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42% of online shoppers reported being more comfortable with shopping internationally than they were in 2020.
Cross-border shopping is taking hold with customers around the world, but it has also introduced new challenges for businesses.
As shopper values have changed, so have their purchasing decisions, creating an opportunity to appeal to a new audience.
Business has been anything but predictable over the last few years. Lockdowns, changing regulations, and concerns for public safety brought “business as usual” to a screeching halt. As stores and offices closed and lockdowns took hold, shoppers and businesses alike had to quickly adjust to a new normal.
The economic impact
In year three of the pandemic, the public health outlook is slowly improving, but the economic impact is putting businesses at risk of not reaching their growth goals. Perhaps the most noticeable issue shoppers are dealing with is the sharp and sudden wave of inflation at levels not seen in more than 20 years. From gas and groceries to rent and utilities — and more — the cost of living is skyrocketing, causing consumers to tighten their belts.
And if inflation wasn’t enough, global supply chain issues continue to persist through 2022. Average shipping delays from China to Europe rose six days in late 2021, and China to the US’ West Coast saw similar increases. It may not sound ideal, but fortunately businesses still have growth opportunities — they just have to look beyond their borders.
The cross-border opportunity
When businesses start selling internationally, they not only diversify their customer base, but they also help mitigate their risk in uncertain times. Ultimately, this gives businesses the chance to regain lost revenue, reach new audiences, and drive overall growth.
Despite today’s shaky economy, the future of e-commerce is looking bright. Online retail sales have grown steadily worldwide, rising 16.3% to $4.9 trillion from 2020 to 2021 and made up 19% of all retail sales. And that growth isn’t behind us: Worldwide e-commerce sales are expected to exceed $5 trillion in 2022.
Looking at cross-border trade specifically, more shoppers are opening their minds and wallets to purchasing beyond their borders. In fact, 42% of online shoppers reported being more comfortable with shopping internationally than they were in 2020*. We’re now at a point where businesses have more access to potential customers than ever, but that doesn’t mean it’s effortless.
The cross-border challenges ahead
While cross-border shopping presents business with a significant growth opportunity, it comes with a unique set of challenges. Selling to various markets with nuanced customer behaviors and preferences is not a small task, but businesses need to find ways to be in touch with their global customers to truly make the most out of cross-border opportunities. This means understanding what they value, how those values have shifted, and how they differ by region.
With the volatility we’ve seen recently, businesses are finding they don’t know their customers as well as they used to. The COVID-19 pandemic caused a lot of people worldwide to reappraise what really matters to them, and 50% of global customers surveyed say they have totally revised their personal purposes and life priorities. These shifts are changing how they shop, what they buy, and why they choose certain products or services.
Keeping up with customers’ changing values can be a challenge for businesses of any size — and retailers need a better grasp of how these evolving customer behaviors impact 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 approach each market successfully — and connect to a wider global audience.
*PayPal commissioned “PayPal Cross-border Insights 2022.” Online survey of adults across 14 markets (aged 18+ who have purchased online in the past three months) between December 2021 and January 2022.
This post was created by Insider Studios with PayPal.