A guide to cross-border sales: Tips for success, key statistics and consumer insights

Cross-border trade presents plenty of benefits to companies who are thinking of expanding beyond their home market. It can open doors to new markets and revenue streams, and help merchants even out the seasonal fluctuations of domestic demand. Businesses also gain a boost in online visibility, and access to customer bases that are substantially larger than the home market.

Findings from PayPal's 2021 Borderless Commerce Report indicate that there will be continued strong e-commerce growth in the coming year, and hint at the growing opportunities for cross-border e-commerce merchants.

According to the report, 26 per cent of online shoppers surveyed stated that they intend to start shopping or do more shopping at international websites in 2021 and 2022. Furthermore, the average online shopper intent to further increase their online spend is at least twice as high as any intent to pull back.

To optimise their sales strategy, businesses can begin by identifying and prioritising potential markets. Having a comprehensive understanding of the competition, technology drivers and culture is key. Meanwhile, merchants also need to consider some important questions such as: What is the market's potential for growth? What motivates shoppers to make international purchases, and which are their preferred devices or platforms for cross-border transactions? What are marketing strategies, payment methods and trends that resonate with consumers?

Insights into these questions can be gleaned from PayPal's 2021 Borderless Commerce Report. Along with consumer trends and insights, the report contains key data - such as e-commerce and mobile commerce growth rates, internet and smartphone penetration rates, popular product categories, and customer demographics - to help merchants better understand consumer behaviour across 13 major e-commerce markets worldwide.

Understanding consumer preferences

Consumer preferences vary extensively across regions, so businesses should eschew a one-size-fits-all approach, and tailor their strategies to meet the specific needs of their target market. They need to consider multiple dimensions - from language, to culture, device usage, shopping experience and the regulatory landscape.

Localisation, as the report stresses, is a critical component of any successful cross-border strategy.

A key element that can significantly impact conversion rates is language. According to the PayPal report, 24 per cent of online shoppers in markets like Germany, Russia and the United States will not make a cross-border purchase if customer support is not available in their preferred language. It is important to bear in mind that content localisation goes beyond translation; merchants need to pay attention to cultural nuances, and utilise contextually appropriate phrases and images.

Consumers trust what they know - so factors such as an unfamiliar checkout experience, or a lack of desired payment options can be off-putting, and cause shoppers to abandon their carts. Localising form fields, displaying product prices in the local currency and including trust badges on the checkout page are steps businesses can take to localise the checkout process.

In order to define the right payment method mix, merchants need to have a keen understanding of consumer payment preferences and emerging payment trends. PayPal's Borderless Commerce Report offers valuable payment insights into key global markets, such as the rise of Buy Now, Pay Later (BNPL) schemes among Australian consumers, the fast-growing popularity of digital wallets among Hong Kong shoppers, and the transition from traditional to digital payment methods in Japan.

Global e-commerce sales are forecast to continue their upward trajectory to reach US$7.385T (S$9.904T) by 2025. This is indicative of the growth prospects that lie ahead, and further highlights the need for merchants to plan ahead for global expansion, in order to make the most of these opportunities.

For further insights, download the PayPal Borderless Commerce Report.