop domestically only
88
78
69
64
67
63
61
49
51
43
US
CA
North America
UK IRE DE
FR
IT
ES
NL
CH
AT
SE
Western Europe
*where data available
PL
RU
Eastern Europe
IL
TR
UA
Middle East
59
55
51
33
30
BR MX AR
NI
21
15
14
45
38
35
33
73
65
Latin America
56
65
62
30
SA
Africa
EY
IN
JP
35
SK SIN AU CN
Asia Pacific
Q27. Thinking about shopping online, from which of the following country or geographies websites have you
purchased in the past 12 months? Please include your home country if applicable.Base: Online shoppers (size shown 6
in appendix)
Growth is expected in cross-border spending in all markets surveyed

Largest growth is expected in Nigeria and India
% Estimated growth* in x-border spend for 2016
90
85
80
79
70
60
56
50
41
40
35
30
31
28
16
10
16
31
31
30
21
20
20
10
45
42
39
15
11
11
14
13
12
16
15
7
2
0
US
CA
North America
UK IRE
DE
FR
IT
ES
NL
CH
AT
SE
Western Europe
PL
RU
Eastern Europe
IL
TR
Middle East
UA
BR MX AR
Latin America
NI
SA
Africa
EY
IN
JP
SK SIN AU CN
Asia Pacific
*Estimated growth based on future intention of cross-border shoppers, and online shoppers who
have not shopped cross-border (from survey data)
The majority of cross border purchases are still made on a computer

But in some less developed markets, a large proportion of cross-border purchases are
made on a mobile device
Average proportion of x-border purchases in past
12 month made on each device
4%
2%
9%
13%
3%
15%
2%
10%
2%
5%
2%
8%
3%
8%
2%
8%
1%
9%
8%
12%
12%
3%
7%
11%
12%
12%
9%
10%
1%
7%
10%
Desktop/laptop/
notebook
2%
9%
3%
7%
2%
8%
10%
11%
13%
1%
5%
15%
10%
5%
12%
4%
8%
5%
10%
6%
4%
77%
80%
86%
78%
77%
81%
81%
82%
79%
79%
78%
64%
CA UK IRE DE
North America
IT
ES
NL CH
AT
SE
Western Europe
PL
RU
Eastern Europe
IL
TR
6%
12%
2%
11%
5%
6%
12%
19%
11%
36%
74%
66%
FR
12%
2%
3%
2%
11%
11%
6%
14%
18%
16%
13%
UA
Middle East
30%
79%
67%
59%
50%
BR MX AR
Latin America
27%
75%
69%
54%
US
11%
3%
Other device
28%
79%
67%
3%
17%
19%
29%
77%
Smartphone
11%
14%
15%
19%
6%
Tablet
NI
SA
Africa
EY
70%
71%
53%
53%
IN
74%
JP
SK SIN AU CN
Asia Pacific
Q33. Thinking only about the purchases you make on websites in other countries, what proportion of your purchases
8
in the last 12 months do you think were made using each device? Base = Cross border shoppers (size shown in
appendix)
China and the US are the most popular cross-border destinations

For Western European shoppers however, shopping within Europe is still more popular
Top x-border shopping destinations for consumers
Within each region*
(% of online shoppers living in each
region shopping cross-border from
the country mentioned)
Top x-border destinations among

all online shoppers surveyed*
USA
Eastern
Europe
(n = 5823)
USA 29%
CN 15%
UK 7%
(n = 1176)
DE 23%
UK 21%
USA 19%
19
UK / GB
14
Germany
Central/South
America
(n = 1490)
11
USA 38%
CN 26%
JP 9%
Middle East
(n = 1695)
CN 31%
USA 15%
UK 9%
25
China
Japan
Western
Europe
North
America
(n = 1057)
Africa
USA 30%
CN 30%
UK 12%
Asia Pacific
(n = 3651)
(n = 1411)
USA 30%
CN 21%
UK 16%
USA 26%
CN 14%
UK 9%
*Results are among all consumers surveyed,

not weighted for population size
Region definition (countries surveyed): Western Europe: UK, IRE, DE, FR, IT, ES, NL, SE,
AT, CH, Central and Eastern Europe: PL, RU; North America: USA, CA; Latin America: MX,
BR, AR; Middle East: TR, IL, UAE; Asia Pacific IN, CN, AU, JP, SK, SG Africa: NG, SA, EG
Q27. Thinking about shopping online, from which of the following country or geographies websites have you
purchased in the past 12 months? Please include your home country if applicable.Base:
Total online shoppers n= 16,302
In most regions, clothing and apparel is the most popular category for
cross-border purchases
Top x-border categories for respondents
Living in each region*
(% of x-border shoppers shopping
x-border in each category)
Clothing, Footwear &

