The electronic commerce registered a record level in 2021 as the main online markets sold US$3.23 billion in goods in 2021 and the figure will continue to grow because by 2030 it is expected to exceed US$7.5 trillion.
In light of this growth, PayU, a provider of payment services in more than 50 high-growth markets, led research to better understand how customers’ e-commerce preferences manifest themselves.
More than 3,000 consumers from the US, Colombia and Poland were surveyed.
Research shows there is still plenty of room for growth in the international e-commerce market, with only around a quarter of consumers surveyed in the US (25%) and Colombia (22%) having purchased products or services abroad in the previous 12 months.
(Hubster, the app that helps restaurants increase their sales).
12% of Americans and 15% of Colombians shop abroad at least once a month. Furthermore, he says that unsurprisingly, China tops the list of countries catering to e-commerce consumers. In the US, 53% of consumers said they had purchased products from China in the previous 12 months, compared to 67% in Colombia.
The study says that of consumers who have not purchased goods or services abroad in the past year, 26% of US shoppers and 22% of Colombians believe they should support stores in their own country.
In part, says PayU, this is because it is unlikely that a single country can meet the needs of the modern consumer.
Looking at the subset of consumers who have not purchased a product or service online from a foreign retailer, only 30% of Americans and 20% of Colombians believe they can get everything they need from domestic providers.
The firm says that for multinationals, that’s great news, as it speaks to a significant potential market size.
Carlos Fajardo, marketing manager of PayU Latin America, assures that: “we are committed to helping build a world without financial borders. Colombians are demanding new facilities every day to access cross-border electronic commerce and at PayU we work to provide them with advantages, security and trust.”
(Less sales and drop in production, the current panorama of SMEs).
Impediments
PayU says there are sometimes barriers that get in the way of cross-border e-commerce and as mentioned before, for some it’s because they can find everything they need in-country.
38% of Americans and 27% of Colombians over the age of 55 believe that companies from the country can meet their needs (this compares with only 6% and 10% of 18-24 year olds in each country) .
Other Major barrier to buying abroad is the high shipping costs or taxes associated with the practice, indicated by around a quarter to a third of those surveyed. The complexity around returns is also an issue.
In addition, concerns about returns were more pronounced for youth in the US (23% was the main reason 18-24 year olds avoided foreign retailers), while in Colombia people from all age groups shared this concern more or less equally.
The firm ensures that payment options must be reliable and meet needs against factors including cost and convenience.
55% of Americans say that if their preferred payment option wasn’t available, they would look elsewhere or not make the purchase. In Colombia, the finding is 52%.
Nearly three-quarters of consumers say they would feel more secure shopping online if they recognized the payment provider’s brand (73% in the US and 74% in Colombia). For a significant proportion of respondents (36% in the US and 41% in Colombia), knowing which payment service provider it is influences the purchase decision.
When buying online from abroad, the appetite for using ‘buy now, pay later’ remains relatively weak in the US., with only one in 10 using the option regularly. In Colombia, the proportion was considerably lower, with only 4% showing comfort with this payment model.
(Technological regulation, among the needs of the digital age).
Credit cards continue to reign as the preferred payment option (US: 55%, Colombia: 49%) when it comes to buying from foreign-based retailers. However, change may be on the way: at 17%, ‘buy now, pay later’ was the most popular option for 25-34 year olds, while in Colombia bank transfer was overwhelmingly favored by this group, with 51% citing their preference for this channel.
What buyers want
Fashion, shoes and bags were the products most frequently purchased by those who shop regularly. Other common items include electronics and toys along with hobbies and DIYs.
In the US, books are a priority and in Colombia the consumer is more likely to buy beauty products, cosmetics and fragrances. In
In the US, demand for goods is evenly distributed, in Colombia it is skewed towards fashion and electronics, perhaps indicating that those two areas are not as well served by domestic retailers.
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