Understand your international consumer

September 2020


What do international consumers want from an e-commerce business?

 

Cross-border sales could be an untapped opportunity for your business. The areas that should be reviewed to assess the possible opportunity could be: 

  • your product categories

  • product availability across international markets

  • how unique your offering is

  • your sales channels 

  • your ability to deliver goods to customers quickly and cost-effectively. 

So, what are the key drivers of cross-border purchasing?

To start reviewing consumer drivers, you should take the time to understand why your consumers shop online, where they typically buy from. Analysing the behaviour of your potential customer base is fundamental to increasing your future international sales. 

There are noticeable trends in online shopping behaviour from country to country. Despite a current global pandemic and a perceived rise in nationalism, overall cross-border trading as a proportion of all e-commerce transactions is on the increase. Some nations prefer shopping domestically and others love buying from abroad. This behaviour may depend on cultural factors impacting trust, available delivery options, product categories, and which marketplaces retailers choose for their sales listing.

Whistl, the leading delivery management company in the UK, conducted a survey in June 2020 to understand the international online purchasing behaviour of consumers in key e-commerce markets.

The survey studied 1000 consumers in the UK, Republic of Ireland, France, Germany, Australia and the USA and found that the main reason consumers choose to buy from abroad is to save money (64%). The second biggest reason was that their desired products weren't available in their home country (60%). The next biggest driver of cross-border shopping was consumers' desire to access unique products (51%), followed by international retailers offering free shipping (39%).

Where do people buy from abroad?

 

The Whistl study found that China is by far the most popular destination international consumers buy from (5 out of the 6 surveyed countries). Consumers in the Republic of Ireland buy more from their nearest neighbours, the UK than China. This is despite the UK's e-commerce industry being a seventh the size of China's. The most popular categories across all countries are clothing, electronics and household goods, followed by entertainment, food and wine.

Consumers are influenced just as much by sales channels, than the countries offering goods. So whichever international market you are trying to break into, it’s important that you understand that country’s preferred marketplaces.

The Whistl study found that while Amazon dominated in France, Germany and the UK (70%), in Australia Amazon was significantly less popular (41%) with Australian online shoppers preferring to buy on eBay (69%).

Alternative e-commerce marketplaces to eBay and Amazon

In terms of Gross Merchandise Value (GMV), sales on marketplace sites, like those operated by Alibaba, Amazon, eBay and others, accounted for 57% of global web sales in 2019.

Outside the scope of the Whistl survey, there are multiple other marketplaces to consider, depending on where your current or target audience resides. Mercado Libre, for example, is by far the most popular marketplace in Latin America. In Africa, marketplace Jumia has taken the fight to Amazon. From a global perspective, China’s Taobao and Tmall overshadow even eBay and Amazon in popularity.

What do people buy from abroad?

When looking to increase international sales, it makes sense to consider which markets your products or services are likely to be popular in, and which demographics your offering is likely to perform well with. Once you’ve established this, the next step is to determine consumers’ preferred sales channels in these markets.

The Whistl study found that clothing items (64%) are by a small margin the most popular items purchased from overseas retailers, followed closely by electrical and telecoms goods (60%).

Popular International Purchases.png

Of these respondents surveyed, men were more likely to buy electronics and sporting goods, whereas women tended to purchase more clothing, household and beauty products. Buying behaviour also differed based on age profile, with almost two thirds of those aged 18-39 buying clothing online, compared with only 46% of 60 to 79 year olds.

Consumer preferences differ greatly for each country; here are some examples from the study’s findings:

  • With the Republic of Ireland buying more clothing, beauty/healthcare and entertainment products (proportionally) from overseas than any other.

  • French online shoppers purchased a higher proportion of telecoms and general electrical devices from overseas, but were more likely to buy beauty and healthcare products domestically.

  • American e-commerce consumers bought fewer household and entertainment products from overseas, preferring.

Understand your customer experience to optimise international opportunities

Buying patterns differ greatly in terms of demographics, country of residence and preferred sales channels. Another area to pay close attention to when trying to increase your international sales is your own website.

The Whistl study found that it's important for your website to clarify to visitors, throughout the entire customer journey, that they will be buying from abroad. This applies to the point of searching online and when adding products to their shopping basket.

While very few (3%) consumers experienced difficulties when shopping from abroad, of these it was to do with delivery taking too long. This emphasises the importance of having an international delivery management specialist in your arsenal. Firms such as Whistl are experienced helping global brands and retailers deliver seamless customs clearance processes and international returns.

What is the future of international e-commerce shopping?

When exploring whether there is sales growth potential in overseas markets, you need to consider where your products are most likely to succeed and consider this alongside the buying habits and trade restrictions in those economies.

In the Whistl study, respondents were asked how their shopping habits had changed in the last 12 months and how they predicted their purchases would change in the next 12 months. Respondents predicted their international shopping habits would decrease slightly overall. This was driven by changes in consumer views based around Covid-19 and Brexit, particularly for respondents in the UK and mainland Europe.

However the reality has been quite different; Global e-commerce sales are predicted to exceed £3.55 trillion in 2020 and reach nearly £5 trillion by 2023. With global e-commerce predicted to shift ‘from west to east’, by the end of 2020, 1.4 billion people are expected to join the world's middle class, with most of them (approximately 85%) in the Asia Pacific region.

This bodes well for the future of international cross-border trade, and provided that you carefully monitor what consumers really want, drive continuous improvement and evolve your offering to match international consumers’ demands, you will stand the best chance of maximising sales.

How has Whistl helped some of our customers improve international sales?

Skinny Coffee Club

Whistl has helped Skinny Coffee Club increase their cross-border sales. Skinny Coffee Club were having problems with their previous international delivery management provider, with parcels not arriving and prices rocketing for a seemingly worse service. 

Whistl provided this health drinks retailer an international e-commerce exporting solution tailored to their needs. Comprising of international parcel and mail delivery; they enjoyed a 40% reduction in international complaints.

Sony DADC

Another online business that’s reaped the rewards of working with Whistl is Sony DADC, a leading end-to-end entertainment services provider. 

Whistl has helped this global brand access pooled volume discounted delivery rates on their international parcel delivery for more than five years. We have helped SONY DADC better deal with and capitalise on spikes in demand and given them increased capacity for growth by developing their collection capabilities.

Get in touch with Whistl to discuss how we can help you build your cross-border e-commerce strategy.

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