Accessories
49
Consumer Electronics
32
Entertainment/education
(digital/downloadable/online
)
31
Travel & Transportation
31
(physical items)
29
Eastern Europe
(n =3124)
North America
(n = 456)
Top x-border categories among

all x-border shoppers surveyed*
Toys & Hobbies
Western Europe
Clothing=42%
(physical) = 30%
(digital)=26%
Clothing=48%
(physical)=33%
Travel & transportation
=33%
(n = 555)
Clothing=54%
Consumer Electronics=
39%
Toys & Hobbies=34%
Middle East
(n = 956)
Clothing =51%
Travel & Transportation= 35%
ConsumerElectronics=34%
Central/South
America (n = 803)
Africa (n = 734)
Clothing=48%
(digital) =45%
Consumer Electronics=40%
online=47%
Clothing = 44%
Consumer electronics =
41%
Asia Pacific
(n = 1469)
Clothing =53%
Cosmetics/beauty = 34%
Travel & Transportation =32%
26

Region definition (countries surveyed): Western Europe: UK, IRE, DE, FR, IT, ES, NL, SE,
AT, CH, Central and Eastern Europe: PL, RU; North America: USA, CA; Latin America: MX,
BR, AR; Middle East: TR, IL, UAE; Asia Pacific IN, CN, AU, JP, SK, SG Africa: NG, SA, EG
Q28. In the past 12 months what kinds of products have you purchased from websites in
other countries? Base: Cross-Border shoppers n = 8097
10
Attitudes to cross border shopping vary dramatically between markets

Attitudes among all online shoppers surveyed*
(% Agree with statement)
I prefer large 'global' stores (e.g.

Amazon) when purchasing from
another country
64
It does not matter to me where the

items are shipped from, as long as
the total price is good
61
I would not feel comfortable making

purchases from a foreign website
that is not in my own language
I would not feel comfortable making purchases

from a foreign website that is not in my own
language
It is not important to me if the online

retailer is based overseas or not
I prefer large 'global' stores (e.g. Amazon) when

purchasing from another country
I trust online stores from other countries as

much as stores from the country I live in
58
It is not important to me if the

online retailer is based overseas or
not
46
I am generally comfortable buying

from an online store in another
country
45
I trust online stores from other

countries as much as stores from
the country I live in
41
Sometimes it is not clear whether I

am shopping on a domestic or
international online store
41
I have in the past made purchases

on websites not in my own
language
Attitudes compared between countries
37
*Results are among all consumers surveyed, not weighted for

population size
US CA UK IRE DE FR IT ES NL CH AT SE PL RU IL TR UA BR MX AR NI SA EY IN JP SK SIN AU CN
Q34b/Q47. To what extent do you agree or disagree with each of the following statements?
Base: Online shoppers (size shown in appendix)
11
Shipping costs, and reassurance about safety of purchasing are key drivers to
cross-border shopping
Top 10 potential drivers for x-border shopping among all online
shoppers surveyed*
Free shipping
50
Safe way to pay
47
Can find items which are hard-to-find

locally
41
Top 10 barriers for x-border shopping among all online shoppers

surveyed*
Delivery shipping costs
47
Concern that I may not receive the item
41
Having to pay customs duties/fees and /or

taxes
39
39
Free return shipping
38
May not receive sufficient help if I

encounter problems
Costs shown/payment possible in

your local currency
37
Delivery time not fast enough
37
Concern that the item I receive would not

be as described
37
Lower overall cost to buy items from

another country
36
Difficult process for returning products
37
Proof of product authenticity
35
Concerns about counterfeit goods
37
Faster delivery
35
Concern about identity theft / fraud
36
Website available in my language or

translation available
34
It is not clear how much duties/customs

fees/taxes I will have to pay
36
Customer support in my language
*Results are among all consumers surveyed, not weighted for population size
Q39. Which, if any, of the following would make you more likely to buy from a website
from another country? Base: Online shoppers n = 16,302
Q36. Which, if any, of the following reasons prevent you purchasing from websites in
another country (more often)? Base: Online shoppers = 16,302
38
12
The number of people sending returns cross-border is low in most countries

Freight forwarding is most popular in China, India and UAE
78
Incidence of sending returns
Incidence of freight forwarding*
68
66
50
33
26
25
18
16
12
US
30
CA
North America
15
22
16
UK IRE DE
29
30
27
20
13
FR
16
13
12
15
IT
ES
NL
CH
30
12
AT
SE
Western Europe
35
24
23
19
17
16
RU
Eastern Europe
18
16
IL
TR
UA
Middle East
BR MX AR
Latin America
25
23
19
18
14
11
PL
42
37
32
30
26
19
51
42
40
38
57
47
45
44
57
54
51
NI
SA
Africa
EY
IN
JP
16
SK SIN AU CN
Asia Pacific
* Freight forwarding defined as having products delivered to a freight forwarding company (who
receives goods in the country of purchases then ships them to you) or having products delivered
to a friends/family members/hotels address in the country of purchase
Q42. Have you ever done any of the following when buying products online from other countries?
Q40. Which of the following (if any) have happened to you in the Past 12 months? returned a product to
13
another country. Base = cross-border shoppers (size shown in appendix)
Attitudes to currency conversion

Attitudes among all online shoppers surveyed*
Attitudes compared between countries
I would prefer to have the option

of paying either in local currency
or my own currency
73
I check currency conversion rates

before making purchases in
foreign currencies
62
I would not feel comfortable

making purchases online in a
foreign currency
45
My bank charges me for making

payments in foreign currencies
45
I have in the past made purchases

online paid in a foreign currency
44
The fees charged by PayPal for

xborder transactions are generally
lower than other payment
methods
PayPal charges me for making
payments in foreign currencies
I would not feel comfortable making purchases

online in a foreign currency
I check currency conversion rates

before making purchases in foreign
currencies
The fees charged by PayPal for x-border

transactions are generally lower than other
payment methods
I would prefer to have the option of

paying either in local currency or my own
currency
33
29
*Results are among all consumers surveyed, not weighted for

population size
US CA UK IRE DE FR IT ES NL CH AT SE PL RU IL TR UA BR MX AR NI SA EY IN JP SK SIN AU CN
Q47. Please state whether you agree or disagree with each of the following statements about
shopping online in other countries: Base: Online shoppers (size shown in appendix)
14
Safety and convenience are key determinates of cross-border payment

method preference
Reasons for payment method preference among all crossborder shoppers surveyed
(% of all x-border shoppers who gave a preference*)
45
Safer way to pay
38
More convenient way to pay
36
Payment is processed quickly

Accepted by most retailers
34
Well-known, trusted brand
33
Purchase protection
28
I don't have to share my personal or financial details with the seller
28
26
Faster checkout
23
I can see what price I will be paying in my own currency
21
Habit
Does not charge me commission/transaction fee on overseas purchases
Better currency conversion rate

15
10
Receive rewards/cashback
Lack of alternatives
Q44c. For what reasons is this your preferred payment method for online transactions/purchases from
websites from another country?)
15
Base: Cross Border Shoppers who give preference (n = 7839)
Incidence of P2P payments
Incidence of Cross-border P2P Payments
(% respondents have Sent money to friends and/or family in another country in the past 12 months)
30
19
19
15
14
13
12
10
7
10
8
10
8
13
12
12
10
8
6
5
3
US
CA
North America
UK IRE DE
FR
IT
ES
NL
CH
AT
SE
Western Europe
PL
RU
Eastern Europe
IL
TR
UA
Middle East
BR MX AR
Latin America
NI
SA
EY
IN
Africa
Q48. Which of the following have you done online in the past 12 months?
Base = all internet users (size shown in appendix)
JP
SK SIN AU CN
Asia Pacific
16
Market Sizing Estimate and Forecast: Methodology
Estimating and forecasting online and mobile sales for the period 2014 to 2017
INPUTS
To build the forecast we look at
relationships between key macroeconomic indicators.
Total and online population
development (Source: The World
Bank).
GDP per capita development
(Source: The World Bank).
Total and online retail sales
(Source: ONS Report).
SURVEY DATA
We use the survey data to add purchase
behaviour (penetration and average
spend per head) to understand the size
and projection of future category
spend.
Category online purchase penetration
Average category spend
Smartphone penetration
Tablet penetration
MODELING
From these inputs, we model category
sales growth, changes to the
online/mobile population, and growth
in online/mobile spend for those
populations to forecast total online and
mobile spending. We assume that the
current rates of adoption amongst nonusers continues and as the level of
adoption reaches the upper limits we
reach saturation.
Total online spend includes mobile spend. Mobile spend includes spend on both smartphones and tablets.
Estimations/forecast based on the following meta categories: Groceries, Food, drink & Alcohol; Health & Beauty; Clothing,
Footwear & Accessories; Event tickets; Travel & transportation; Household goods; Leisure, Hobbies & Outdoors;
Baby/Childrens Supplies; Entertainment; and Consumer Electronics.
17
Online
shoppers
X-border
shoppers
Weighted
base:
Total
Total
Online
shoppers
X-border
shoppers
Global Technical Note

Weighted
base:
UK
800
627
224
India
808
632
241
Ireland
810
594
511
China
800
652
231
Germany
801
616
189
Singapore
813
582
406
France
800
569
219
Japan
800
626
75
Italy
800
566
291
Australia
800
538
349
Spain
803
536
303
South Korea
810
620
167
Netherlands
803
535
197
US
800
564
125
Austria
800
603
513
Canada
808
493
331
Switzerland
809
598
391
Brazil
800
532
261
Sweden
808
579
286
Mexico
808
506
341
Poland
811
592
193
Argentina
800
452
201
Russia
801
584
362
South Africa
810
464
192
Turkey
812
590
207
Egypt
811
462
202
Israel
810
591
468
Nigeria
804
485
339
UAE
813
514
281
On Behalf of PayPal, Ipsos interviewed a representative quota

sample** of c.800 (23,354 in total) adults (aged 18 or over)
who own and/or use an internet enabled device* in each of 29
countries (UK, Ireland, France, Germany, Austria, Switzerland,
Italy, Spain, Netherlands, Sweden, Poland, Turkey, Russia,

Israel, UAE, USA, Canada, Brazil, Mexico, Argentina,
India,China, Japan, South Korea, Singapore, Australia, South
Africa, Nigeria, Egypt). Interviews were conducted online
between 17th September and 28th October 2015.

Data was weighted to known incidence of online shoppers in
all countries, and to demographic profile of internet users in 4
countries (SK, SG, EG & UAE).
*Desktop computer/Laptop/ notebook computer/Tablet
/Smartphone/Some other type of mobile phone/Electronic
organizer / PDA with wireless voice and data features/Games
console with Internet connectivity (e.g. Wii)
** Age, gender and region representative of online population (Age
and gender representative in Switzerland). Quotas were not set for
Nigeria, as online profile not available in this country
18

Ipsos Paypal Cross Border Consumer Research 2015

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Consumer Research 2015

2015 PayPal Inc. All rights reserved. Confidential and proprietary.

Background & Objectives

Understanding that we are going through a commerce revolution, PayPal

Sample, per market

This research was

Own and/or use an

Data weighted to adjust for

Transaction & Spend:

2015 PayPal Inc. All rights reserved. Confidential and proprietary.

Drivers, barriers and

*Desktop computer/Laptop/ notebook computer/Tablet /Smartphone/Some other type of mobile phone/Electronic

2015 PayPal Inc. All rights reserved. Confidential and proprietary.

Online and x-border commerce size and growth estimates

Compound annual growth rate: total e-commerce (CAGR)

2015 PayPal Inc. All rights reserved. Confidential and proprietary.

Incidence of online cross-border shopping

% Shop x-border only

% Shop domestic and x-border

% Shop domestically only

*where data available

2015 PayPal Inc. All rights reserved. Confidential and proprietary.

Growth is expected in cross-border spending in all markets surveyed

% Estimated growth* in x-border spend for 2016

The majority of cross border purchases are still made on a computer

China and the US are the most popular cross-border destinations

Top x-border destinations among

*Results are among all consumers surveyed,

Clothing, Footwear &

Travel & Transportation

Top x-border categories among

Toys & Hobbies

*Results are among all consumers surveyed,

Attitudes to cross border shopping vary dramatically between markets

(% Agree with statement)

I prefer large 'global' stores (e.g.

It does not matter to me where the

I would not feel comfortable making

I would not feel comfortable making purchases

It is not important to me if the online

I prefer large 'global' stores (e.g. Amazon) when

I trust online stores from other countries as

It is not important to me if the

I am generally comfortable buying

I trust online stores from other

Sometimes it is not clear whether I

I have in the past made purchases

Attitudes compared between countries

*Results are among all consumers surveyed, not weighted for

2015 PayPal Inc. All rights reserved. Confidential and proprietary.

Safe way to pay

Can find items which are hard-to-find

Top 10 barriers for x-border shopping among all online shoppers

Concern that I may not receive the item

Having to pay customs duties/fees and /or

Free return shipping

May not receive sufficient help if I

Costs shown/payment possible in

Delivery time not fast enough

Concern that the item I receive would not

Lower overall cost to buy items from

Difficult process for returning products

Proof of product authenticity